Technical change in Senegal’s irrigated rice sector: impact assessment under uncertainty

This paper addresses the prospects for technical change in the irrigated rice sector of Senegal, and measures ex-ante the economic returns to recent research efforts. In 1994, three new rice varieties were released to farmers in the Senegal River Valley (SRV), the major irrigated rice region in Senegal. The productivity advantage of the new varieties is based primarily on early maturity, which permits double-cropping. (The seeds are also higher yielding than existing cultivars.) We use a conventional [Akino and Hayami (1975), Am. J. Agric. Econ. 57, 1–10] partial-equilibrium model adapted to the Senegalese situation, to assess the social benefits of research and compare those to its costs in calculating the internal rate of return (IRR). To account for uncertainty regarding the future values of model variables we use simulation which allows us to generate a distribution of all possible outcomes of the IRR. We find that rice research is almost certain to have a very high payoff over the 1995–2004 period. The expected value of the IRR is calculated to be 121% per year, with a 97.5% probability that it lies above annual capital costs of 18%. © 2001 Elsevier Science B.V. All rights reserved.