Estimating the potential returns to research and development from sorghum value added products in El Salvador and Nicaragua

Abstract

Sorghum bicolor (L.) Moench is a drought tolerant crop able to adapt to hot and dry weather. It has excellent chemical and physical properties, which make it a grain of good quality for processing different types of products. This research is an impact assessment study that estimated the potential impacts of new uses of sorghum by using an equilibrium displacement model. The data used was drawn from interviews developed in July 2011. Using total quantity production, prices, prices elasticities and cost shares 8 potential market scenarios were simulated. Results between countries were similar. Thus, the analysis was applied for both countries. Producers gain when the sorghum flour demand is shifted between $6,000 and $ 30,000. When the feed demand curve shifted the producer benefit was between $3 million and $ 13 million. In the scenario where the sorghum grain curve shifted and the demand curve for feed and sorghum flour, producer net benefit is between $300,000 to $2.5 million. Interpreting these results suggest that increasing yield and promoting sorghum as a substitute of maize for feed and sorghum as a substitute of wheat for sorghum flour can benefit producers while helping them to increase yield.