Cost-benefit analysis of climate-smart agriculture practices

Difference between climate smart agriculture (back field) and traditional agriculture practices (front field).

Nepal is experiencing climate uncertainty and extremes which are disproportionally affecting agriculture, food security and livelihoods of smallholder farmers. Climate-smart agriculture (CSA) is undoubtedly important to deal with emerging challenges through increasing productivity, adaptation and mitigation in Nepal. However, a few empirical analyses have been carried out about how to tackle with climate variability and change. Currently, some of the development organizations along with Nepal government are working to design programs to tackle the problems associated with climate uncertainty and extremes. However, the cost-effectiveness analysis while adopting these practices has not done yet. This study aims to bridge the knowledge gap between the cost and effectiveness, using probabilistic cost-benefit analysis to assess the cost-effectiveness of the some of the CSA practices adopted by smallholder farmers in the different agro-ecological zones of Gandaki River Basin of Nepal. Indicators related to profitability and valuation of environmental and social externalities will be used to assess the options. We believe that a thorough understanding of the costs and benefits of potential CSA options is needed to channel investments effectively and efficiently towards both short and long-term interventions and should be coupled with broader assessment of tradeoffs between CSA outcomes. The outcomes of the research would be the key ingredients for the farmers to choose the best CSA technology; for financial institute to decide whether to lend or not; for policymakers and development practitioners to formulate new policies and programs.


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