Economics of On-farm Production of Indigenous Fruits - Indigenous Fruit Trees in the Tropics: Domestication, Utilization and Commercialization - page 249

nominal rates imply decreasing real rates of interest. This implies decreasing
opportunity costs of capital, i.e. credits are 'cheaper', as well as decreasing
profitability of investments in financial assets but increasing profitability of
investments in non-financial assets. Most importantly for the present analysis,
one would have to assess the effect of inflation on various activities in farmers'
portfolios and adapt the risk-adjusted rate of return accordingly to the fast-
changing Zimbabwean conditions.
The calculations show that to be economically attractive, domesticated IFTs
would either have to be further improved or the availability of fruits from the
communal areas would have to be dramatically less, resulting in higher
collection costs (Mithöfer, 2005; Mithöfer et al. , 2005). Table 13.6 shows the
improvements and changes necessary so that farmers could be expected to
immediately invest. Tree improvements would have to induce early maturity
and enhance yields.
Farmers can be expected to invest in planting of IFTs if trees fruit at
2 years of age in combination with a ninefold yield increase. Alternatively,
increased costs of collection of indigenous fruits from the communal areas in
combination with lower levels of tree improvements would induce investment,
all other factors being equal. For example, if precocity could be induced at an
age of 2 years, 2.8-fold higher costs of collection from the communal areas
would trigger immediate investment. Such an increase in collection costs
would happen if the abundance of trees decreased sharply or had already
occurred in areas which have experienced high rates of deforestation in the
past. If fruit quality is improved via the domestication programme so that
domesticated fruits fetch prices up to three times that of non-domesticated
ones, then lower levels of yield or increase in collection costs would trigger
investment (Mithöfer, 2005; Mithöfer et al. , 2005). In order to contribute to
achieving this, the domestication programme could make use of consumers'
preferences and willingness to pay, as demonstrated by Ramadhani (2002),
and assess fruit traits that would fetch higher prices and then concentrate on
improving those.

Table 13.6. Conditions for immediate investment in on-farm indigenous fruit tree planting.

Yield level Fruit quality Collection costs

Age at first fruiting (times the (fruit prices 1-3 times (times the

(years) current level) the current level) current level)

2 Non-improved Non-improved 2.8-2.9

2 9-30 1 Non-improved Non-changed

4 10-40 1 Non-improved Non-changed

6 12-56 1 Non-improved Non-changed

8 16-80 1 Non-improved Non-changed

10 24-104 Non-improved Non-changed

2 Non-improved Improved 1.3-2 1

2 1.5-2 11 Improved Non-changed

Source: Mithöfer (2005), Mithöfer et al. (2005).