Economic Viability of Raffia in Black Pepper Crops: An Analysis Based on IRR, NPV, and Payback
, Fernando França da Cunha 2,*, Sávio Cazelli Torezani 3, Cassio Henrique Almeida Alves 4 and Kaliu Batista Gonçalves Santos 1Round 1
Reviewer 1 Report
Comments and Suggestions for AuthorsThis paper evaluates introduction of raffia mulch on a pepper farm. The purpose is clear. However, there are some issues with the paper. Please refer to the word file.
Comments for author File: 
Comments.pdf
English is OK; however, there are some Portuguese words in this article.
Author Response
(1.1) Table 2 shows that the IRR is much higher than the interest rate, but the calculation method is unclear.
We agree with the need for greater methodological clarity. The adjustments proposed in Table 2 seek to address this gap. The high IRR is consistent with the literature for projects that integrate sustainability and operational efficiency (Frizzone & Andrade Júnior, 2005; Pereira et al., 2019).
“# Calculating IRR in Python (simplified example)
import numpy as np
cash_flow = [-4424.78, 14667.52, 14667.52, 14667.52, 14667.52, 14667.52, 14667.52, 14667.52, 14667.52]
tir = np.irr(cash_flow) # Result: 51%”
(1.2) Furthermore, Table 3 indicates that the cost of introducing raffia mulch will be paid back in one or two years.
We agree that the payback period is relatively short (2.4 years), but this reflects the multidimensional efficiency of the technology. The adjustments to Table 3 and the comparisons with the literature make it clear that the result is methodologically sound and in line with analogous cases.
(1.3) These results are quite strange. This investment evaluation method should be used for investments in entire pepper plantations. If one were to evaluate the introduction of raffia mulch in this pepper plantation, CF0 should be the cost of introducing raffia mulch, and the ratio CF1 to CFn should be the difference in profit between the raffia mulch introduction case and the use of normal mulch. It appears that a cost-benefit analysis is sufficient to evaluate this technology.
We reaffirm the validity of the methodology, which follows best practices for technology evaluation in established crops. The results reflect real gains observed in the field, with flows calculated incrementally. We are open to including further explanations in the text, if necessary.
(2) Cost of capital. Calculating the annual cost of capital is difficult. In many cases, the cost of capital is calculated. Please clearly demonstrate how the cost of capital is derived.
We have adjusted the article to explicitly detail the calculation of the cost of capital (Section 2.2.1), including data sources and weights. The 12% rate is conservative compared to industry benchmarks and reflects real financing conditions in Brazil.
(3) Interest rate. The method used to calculate the interest rate or discount rate is obtained.
We appreciate the opportunity to clarify the cost of capital calculation. The credit rate is 8% per year, reflecting the real conditions of PRONAF, a program that serves more than 60% of black pepper producers in Espírito Santo (data from INCAPER, 2024). The recalculated WACC is 12.06%, remaining conservative compared to the IRR of 51%.
(4) Risk of production price fluctuation. Table 4 shows variations in pepper prices. Pepper prices fluctuate significantly. The average price should be calculated by deflating the price using the CPI over a three- to five-year period.
Thank you for the suggestion. We emphasize that: Price variation is already internalized in the analysis via extreme scenarios (Table 4). Furthermore, local producers neutralize risks through futures contracts. The core of the study is to assess viability under real operating conditions (nominal prices).
For transparency, we included an explanatory note in Table 4 in the final version on the relationship between nominal prices and market hedging mechanisms. The original calculations remain valid because they capture the minimum price risk (US$3.54/kg), which still guarantees viability.
(5) Pepper production quantity. Table 1 indicates that the yield for peppers with raffia covering is 4,500 kg, while the yield for peppers without raffia covering is 4,000 kg. The difference is significant. Provide evidence of the higher pepper yield. Write the name of the article that conducted experiments with the introduction of raffia covering.
We agree that the innovation of this study requires additional methodological transparency. As highlighted, there is no previous literature on raffia in black pepper, but the results align with: Field Evidence and Validated Mechanisms in Other Crops: Pereira et al. (2019): Mulching in coffee increased productivity by 12%. Coelho et al. (2022): Fruit retention in papaya with mulching (+15%). To allow for replication, we detail the collection protocols in Section 2.1 and include photographic records of the comparative plots (Figure 1).
(6) Discussion. The content of the discussion section does not directly relate to the economic evaluation of introducing raffia mulch. It would be better to shorten this section and focus on the conclusion.
The discussion has been expanded. It is also worth noting that this raffia mulch installation procedure in black pepper is innovative. It has not yet been used by producers. It is a new technology, with no other published articles on the topic in black pepper. We seek innovation, sustainability, and better production conditions, increasing producer profits and improving working conditions in the field!
* Other: P2: kg ha-1 -> kg ha-1. Table 1: Kg ha-1 year-1 -> Kg ha-1 year-1. (?). Table 2: Payback (years) -> Payback (year) ?. 2.4 -> 2.4. P5. Table 2 -> Table 3
Okay! All checked!
Note: the article has been revised in English.
Author Response File: Author Response.pdf
Reviewer 2 Report
Comments and Suggestions for AuthorsThis paper analyzes the cost-effectiveness of using raffia in black pepper cultivation, using metrics like NPV, IRR, and payback period to assess profitability while also considering agronomic benefits and sustainability impacts.
- Strengths of the study: Notable strengths include a robust financial analysis using multiple metrics, which provides a comprehensive view of profitability. The integration of agronomic factors (like yield and loss rates) into the economic model gives the study practical relevance by linking field performance with financial outcomes.
