|
|
| français - Espańol |
|
 |
| idrc.ca HOME >
Publications >
IDRC Books >
All our books >
COVER CROPS IN HILLSIDE AGRICULTURE >
|
ID: 31759Added: 2003-06-10 15:08Modified: 2006-07-13 23:32Refreshed: 2010-03-14 05:23 
|
|
Document(s) 1 of 17
Probabilistic cost–benefit analysisCost–benefit analysis (CBA) can be used to compare two technological alternatives, such as the bush-fallow and abonera systems. The different flows of benefits and costs from year to year are compared to determine the relative profitability of each system. In the analysis, the annual net benefits (NB) per unit of land in year t generated by the bush-fallow system (NBbt) and those of the abonera (NBat) are defined as the difference between annual gross benefits (GB) and annual costs: NBbt = pm x Yb – Cb [1] NBat = pm x Ya – Ca [2] where Yb and Ya are the annual maize yields from the bush-fallow and abonera alternatives; pm is the price of maize; and Cb and Ca are the annual production costs of these alternatives. To assess the profitability of the abonera system relative to that of the bush-fallow system, CBA calls for the calculation of the net present value (NPV) of the incremental flow of net benefits generated by the alternatives compared (Steiner 1980). The NPV of the incremental flow of net benefits is given by the following:
where r is the rate of discount; and T is the time horizon considered in the analysis. The abonera system will be relatively more profitable to the farmer if NPV is greater than zero. Equation [3] shows that the relative profitability of the abonera system depends on two factors: the discounted value of the flow of the annual yield differences and annual cost differences. Traditionally, CBA uses average or modal values of the variables in cal-culations of NPV. The data needed for the analysis are limited, making it a fairly easy technique to use (Pagiola 1994). It is, however, a deterministic approach — that is, no measurement of variability is attached to the resulting net benefits. To illustrate, consider the calculation of gross benefits for a practice in a given year. Assume that the average maize price received (pm) is 0.09 USD kg-1 and that the average maize yield (Yavg) is 2000 kg ha-1. The gross benefits would be as follows: GBavg = (0.09 USD kg-1) x (2000 kg ha-1) = 180 USD ha-1 One can enhance this statement by performing a sensitivity analysis, considering worst- and best-case scenarios, as well as the modal case. Although sensitivity analysis is more revealing, it still fails to indicate the likelihood that a farmer will realize high, low, or average gross benefits. Probabilistic CBA attempts to overcome this limitation by not only considering the range of values of the variables but also attaching to these values a measure of the likelihood of their occurrence (Anderson and Dillon 1992). Alternatives are compared through their impact on the variability of NPV, thereby giving a measure of the impact of alternatives on the levels of uncertainty or risk faced by farmers. Some or all of the parameters in this analysis must be treated as random variables to enable one to calculate from these a CDF. Such functions in turn make it possible to associate probabilities of occurrence with the range of the variable. Maize yield is a good example of a random variable. Yields obtained by farmers under rainfed conditions are subject to many unpredictable events, which result in variability from year to year and from farmer to farmer. If this yield variability is assumed to follow a normal distribution, then maize yield (Y) will have a normal CDF. This is represented as Y ~ N(µ , Unlike a deterministic CBA, which produces a single value, the probabilistic approach produces the CDF of NPV of economic returns for the alternatives. Comparison of these measures makes it possible to assess the impacts of the alternatives not only on average economic returns but also on the risk the farmer faces. This information allows us to make a more comprehensive assessment of economic profitability, one that recognizes that farmers are interested not only in increasing average net benefits but also in reducing production risk (Anderson and Dillon 1992).
