Grain stored in plane metal silos and total value of grain saved from loss (POSTCOSECHA, Central America, 1983-2009)

The SDC POSTCOSECHA Programme in Central America has been a success. Between 1983 and 2009 approximately 336'000 tons of grain worth 75 millions of US$ could be saved from loss. The programme has shown tangible benefits for:
farmers | tinsmiths | national economies | training & development organizations | governments and donor agencies

Farmers and other silo users
Farmers’ profits depend on the earnings from grain sales and the percentage of the harvest preserved due to the POSTCOSECHA technology. With their own storage facilities farmers typically do not sell for average market prices, but sell during peak periods. This pro-cyclical effect is even stronger with the largest silo size: since only the grain amount above subsistence and reproduction needs is sold, farmers with harvests big enough to fill large silos will sell a higher percentage of their harvest at peak prices than average farmers.

Grain storage in metal silos is not only interesting for farmers. Traders and institutions (for example schools) can benefit as well. They often have better possibilities to invest the necessary capital and to profit from pro-cyclical effects.

The investment in the new technology consists of monetary costs (purchase price of the silo, fumigation costs, interests on a potential loan, price of the storage technology replaced by the POSTCOSECHA technology) as well as nonmonetary costs (time invested in learning how to manage the new technology, information costs about the market for loanable funds). Some uncertainties do exist concerning the lifetime of the silo, inflation, interest rate or market price fluctuations.

The benefits to farmer families in general are:

• relatively low investment with rapid amortization
• high return on investment
• strengthening of bargaining position vis-à-vis traders
• diversification of livelihood strategies
• safe storage of family staples & seeds in own in-house storage facility
• dwellings free of rodents and poisonous chemicals
• after sale services readily available with local tinsmiths

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Representative calculation (overall average estimates) for a
Central American farmer:

Tinsmiths
Tinsmiths’ profits depend on the number of silos sold and the sales price of the silos. The production costs consist of monetary costs (price of tools, price of silo raw materials, labor costs, storage costs, rental for workshop, interests on a potential loan) as well as nonmonetary costs (time invested in learning how to produce silos, information costs about market for loanable funds). The tinsmiths’ uncertainties concern the lifetime of the tools, sales risk (fall in demand), inflation, etc.

Further benefits for local tinsmiths are:

• diversification of production
• additional income source
• improved management competencies

Representative calculation for a Central American tinsmith:

 National Economy   
Benefits to the national economy depend on the significance of the postharvest losses prevented (significance of the grain production for the national economy, scale of postharvest losses) as well as on the coverage with POSTCOSECHA technology (percentage of harvest stored at farm level, percentage of farm level storage covered with POSTCOSECHA technology).

General impacts on the national economy are:

• creation of new tinsmith jobs
• stabilization of market price for basic grains (less seasonal fluctuations)  
• positive effects on food security and livelihoods of farmers  

Training and Development Organizations
Training and development organizations benefit from a proven technology ready for dissemination.

Governments and Donor Agencies
Governments and donor agencies have at their disposal a low risk strategy with proven success on poverty reduction and sustainable economic growth. Decentralized storage is buffering lean seasons and avoids the use of centralized storage facilities with high distribution costs.

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