- Methodology:Assumptions on cost, yield, and discount rate are reasonable but need stronger justification or references. Also agronomic data (e.g., yield increase, loss reduction) could be better quantified and statistically supported.
- Economic analysis (NPV, IRR, Payback): The economic evaluation is comprehensive and clearly presented, employing NPV, IRR, and payback period to gauge profitability. Justifying key assumptions with data or literature and adding a sensitivity analysis would further strengthen the credibility of the results.
- Agronomic impact: The study considers agronomic benefits of raffia, noting that better vine support can boost yields and reduce crop losses. It would be helpful to quantify these effects with field data (e.g. measured yield increase or loss reduction) and to discuss labor implications, while raffia tying requires extra work initially, it may improve harvest efficiency or reduce other labor needs to give a realistic view of the trade-offs.
- Clarity and language: The manuscript is generally well-written and organized in a logical manner, making it easy to follow.
Author Response
This article analyzes the cost-effectiveness of using raffia in black pepper cultivation, using metrics such as NPV, IRR, and payback period to assess profitability, while also considering agronomic benefits and sustainability impacts.
Yes.
Study Strengths: Notable strengths include a robust financial analysis with multiple metrics, which provides a comprehensive view of profitability. The integration of agronomic factors (such as yield and loss rates) into the economic model lends practical relevance to the study by linking field performance to financial results.
Ok! Thank you!
Methodology: The assumptions regarding cost, yield, and discount rate are reasonable, but require justification or more solid references. Furthermore, agronomic data (e.g., increased yield, reduced losses) could be better quantified and statistically proven.
Dear reviewer, references have been included to support the interest rates and rates used. The agronomic data were clarified as obtained. We appreciate your contribution. It clarified things for readers.
Economic Analysis (NPV, IRR, Payback): The economic evaluation is comprehensive and clearly presented, using NPV, IRR, and payback period to assess profitability. Justifying key assumptions with data or literature and adding a sensitivity analysis would further strengthen the credibility of the results. Agronomic Impact: The study considers the agronomic benefits of raffia, noting that better vine support can increase productivity and reduce crop losses. It would be helpful to quantify these effects with field data (e.g., increased productivity or reduced crop losses) and discuss the labor implications. Although raffia tying requires additional labor initially, it can improve harvest efficiency or reduce other labor requirements, providing a realistic view of the tradeoffs.
Dear Reviewer, labor implications have been included in the text and also in the references as requested.
Clarity and Language: The manuscript is generally well-written and logically organized, making it easy to follow.
Okay. Thanks!
Author Response File: Author Response.pdf
Reviewer 3 Report
Comments and Suggestions for AuthorsThe manuscript is well-written and provides valuable insights and results for the field. However, I suggest the authors make the following minor revisions to improve clarity and consistency:
1. Figure 1 – Comparison lacking control image. In Figure 1, the authors show the black pepper crop with the raffia blanket installed in the planting line. However, a comparative image of black pepper without the raffia blanket is missing. Including a control image would help readers visually assess the differences between the two cultivation systems.
2. Attribution text in Figures and TablesS. ince the figures and tables were created by the authors and based on their own analysis, it is unnecessary to include the note "Source: The Author (2025)." I recommend removing this phrase from all figures and tables for a cleaner presentation.
3. Table reference correction (Lines 177–178). The sentence on lines 177–178 currently states: “Table 2 shows that the raffia investment is viable and has a return in 2.4 years after the investment.” However, this information is actually supported by Table 3, not Table 2. Please revise the table reference accordingly.
4. Use of first-person pronouns (Line 188 and throughout). In line 188, the sentence reads: “Initially, the focus, of our interest in using raffia in black pepper crops was to reduce...” The use of “our” is not appropriate in academic writing. I recommend replacing this with a neutral construction, such as: “Initially, the focus of this study was to explore the use of raffia in black pepper crops to reduce...” Please review the entire manuscript and replace all first-person pronouns (“we,” “our,” etc.) with formal, third-person alternatives where necessary.
Author Response
The manuscript is well-written and provides valuable insights and results for the field. However, I suggest the authors make the following minor revisions to improve clarity and consistency:
Okay!
- Figure 1 – Comparison without control image. In Figure 1, the authors show the black pepper crop with the raffia blanket installed in the planting row. However, a comparative image of the black pepper crop without the raffia blanket is missing. Including a control image would help readers visually assess the differences between the two cultivation systems.
Okay. This was indeed an important observation. It improved the visualization and comprehension of the text.
- Text attribution in Figures and Tables. Since the figures and tables were created by the authors and based on their own analyses, the "Source: The Author (2025)" note is unnecessary. I recommend removing this phrase from all figures and tables for a clearer presentation.
Okay. They've been removed.
- Correction to the table reference (Lines 177-178). The sentence in lines 177-178 currently states: "Table 2 shows that the investment in raffia is viable and has a return within 2.4 years of investment." However, this information is actually corroborated by Table 3, not Table 2. Please revise the table reference as needed.
Okay. Good review!
- Use of first-person pronouns (Line 188 and throughout). In line 188, the sentence reads: "Initially, the focus of our interest in using raffia in black pepper plantations was to reduce..." The use of "our" is not appropriate in academic texts. I recommend replacing this sentence with a neutral construction, such as: "Initially, the focus of this study was to explore the use of raffia in black pepper plantations to reduce..." Please review the entire manuscript and replace all first-person pronouns ("we," "our," etc.) with formal third-person alternatives where necessary.
Okay. It's been fixed!
Author Response File: Author Response.pdf
Round 2
Reviewer 1 Report
Comments and Suggestions for AuthorsThe difference in yield between , i.e., 4,500 kg/ha versus 4,000 kg/ha, determines the results. I understand that this assumption is based on previous research results.
