The MCC Agriculture Sector Cost-Benefit Analysis Guidance (2024) provides a framework for evaluating the economic viability of agriculture investments. It outlines how to estimate costs, benefits, and the Economic Rate of Return (ERR), requiring projects to exceed a 10 percent threshold to qualify. The guidance emphasizes modeling farmer behavior, adoption rates, and risk preferences when estimating productivity gains. Benefits typically include increased farm incomes, higher yields, crop diversification, reduced production risks, and potential consumer welfare gains from lower food prices. Costs cover capital investments, operations and maintenance, training, and administrative expenses. The document also highlights the importance of economic pricing, sensitivity analysis, and counterfactual scenarios. Broader impacts such as value chain development, gender inclusion, climate resilience, and institutional reforms are considered where relevant. Overall, it promotes rigorous, transparent appraisal to ensure agriculture projects deliver sustainable economic growth and poverty reduction.
