Economics of On-farm Production of Indigenous Fruits - Indigenous Fruit Trees in the Tropics: Domestication, Utilization and Commercialization - page 248

In the investment analysis, multiple products of the IFTs - e.g. fruits, leaves
and wood - are accounted for. The age-dependent fruit yield was treated as a
random variable, with the minimum and maximum as lower and upper bounds
and the modal yield function as the most likely yield for each year.
Autocorrelation of fruit yield is assumed to be non-existent. For simplicity, all
fruit trees in the orchard are assumed to have the same yield. Fruit prices are
considered to follow a uniform distribution between ZW$0.4 and ZW$18/kg,
which are the minimum and maximum farm gate price that households
received in 1999/2000.
The optimal life span of the orchard has to take into account the multiple
products the trees provide. It is reached in the year where returns on labour are
maximized. Multiple tree products include fruit-, leaf- and wood-production
functions and the prices for these products must be taken into consideration.
Leaf and wood production as a function of diameter at breast height (d.b.h.)
and height were applied, as estimated by Chidumayo (1997). The relationships
between age and d.b.h. and between age and height were estimated by linear
regression using the data from farmer-preserved and farmer-managed IFTs.
Price estimates for the various products are based on our surveys. These are
either market prices of the products or market prices of substitutes.
13.5 Model Outputs for Investment in IFT Planting
The returns on labour of collecting IFT products from the communal areas
(ZW$506/day) are much higher than the returns on labour from planting non-
domesticated trees (ZW$52/day). Thus, the incremental value of planting IFTs
is negative on average. The productivity of the non-domesticated IFTs is still
too low to be economic for farmers. This also explains why so few farmers
have planted the trees until now. This is implicitly referred to by Murehwa
farmers, who frequently state that they will not plant IFTs in the future because
the perceived abundance of the trees is high; farmers of Takawira resettlement
area directly cite the long time that IFTs take to produce fruits as one reason for
not planting the trees in the future (Table 13.2). Without having asked farmers
to rank their reasons for not planting IFTs, the frequency with which each
reason was mentioned can be taken as a proxy. Since insecurity of tenure of
land was never mentioned and farmers have planted other trees, this does not
seem to influence the decision on whether to plant IFTs or not.
In addition, the annual rates of return on labour of indigenous (and exotic)
fruit tree use show a positive covariance (0.2554) with all other activities in the
income portfolio of Murehwa farm households. Thus, the theoretical benefit of
enterprise diversification cannot be established through the planting of IFTs
when considering annual income streams, and therefore planting does not have
risk-reducing effects. 8 Overall, the risk-adjusted rate of return for planting IFTs is
15.64%, which constitutes a rate in real terms (Mithöfer, 2005; Mithöfer et al. ,
2005). The high rate of inflation in Zimbabwe implies that not the nominal but
rather the real rate has to be used for investment analysis, which was done for
the present study. High inflation rates with constant or relatively slower rising