Assessing the Economic Benefits of Investment in Capacity Building

This paper presented the results of an economic assessment study commissioned by the Philippine Council for Agriculture, Aquatic and Natural Resources Research and Development of the Department of Science and Technology (PCAARRD-DOST). Primary data on production, costs, investments, and socio-economic and farm-specific characteristics were obtained from 382 goat enterprise owners from Leyte, La Union, Isabela, and Nueva Ecija, Philippines using a pre-tested structured questionnaire. The analytical method used to measure the return on the donor’s investment is the Benefit-Cost-Analysis (BCA). The study showed that the investment on capacity building generated a Net Present Value (NPV) of Php 3.8 million, a Benefit-Cost Ratio (BCR) of 1.36 and an Internal Rate of Return (IRR) of 35.48%. It is therefore concluded that the Rural Enterprise Development (RED) project provided positive returns on the investments of PCAARRD and the participating Local Government Units (LGUs). Hence, it was recommended that the Department of Agriculture institutionalize the RED Project so that it could be replicated in other regions of the country.