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Gross Margin Analysis of Irrigated Beans: A Case of Khosolo Extension Planning Area

Frank Charles Kasonga

Common beans are important food and cash crop in developing countries like Malawi. Khosolo EPA is well known for growing beans. However, productivity of beans is still low and far below potential hugely impacting profitability. The study conducted a gross margin analysis of irrigated bean production and assessed factors affecting its profitability in the EPA. Sampling was done on two stages: First, lists of farmers from Lupanda Producers and Marketing Cooperative and Kholoso EPA extension offices as sampling units was obtained. Secondly, random sampling was employed from where 60 cooperative smallholder farmers and 60 non-members farmers were drawn. Primary data on social economic characteristics, variable costs, crop output and sales were collected using semistructured questionnaires through face to face interviews. Gross margin as a proxy of profitability was analyzed using Gross Margin Analysis method. Binary logistic regression analysis method was used to analyses factors affecting bean profitability in the EPA. The results showed that irrigated bean production is profitable in Khosolo EPA at above 60%. The level of profitability varied with non-members earning more than cooperative members. Farm size, variable costs, gross income and fertilizer application were significant influencers of bean profitability in the EPA. The study has provided empirical evidence that increasing bean profitability in the EPA requires increasing farm sizes, applying recommended fertilizers at the right calibrations to enhance productivity to the potential level and revamping extension services and training for effective extension delivery that will lead to adoption of new technologies. The study also points to the need for involvement of private sector businesses to increase availability of inputs and high value markets for beans.