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CIP is a great investment

for reducing poverty and hunger!


The annual net benet from CIP research estimated from impact studies has exceeded $225 million for the past 10 years. These benets mostly accrue to the poor and hungry in developing countries. For CIP donors, that is a handsome dividend, indeed.
Because of the relatively long gestation period between investment and returns to agricultural research it takes time to see economic impacts of this scale. And they require sustained investments over the long term. As Figure 1 shows, it was not until 1990 almost 20 years after its founding that CIP was able to get out of the red with returns to successful projects exceeding the organizations annual budget. long period of time and the prole of benets varies with technology, researchers apply a discount when summing future benets to calculate the net present value of the investment. Table 1 presents estimated returns on investment for various CIP technologies by crop and by region documented in the impact studies. For example, the most recent study of varietal change in potatoes showed that by 2008, CIP-related varieties covered over one million hectares worldwide. Applying a discount rate of 5% gives a net present value of the investment in improved potato varieties of more than $121 million.

I M PAC T B R I E F
S E R I E S

NOVEMBER 2011

By the mid-1990s CIP technologies had matured and were generating seven times more annual returns than CIPs annual expenditure. Much of this benet came from contributing to virus free sweetpotato seed in China. Since then, adoption of new varieties developed Many people in diverse regions and societal groups with CIP support has accelerated in the target countries gain from CIP technologies. Beneciaries range from and makes up the greater part of documented impact semi-subsistence women potato farmers in the East Africa (Figure 1). highlands to small sweetpotato producing households These estimates are based on detailed case studies of in mixed crop-livestock systems in China and poor adoption of an array of technologies developed by CIP and potato consumers in Latin America. In addition, benets its partners. In each case, the studies identify the source are not conned to varietal change. Both improved of benet from the use of the technology, the adoption seed technologies and integrated pest management prole, and the additional total value which accrues practices also gure prominently in return on investment through its use over time. Since the benets accrue over a calculations. (Table 1).
300

250

200

Net Cost Varieties Seed IPM

million USD

150

100

50

0
1971 1974 1977 1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010

-50

Figure 1: Net annual benet from CIP related technology documented in impact studies

Impact brief prepared by Graham Thiele, Guy Hareau, Vctor Surez, and Valerie Gwinner.

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The estimates in Table 1 are conservative. Not all success stories have been documented, nor does all CIPs work lend itself to economic measurement. CIPs role in the preservation of biodiversity maintains options for varietal change for future generations. CIPs contributions to human capital development, and to other livelihood assets such as physical capital and improved social cohesion, are undeniably important benets. But quantifying these additional gains entails extensive research. Because impacts usually occur outside the time frame of a project, special attention needs to be given to funding impact work and developing an impact culture in planning and implementing the research agenda. The trend toward lower investment in long-term global research initiatives, such as breeding, is threatening to compromise these advances, however. Likewise, pressures from donors to produce short-term results for targeted programs are moving investment away from up stream research that may produce the biggest impacts in the longer run. Impact studies have an important role in demonstrating the value of this strategic research, raising awareness and ensuring continued donor investment.
Table 1: Impact studies and estimated net present value of investment ($ millions)
Varieties Potato Cent. Africa ($27) China ($11.9) Peru ($5.4) World ($121) Seed systems Tunisia ($2.1) India ($18) Vietnam 1 ($2.1) Egypt ($2.9) Vietnam 2 ($5.1) China ($550) Integrated Crop Management Tunisia Peru Peru ($6.4) ($1.8) ($0.06) Post-harvest utilization/ enterprise development

Sweetpotato

Peru

($3.0)

Dom.Rep. ($1.1) Cuba ($21.7)

(Sichuan-starch, feed) (Vietnam-feed)

References
Chilver, A., R. El-Bedewy and A. Rizk. 1997. True potato seed: research, diusion, and outcomes in Egypt. International Potato Center (CIP). Lima, Per. 29 p. Fonseca, C., Zuger, R., Walker, T.S. and Molina, J. 2002. Estudio de impacto de la adopcin de nuevas variedades de camote liberadas por el INIA en la costa central, Per. Caso del valle de Caete. Potato Center (CIP). Lima, Per, 2002, 24 p. Fuglie, K., Zhang, L., Salazar, L. and Walker, T.S. 1999. Economic impact of virus-free sweetpotato planting material in Shadong province, China. International Potato Center (CIP). Lima, Per. 27 p. Fuglie K.O., Bich Nga, D.T., Huy Chien, D. and Thi Hoa, N. 2001. The economic impact of true potato seed in Vietnam. International Potato Center (CIP). Lima, Per. 24 p. Maza, N., Morales, A., Ortiz, O., Winters, P., Alcazar, J. and Scott, G. 2000. Impacto del manejo integrado del tetuan del boniato (Cylas formicarius) en Cuba. Per, International Potato Center (CIP). Lima, Per. 45 p. Thiele, G., G. Hareau, V. Suarez, E. Chujoy, M. Bonierble and L. Maldonado. 2008. Varietal change in potatoes in developing countries and the contribution of the International Potato Center: 1972-2007.Social Sciences Working Paper. Lima, CIP: 46 Walker, T.S and Crissman, C. 1996. Case studies of the economic impact of CIP-related technology. International Potato Center (CIP). Lima, Per. 157 p. Walker, T.S., Bi, Y.P., Li, J.H., Gaur, P.C., Grande, E. 2003. Potato genetic improvement in developing countries and CIPs role in varietal change. In: Crop Variety Improvement and its eect on productivity: The impact of international agricultural research. Evenson, R.E, Gollin, D. (Eds.). CABI Publishing, Oxfordshiere, U.K. pp. 315-336.

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