Our analysis takes a probabilistic approach to examine the relative profitability of the abonera and bush-fallow systems. We specify the maize-production technology, along with the CDF of all random variables and the values of the nonrandom variables included in the calculation of NPV, as outlined in equation [3] above. In this analysis, we treat maize yields and prices as random variables and represent them by their CDF. For simplicity, technology is considered nonrandom and represented by a set of constant technical coefficients. The time horizon of the analysis and the discount rate — two other variables in the analysis — are also considered nonrandom (Table 35). Model specifications — including maize-production technology, maize yields, and farm prices — are given in Appendix IV. The data used in the analysis are from the farm survey, supplemented, when appropriate, with data on farm inputs and outputs collected during intensive, focused interviews with regional farmers. The calculations are carried out through Monte Carlo simulation. Simulation analysis was performed using @Risk software by Palisade Corporation. The model ran 2000 iterations before reaching convergence. Convergence of the simulation is evaluated by the amount of change in three statistics: the average percentage change in the percentile values; the mean value; and the standard deviation. When the percentage change in these statistics is less than an established threshold, this means value convergence is achieved. In this study the threshold value was set at 1.5%. The method involves estimating the CDF of NPV by simulating a process of sampling the probability distribution of the random variables in the analysis. Following the example above, the CDF of gross benefits is obtained by sampling the probability distribution of the yield variable and multiplying it by a sampled value from the probability distribution of the price variable. This process is repeated very many times to obtain a robust estimate of the CDF of gross benefits. The analysis is based on several other assumptions that need to be identified. It assumes that cropland is readily available (it is an extra or marginal unit) and that it is allocated to maize (it is the preferred land use). As indicated in Chapter 2, cropland is available in northern Honduras at relatively low cost, and annual crops other than maize are grown in very small quantities. Within these parameters, the options available to the farmer are to cultivate maize in either the bush-fallow system or the abonera system. Thus, we ignored the cost of land and the opportunity costs, focusing instead on returns per units of land, labour, and other factors of production. In building up the budgets of the alternative systems, we took only short-run impacts into account. Financial on-farm prices were used in the calculations, and all long-run benefits (soil conservation) were ignored. Field-level analysisReturns per unit of land The period of comparison between the two alternatives used in the simulation is 6 years, an average cycle in the current bush-fallow system. The analysis assumes that first- and second-season maize are produced in the bush-fallow system for up to 2 consecutive years, followed by a fallow period of about 4 years. The entire 6-year cycle results in an annual land-use intensity (LUI) of 33%. In contrast, farmers crop an abonera field once a year in a continuous rotation with velvetbean. With the period of comparison being the 6-year cycle employed in the bush-fallow system, the LUI of the abonera system is 50%. Although the main reason for the superior return per unit of land in the abonera system can be seen immediately from this comparison, the particular paths of costs and benefits over time for the two systems are quite distinct. The costs of establishing an abonera system (mainly labour cost and the opportunity costs of the land) are paid in the first 2 years, whereas the benefits from the investment are realized only in the third year and afterward. This start-up or investment period must be evaluated in economic terms with a view to farmers' planning horizons and the degree to which the farmers discount the future benefits of the abonera system. The annual budgets over the 6-year period in the analysis are presented in Appendix IV. Table 36 shows the flow of annual net benefits from the two systems and the incremental flow of benefits, evaluated at the mean values of the random variables (maize yields and prices). The last four rows of the table show for both systems the NPV of the annual flow of net benefits and the incremental flow, calculated at different discount rates. Returns per unit of land in the abonera system are higher than those derived from the bush-fallow system, even at discount rates as high as 100%.
The analysis can be enhanced by using a probabilistic approach to consider the impact of the abonera system on yield risk. Table 37 presents the probability distribution of the NPV of the incremental flow of net benefits of the abonera and the bush-fallow systems. It shows the probability that the NPV of the incremental flow of net benefits is greater than zero (that is, the probability that the abonera will be more profitable than the bush-fallow system). These parameters were estimated for different discount rates (with the planning horizon fixed at 6 years) and for different planning horizons (with the discount rate fixed at 30%). The results of the probabilistic analysis indicate that when the farmer's planning horizon spans the 6 years of the bush-fallow cycle, the abonera system has more than an 80% probability of producing a NPV of net benefits that is larger than that of the bush-fallow system. Even with discount rates as high as 100%, this probability is still very high (more than 60%). By contrast, when the planning horizon is 2 years, the probability of realizing an advantage from an abonera system is only 13%. This comparison indicates that the planning horizon is a much more significant constraint on farmers' decision-making than the discount rate. For farmers constrained to a short planning period, the abonera system is not a feasible option.
