Cost-benefit Analysis of Substituting Banana for Coffee in Muranga County, Kenya

Abstract

The study examines the cost and benefit of farming bananas and coffee in Muranga County, Kenya. Time series data analysis technique is used for the period 2011-2029. The main objectives of the study are to analyse the welfare of farming bananas Vis a Vis coffee using cost benefit analysis. This study is important since poverty eradication remains a core agenda in improving the welfare of Kenyan citizens. The base scenario results revealed that banana farming is superior to coffee farmers economically and financially because the incremental benefits are higher than for coffee. This is shown by the results which indicated that there was a net incremental benefit of KShs 85,541 by producing banana and this could even increase if value addition is factored in. Therefore, the conclusion was that the people of Muranga stand to gain in welfare through better income by engaging in banana farming which has nutritional values too.. From the study it is recommended that banana be introduced as an alternative to coffee growing areas