Economic Value of an Abscission Compound for Mechanically Harvested Late-season 'Valencia' Oranges

This paper compares estimated economic values of mechanically harvesting 'Valencia' [Citrus sinensis (L.) Osb.] during the late season without adverse yield impacts, against the estimated cost of development and registration of the abscission compound, CMNP (5-chloro-3-methyl-4-nitro-1-H-pyrazole). The basis of this analysis is a "benefit-cost" model that compares the discounted cash flows of public expenditures against projections of future private benefits of extending mechanical harvesting into late May and June with CMNP application. The estimated net present value (NPV) of cash flows, over a 10-year planning horizon with an assumed interest rate of 10%, was $38 million. The public investment for CMNP registration and development had a positive internal rate of return (IRR) of 32.64% and a payback period of 4.8 years from 2008. Thus, benefits resulting from the application of abscission compound for mechanically harvesting late-season 'Valencias' more than offset the cost of R&D and registration.