If, however, the planning period is 3 or more years, then the abonera system is very likely to provide higher net benefits than the bush-fallow system, regardless of the degree to which future benefits are discounted. Returns per unit of labour Farm households consider not only returns per unit of land when evaluating the economic consequences of alternative investments but also net returns per unit of family labour, which may be just as important as returns per unit of land, especially in a place like northern Honduras, where land is relatively abundant. Table 38 presents a monthly calendar of common activities in first- and second-season maize production and the labour requirements per unit of land for each activity. The data indicate that first-season maize requires a total of 65 person–day ha-1. Second-season maize in the bush-fallow system requires 47.5 person–day ha-1; in the abonera system, 44.5 person–day ha-1. The abonera system requires on average 4 fewer person–day ha-1 for clearing the field and weeding but an additional 1 person–day ha-1 for harvesting the higher yielding maize crop. The economic implications of the labour-saving effects of the abonera system can be seen in Table 39. The table presents the annual flow of family labour used in the bush-fallow and abonera systems (person–day ha-1), as well as the flow of annual net benefits for each system in terms of returns per person–day per hectare of land. (Farm-survey data show that half of the farmers interviewed hired off-farm labour, mainly for land preparation and planting. The simulation analysis assumes that these activities are accomplished by 50% hired labour and 50% family labour, with the remaining activities performed using exclusively family labour.) The last column of the table presents the incremental flow of annual net returns per unit of labour, values clearly superior to those of the bush-fallow system. The flow of net returns per unit of labour is more immediate than that per unit of land. The return per unit of labour in the abonera system is lower than in the bush-fallow system during the first year, but the assessment changes completely in the second year, when labour costs drop. Even before yield benefits at the end of the second year are added, the abonera system provides higher net returns per unit of labour. The short-term positive impact on returns per unit of labour in the abonera system may have triggered adoption of the practice in northern Honduras, which is a perspective consistent with farmers' own evaluations of the system (see Chapter 4).
Comparison of labour requirements for both systems also reveals that although the abonera system requires less labour per unit of land than the bush-fallow system, more labour is employed over a 6-year period. The intensification of land use in the abonera system implies an increase of 23% in total family labour employed in maize production on that land (27.5 person–day ha-1 more, over 6 years). Thus, the abonera system has a dual impact on labour use. On the one hand, the annual labour costs per unit of land are reduced, but on the other hand, the total demand for labour over a 6-year cycle is increased. These economic effects are discussed below in the farm-level analysis and in the discussion of the regional impacts of the abonera system. Sensitivity analysis The CBA of the net returns per units of land and labour demonstrates that the abonera system is currently more profitable than the bush-fallow system, at least in northern Honduras. This economic advantage is subject, however, to changes in the main factors influencing relative profitability. Future use of the abonera system in northern Honduras or diffusion of the technology into other regions requires that these factors remain about the same. Table 40 shows the main factors in the differences between the flow of net benefits in the abonera and that in the bush-fallow systems under different discount rates. The data reveal the sensitivity of the CBA to changes in these factors. For example, at the lower discount rates, the maize yield realized in the abonera system is clearly the most important factor. The positive correlation coefficient of this variable is very strong. The importance of seasonal differences in maize prices is also indicated by the opposite signs of the correlation coefficients of these variables. This relationship suggests that as long as seasonal price differences continue, the abonera will be more profitable than the bush-fallow system. Because the price difference is a result of a seasonal scarcity in maize relative to a stable demand, policies affecting maize imports are likely to have a marked effect on the relative profitability of the abonera system. The current rising trend in international maize prices suggests that, at least for the time being, seasonal differences in maize prices are likely to continue.
