The comparative advantage of selected long-term crops in Lesotho

Abstract

This paper evaluates the comparative economic advantage (CEA) of irrigated longterm crops (cherries, peaches, apples and asparagus) in the four agro-ecological zones of Lesotho based on analyses of profitability coefficients and domestic resource costs. The analysis was carried out using the net present value (NPV) approach. The CEA analysis yielded higher private returns relative to economic returns in the Lowlands, Foothills, the Senqu River Valley and the Mountains of Lesotho for all the crops examined. In the Lowlands zone all products have a RCR of lower than one indicating a comparative advantage. In the Foothills only apples and peaches were investigated, and both show a comparative advantage of equal strength. In the Senqu River Valley the result for apples and peaches are mixed, i.e. apples show a comparative advantage, whilst peaches show a comparative disadvantage. In the Mountain zone only apples has a comparative advantage. Sensitivity analysis was also conducted related to exchange rate changes, land and water prices, and threshold prices.