Returns to Commercialisation: Gross Margins of Commercial Crops Grown by Smallholders in Sub-Saharan Africa

Abstract

What are the returns to smallholders when they grow commercial crops for sale in rural Africa? The gross value of production per hectare is sometimes reported, with some recent estimates ranging from as much as US$10,000/ha for irrigated vegetables in Zimbabwe to as little as US$250 for sunflower grown on semi-arid land without irrigation in central Tanzania. Gross value, however, takes no account of the costs farmers incur in growing their crops. In this paper, we use gross margin (GM) analysis to take account of those costs and give a truer estimate of the returns to farmers.