In sum, the abonera system is economically more productive at the field level — when a single unit of land is considered (at the margin) over the 6-year cycle of the bush-fallow system. These returns per unit of land are realized, however, only if the farmer's planning horizon is greater than 2 years, which implies that adopting the abonera system is subject to factors conditioning farmers' planning horizons. Returns per unit of labour are somewhat more immediate (halfway through the second year). Although annual labour costs are reduced in the abonera system, the intensification of land use increases the overall demand for labour, an important economic impact in a country where opportunities to invest family labour are limited. The relative profitability of the abonera system is sensitive, however, to changes in the yield of maize in the two systems and in the seasonality of maize prices — factors examined further in subsequent chapters. Farm-level analysisThe economic implications of the abonera system cannot be assessed at the field level alone. Adoption of the abonera system implies a series of land and labour allocations affecting the whole farm. These are assessed by farmers with a view to their broader livelihood objectives and alternative sources of income and land uses. In this section, we examine the economic implications of alternative land and labour allocations at the farm level and the income-generating potential of the abonera system relative to that of other major forms of land use. Cropping patterns Before the abonera system was introduced, most regional farmers planted maize for several seasons in the same field, followed by an extended bush-fallow period. Currently, farmers have more options when allocating land, indicated schematically in Figure 21. Farmers can decide to continue to grow first- and second-season maize in the bush-fallow system without establishing a velvetbean field (scenario A in the figure). Alternatively, farmers can decide to allocate a field to the abonera system while continuing the conventional double-cropping pattern in a bush-fallow field (scenario B). Finally, farmers can decide to employ two distinct and exclusive cropping patterns, with a single crop of first-season maize grown in an annual bush-fallow pattern and a second-season maize crop grown in an abonera system (scenario C). Figure 21. Adoption and land-allocation decisions, northern Honduras. The three scenarios have distinct implications for the number of maize plots cultivated per household and the land area dedicated to maize over a 6-year period, the cycle of the bush-fallow system (Table 41). In Table 41, a plot means a physical parcel of land, whereas a land unit refers to the use of the plot over time. The farmer employing only the bush-fallow system (scenario A) cultivates a plot of land for 2 years and then shifts to a new plot for 4 years. Two similar-sized plots are left in fallow at any given time, for a total of three plots. Over the 6-year period, a total of 12 units of land are cropped. Farmers adding an abonera field to their system (scenarios B and C) require four plots, three to maintain the bush-fallow rotation and a fourth for the abonera. This represents an increase of 33% in the number of plots cultivated. In scenario B, the total area cropped with maize resulting from the addition of an abonera increases by 158%, assuming that farmers make full use for maize of each land unit opened for cultivation. In scenario C, the total area cropped with maize also increases (58%). Furthermore, farmers gain greater flexibility in the use of the plots dedicated to the bush-fallow system, as they can either grow a different crop in the second season (for example, beans) or simply leave the plot in fallow. In both scenarios, the addition of one plot under the abonera system to the maize-production system represents a significant increase in LUI.
Farm-survey data show that farm management in northern Honduras is divided almost equally among these three hypothetical scenarios. A third of the farmers surveyed continue to manage all of their maize in the bush-fallow system. Another third use both cropping systems simultaneously within the same farm and within the same season. For these farmers, adoption of the abonera system does not replace the bush-fallow system but adds to it. Finally, a third of the farmers surveyed grow all of their second-season maize in abonera fields and all of their first-season maize in fields cleared from bush fallow. First-season fields are either left fallow during the second season or planted to other annual crops, such as beans and yucca. Farmers who adopt the abonera system (scenarios B and C in Figure 21) typically plant two plots of maize in the second season, whereas farmers without aboneras (scenario A) crop only one plot. The total amount of maize is also greater among farmers using the abonera system, especially during the second season. Adopters plant an average of 1.91 ha of maize in the second season, whereas nonadopters plant only 1.24 ha (P <= 0.05; Table 42). These comparisons were made for landowners only, as they have more flexibility than tenants in the adoption decision (see Chapter 7).
Labour use The introduction of the abonera system to northern Honduras modified not only farm-level land allocations but also the allocation of labour resources. Table 43 shows the monthly labour demands for maize production at the farm level, estimated for the three groups of farmers outlined above: nonadopters (scenario A), farmers who use both systems to grow second-season maize (scenario B), and farmers who grow all second-season maize in the abonera system (scenario C). To calculate the labour requirements, we assume that nonadopters grow 1 ha of first- and second-season maize. In the case of partial adoption (scenario B), farmers grow 1 ha of first-season maize, 1 ha of second-season maize in the abonera system, and 1 ha in bush fallow. In the case of total adoption (scenario C), farmers grow 1 ha of first-season maize and 2 ha of second-season maize in the abonera system. Labour requirements are then calculated by multiplying the per unit of land requirements by the area cropped to maize in the first and second seasons. The data indicate that annual labour requirements increased by 39 and 37% for partial and full adoption of the abonera system, respectively. This increment results because the area cropped to maize in the second season is larger than the area cropped to maize in the bush-fallow system. This increase in the area cropped implies additional labour requirements, which must be filled either by family labour or by hired off-farm labour. (Note that the difference between the labour requirements of scenario B and those of scenario C is minimal.) In sum, the abonera system plays a dual role with respect to labour use. First, it has a labour-saving effect per unit of land (field level), a benefit for farmers pressured by seasonal labour shortages within the household. This saving allows farmers to increase the area cropped to maize in the second season with a less than proportional increase in labour use. At the farm level, adopting the abonera system leads to an increase in the total labour used. This benefits households with limited opportunities to invest their labour in productive activities and increases the demand for labour at a regional level — an issue discussed further, below.
