1 R&D and private investment: How to conserve indigenous fruit biodiversity 1 of Southern Africa 2 3 Dagmar Mithöfer * , Justus Wesseler + and Hermann Waibel * 4 5 Abstract 6 Indigenous fruits contribute widely to rural incomes in Southern Africa but their 7 availability is declining. A domestication program aims to increase farm-household 8 income and conserve biodiversity through farmer-led tree planting. Planting domesticated 9 indigenous fruit trees is an uncertain, irreversible but flexible investment. Our analysis 10 applies the real option approach using contingent claims analysis, which allows solving 11 the discounting problem. The article analyses (1) to what level fruit collection cost and/or 12 (2) the necessary technical change, i.e. breeding progress, have to rise in order to render 13 tree planting economical, using data from income portfolios of rural households in 14 Zimbabwe. Results currently show that collecting indigenous fruits is more profitable 15 than planting the trees. A combination of technical change and decrease in resource 16 abundance can provide incentives for farmer-led planting of domesticated trees and 17 biodiversity conservation. However, breeding progress must be significant for investment 18 in tree planting to be economically attractive. 19 * Department of Economics and Business Administration, University of Hannover, Königsworther Platz 1, 30167 Hannover, Germany, Tel.: ++49-511-7622666; fax: ++49-511-7622667, E-mail address: mithoefer@ifgb.uni-hannover.de (D. Mithöfer). + Department of Social Sciences, University of Wageningen, IMAG building, Mansholtlaan 10-12, 6708 PG Wageningen, The Netherlands.