Regional impacts The analyses indicate that the abonera system has a farm-level impact on the area allocated to second-season maize, on annual net benefits accruing to farmers, and on aggregate labour demand. Extensive adoption of the abonera system implies that these farm-level effects can be expected to lead to a regional increase in the total area and magnitude of second-season maize production.
Table 44 shows that the contribution of second-season maize to total maize production in northern Honduras grew at a rate of 1.4% a year between 1975/76 and 1994/95, a rate higher than that of the first-season maize. To illustrate more clearly the underlying trend, Figure 22 also shows (with a solid line) the moving average of 3 years. During most of the 1970s and early 1980s, the area allocated to second-season maize represented less than 40% of the total area planted in maize in the region. In the middle 1980s, the second-season share began to increase, and by the end of the decade it had become the most important season. The connection between the adoption of the abonera system and the contribution of second-season maize to total maize production in northern Honduras is difficult to establish because of the possible influence of exogenous factors. Unfortunately, data on the variables of interest disaggregated by cropping season are unavailable at the department level. These would have allowed us to compare areas with and without extensive adoption of the abonera system. The available data can, however, be used to test the association between the growth in the importance of second-season maize and the expansion of the abonera system, which is an indirect measure of regional impacts. To test this association, we regressed the series on the relative share of the area cropped in second-season maize (At) on the percentage of farmers who adopted the abonera system (Aat) and on the ratio of second- to first-season maize prices, lagged 1 year (pmt-1). To estimate the pattern of adoption over time, we fitted a logistic function to the farm-survey data from the department of Atlántida. The logistic equation has the following form: Y = K/(1 + e-a-bt) [4] where K is the adoption ceiling; t is time (in years); and a and b are unknown parameters to be estimated (CIMMYT Economics Program 1993). A K of 70% was assumed. This value is reasonable, given that land ownership seems to be an important factor influencing the adoption of the abonera system (see Chapter 7) and that about 75% of farmers in the region are landowners. We estimated the equation by ordinary least squares, transforming the equation using the value of K defined at 70%: Y = -6.63 + 0.437t [5] where Y is the transformed variable, ln (Yt/K - Yt), that allows linearization of the equation; values in parentheses are t statistics; and ** indicates that the associated coefficient is significant (P <= 0.01). Figure 23 shows the observed and estimated adoption pattern. Figure 23. Observed and estimated patterns of diffusion of the abonera system, northern Honduras Analysis of the association between the two series yielded the following result: At = 0.33 + 0.18Aat+ 0.03pmt-1 [6] where values in parentheses indicate t values; and ** indicates that the coefficient is significant (P <=0.01). The value of the Durbin-Watson test indicates the absence of autocorrelation in the estimated equation. The impact of the expansion of the abonera system on the relative importance of the second season to maize supply is reflected in the highly significant coefficient of the adoption variable. An increase of 10% in the number of farmers who adopted the abonera system in the study area resulted in an increase of almost 2% in the relative importance of the second season to maize supply at the regional level. Although the action of other factors affecting land allocation between seasons cannot be ruled out, no other technological innovations with the potential to produce the observed shift in the interseason land allocation were introduced during this period. A comparative analysis of maize-production technology from 1982/83 to 1992/93 showed that no significant changes occurred in that time, other than the introduction of the abonera system (Sain and Matute Ortíz 1992). Although the analysis is indirect, it suggests that the development and diffusion of the abonera system stimulated second-season maize production, a development that in turn may have raised farmer incomes and demand for labour at the regional level.
Land-rental marketsThe development of the abonera system also seems to have had an impact on regional land-rental markets. The ability of the abonera system to increase the second-season maize productivity of land is well known to farmers and is reflected in their willingness to pay more rent for land planted to velvetbean. Abonera rental markets were studied in the context of broader trends in markets for land in the hillsides of northern Honduras. The analysis determined that the selling or buying price of agricultural land is influenced by its ability to produce long-run economic rents and by other factors, such as the degree of urbanization and accessibility (distance to roads), and some macroeconomic variables, such as the inflation rate. By contrast, the rental market for agricultural land depends mainly on specific short-run land productivity. A farmer wishing to rent a plot for a single year or a single cropping season will pay close attention to factors related to land fertility, rather than to other types of factors. Table 45 shows that land-rental prices in northern Honduras vary according to the type of vegetation dominant on the land. The rental price of 30.00 USD ha-1 for an established abonera (3 years or more) represents a significant increase (67%) relative to the rental price for land that has been in fallow or is under pasture. The absolute difference of 12.00 USD ha-1 represents the gain that farmers perceive in sowing maize in a plot of land under the abonera system if we assume access to perfect market information and no transaction costs. This value is lower, however, than the estimated difference between the average net benefits from sowing maize in an established abonera and those from the bush-fallow system (first and second season). The discrepancy may be attributed partially to profits accrued to the tenant and partially to land-rental market distortions. Among the most important would be farmers' lack of information about the real gain in the land's productivity, the impact of alternative land uses, and changes in agricultural policies. For example, massive land buying by international enterprises to produce pineapple has been an important distorting factor in the land market in the area. Furthermore, maize pricing and credit policies have discouraged maize production, promoting a shift to alternative uses of land. The economic reasons for this change in land use are discussed briefly below.
Comparative profitability of maize productionAlthough the abonera system is clearly economically superior to the bush-fallow system, it is not the only option available to regional farmers. Despite its merits, the short velvetbean fallow used in the abonera system still limits maize production to one harvest per year, whereas two crops are feasible if the farmer uses external inputs, such as chemical fertilizers, and mechanized weed control. Furthermore, the abonera system does not lend itself to the periodic cultivation of other annual crops — such as beans, rice, and chilies — or sequential rotations with pasture for grazing cattle. Comparison of the costs and benefits of these alternative uses of available land, labour, and capital would provide a more complete picture of the economic implications of the abonera system and the reasons why hillside farmers continue to maintain some land under the bush-fallow system. Unfortunately, a systematic discussion of this is beyond the scope of this study, partly because of the complexity and amount of data needed to shed light on these issues. An indication of the most important comparisons can be gleaned from the few other regional studies so far undertaken to consider this topic, together with some qualitative data of our own. Flores (1993) compared the abonera system with a mechanized fertilizer-based system for producing maize; both systems were located on flatlands of the coastal plain. He estimated that mechanized and fertilized maize production gave farmers 18% higher net profits per hectare of land but considerably lower returns per unit of capital invested (30% lower than in the abonera system). Public credit played an important role in maintaining the high-external-input system, a service not generally available to farmers in the hillside areas. Flores also noted that 52% of the total cash expenditures in the abonera system were returned to local farmers in the form of wages for work, but some 72% of the financial costs in the mechanized system were for inputs and services from outside the community. Thus, although the high-external-input system is more profitable from the farmers' perspective, it can also be considered less beneficial to the local economy. Rubén et al. (1997) used a production-function approach in a comparative study of the abonera system and a high-external-input system and found that the relative productivity of the abonera system is extremely vulnerable to the vagaries of maize prices — a finding consistent with our analysis in Chapter 7 of factors influencing adoption. Humphries (in press) estimated that summer-bean production brings an annual net return of 300 USD ha-1, whereas winter beans gave an even higher return (about 400 USD ha-1). Returns on the production of Tabasco chilies for regional industrial markets were considerably higher, about 2000 USD ha-1, according to her estimates. These returns are vastly superior to the 100 USD ha-1 return she estimated for maize grown in an abonera system, although they are comparable to our own estimates. She noted, however, that the risk of bean-crop failure is much higher than that for maize and that the loss of soil in bean production (especially summer beans) is extremely high. Tabasco-chili production also entails high risks and requires the frequent application of pesticides to ensure a healthy crop. The economic implications of these risks and the costs of long-term degradation of soil resources cannot be quantified from the available data. The profitability of annual crops cannot be compared with that of cattle production solely on the basis of returns per unit of land because of the fundamental differences in the land-management practices of the two activities. Taking a whole-farm approach, however, Humphries (in press) estimated that a farmer with three milk-producing cows could realize yearly profits as high as those obtained by a typical hillside producer of maize and beans. (The typical farmer used in the calculation grows 3 ha of maize [2 ha in an abonera system and 1 ha in a bush-fallow system] and 1 ha of beans over the two bean cycles.) Interviews we conducted with several ranchers near San Francisco de Saco, Atlántida, suggest that a herd of 10 milking cows can easily generate total earnings of about 2700 USD, a sizable income compared with that from maize farming or wage work. (A herd of 10 milking cows, each producing 5 L d-1 for 200 d year-1, could be expected to generate total earnings of 2700 USD, assuming a milk price of 0.25 USD L-1.) In both studies, ranchers emphasized that dairy production is much less risky and requires considerably less physical effort than the very difficult and uncertain task of maize farming. These advantages are all the more compelling in light of increasing regional demand for milk and milk products, such as cheese. ConclusionsField- and farm-level analyses of the abonera system indicate that it is significantly more profitable than the bush-fallow system. Land-use intensity is greater in the abonera system (50% LUI, compared with 33% in the bush-fallow system), and net returns per units of land and labour are considerably higher. These net benefits are realized, however, after a 2-year period, during which farmers invest labour in velvetbean establishment and forego the benefits of maize production on that parcel of land for the first rainy season following establishment. After the abonera system is established, the probability of higher net returns per units of land and labour is very high (60–80%). The probabilistic CBA suggests that factors affecting farmers' planning horizons (such as the security of access to land) are more likely to influence their adoption of the abonera system than factors affecting farmers' sensitivity to discounting future benefits (such as vulnerability to shortfalls in household supply of maize). One implication is that small-scale farmers cannot be assumed to simply reject practices with investment strategies based on discounted future benefits. At least in this case, with a modest planning horizon (more than 2 years), farmers with virtually any tendency to discount future benefits are justified in investing in the abonera system. The profitability of the abonera system is sensitive to changes in the relative yield of maize in the two alternative systems, as well as in the seasonality of maize prices. However, these factors will be subject to no change in the near future. Yields in the bush-fallow system are likely to remain what they are, as a result of constraints on the use of chemical fertilizer in the region (absence of credit and high costs of transportation to remote fields) and the soil losses to be expected from intensification of the bush-fallow systems on hillsides. Rising trends in international maize prices are likely to suppress maize imports, thereby also enhancing the seasonality of maize prices and the relative profitability of the abonera system. Higher returns per units of land and labour in the abonera system seem to make it the economically logical way to grow maize. However, farmers' decision-making is influenced by food-security concerns. They are unwilling to forego first-season maize production altogether and consequently always maintain some land under the bush-fallow system. Some farmers (two-thirds of the farmers surveyed) combine the abonera system with the less profitable bush-fallow system, whereas the rest stick to the bush-fallow system for all their maize production. The economic implications of the cropping patterns available to farmers are twofold. Farmers incorporating the abonera system in their farms can easily increase the total land dedicated to second-season maize, with a less than proportional increase in labour costs. This effect, combined with an increase in LUI under the abonera system, results in an overall increase in labour use at the farm level — an important economic impact in a country where scarce opportunities exist for profitably investing family labour. With these factors impacting at the regional level, the abonera system has probably increased the relative contribution of second-season maize to total maize production and to overall levels of maize production for the region as a whole. The potential of the abonera system to generate higher profits has also stimulated the development of a land-rental market for aboneras, which rent for higher prices than other types of land. Document(s) 1 of 17
|
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| guest (Read)(Ottawa) Login | Home|Careers|Copyright and Terms of Use|General Infomation|Contact Us|Low bandwidth |
2), where the mean is µ ; and the variability around the mean (variance) is 
