Sunday, September 24, 2017

It’s Decision Time for Farmers
Peter Gambara
Zimbabwe Sunday Mail

The summer season is upon us and a lot of farmers are contemplating what crops they should grow.

Since Government introduced soyabeans to the Command Agriculture programme this year, I have heard some farmers debating whether they should incorporate both crops in their cropping programme and, if so, how many hectares of each crop they should grow.

In this article, I look at how profitable it is to grow some of the most common crops in Zimbabwe.

In order for farmers to be able to compare how profitable it is to grow each of the crops, it is essential to look at each crop’s Gross Margin Budget.

Such a budget simply looks at how much income one will get per hectare, how much it costs to grow a hectare of the crop, and how much money the farmer will be left with after meeting those costs.

It is therefore necessary to know the recommended seed, fertiliser and chemical rates as well as the diesel required to till a hectare, expected yield levels and prevailing market prices.

I will start with the most common crop in Zimbabwe — maize.

The Command Agriculture programme set the target for maize at 5 tonnes per hectare.  At a GMB producer price of $390 per tonne, a farmer will rack in US$1 950 per hectare before costs.

The programme recommends basal fertiliser of 350 to 400 kilogrammes per hectare (kg per ha), whilst top dressing fertiliser is recommended at 350kg per ha. A bag of basal fertiliser sells for around US$29 per 50kg, whilst a bag of AN or Urea sells for around US$32 per 50kg. One requires 25kg of seed per hectare and this costs US$60 for a 25kg of short to medium season variety and US$90 for a long season variety.

It requires about 100 litres of diesel to plough, disc, plant, apply herbicides and harvest the maize using a combine harvester.  Its costs approximately US$70 per ha to hire a tractor drawn disc, US$70 to US$80 per ha to hire a tractor-drawn planter, US$20 per ha to hire a tractor-drawn boom sprayer and US$100 per ha to hire a plough.

The total costs per hectare can then be summarised as follows — tractor for tillage US$70, diesel for tillage US$96, seed US$60 to US$90, basal and top dressing fertilisers US$442, herbicides and insecticides US$61, combine harvesting US$104, wages US$96.

These give a total variable cost of US$974 per hectare and a gross margin of US$970 per hectare. With most crops, the total variable costs constitute about 50 percent of the gross income, meaning half of that income goes towards meeting the costs and the farmer remains with the other half.

It therefore will benefit the farmer to increase the yield level per hectare by ensuring that the management levels are good.  They can make sure the planting is done early (maybe with irrigation), the planting is done well, the weed control is effective and done on time, the fertiliser rates are adhered to and the top dressing fertiliser is applied on time and correctly.

If one increases the yield level to say 8 tonnes per hectare, the gross income increases to US$3 120 per hectare and the gross margin will increase to over US$2 000 per hectare. You can imagine what happens to these figures if a farmer increases his or her yield level to 10, 12 or even 16 tonnes per hectare. Soyabeans are being introduced onto the Command Agriculture programme for the first time this season and many farmers would want to know the economics of growing them.

An average farmer will achieve two tonnes per hectare, whilst a good farmer will achieve anything between 2,8 and 3,5 tonnes per hectare.

Only exceptionally good farmers will yield four tonnes per hectare. Soyabeans tend to do better on heavier red soils rather than loamy sandy soils.

One requires approximately 100kg seed per hectare, at least 200kg per ha of basal fertiliser (Compound L instead of the MaizeFert, Compound D), 100kg per ha of top dressing fertiliser. Things like tillage and combine harvesting are the same with maize.

The chemicals also differ, and I would estimate the total cost of herbicides and insecticides at US$88 per hectare.

Soyabeans tend to suffer a lot of attack from leaf-eating insects and require a lot of fungicides.

The total variable costs will amount to between US$600 and US$700 per hectare.

At an average yield of 2,5 tonnes per hectare (2,5 tonnes x US$610 per tonne = US$1  525), the gross margin for soyabeans is approximately US$825 per ha.

This is obviously much lower than the potential income from growing maize.

However, soyabeans provide a big opportunity for farmers to introduce rotation in their farming.

The monoculture practice of growing maize after maize and sometimes after wheat, another cereal, presents its own problems. The maize stalkborer (rukonye) that attacks maize at cob formation stage will generally build up if maize is grown on the same piece of land year after year.

Once the maize crop has matured, some of the stalkborer will hide in the soil, waiting for the next season.

Pests like the notorious fall armyworm that caused a lot of problems for farmers this past season also builds up when one does not rotate crops.

It is essential to break the cycle of the armyworm by incorporating legumes in the rotation.

Last season, a lot of farmers who wanted to grow winter wheat faced a challenge as maize could not be harvested on time as the moisture content was still too high. Soyabeans mature much earlier than maize and therefore soyabean/wheat rotation makes sense.

Many farmers have ventured into flue-cured tobacco growing and it seems they are not making any money, most are just breaking even. I attribute this to low yields per hectare as well as failure to keep costs under control.

A small-scale farmer can easily achieve 2 000kg per ha, a good A2 farmer will target to achieve 3 000kg per ha whilst the exceptionally good farmers who plant an early irrigated crop can achieve 4 500kg per ha.

It is important for these farmers to contain their costs at approximately 50 percent of their income.

The average price at the floors for good tobacco is US$3 per kg, therefore the small-scale farmer will gross US$6 000 per ha, the average A2 farmer US$9000 per ha and the exceptionally good farmer US$13 500 per ha.

Tobacco requires 600kg per ha of Compound C (approximately US450 per ha) basal fertiliser, 100kg per ha of AN (approximately US$70 per ha) and lime and other fertilisers (US$100).

It also requires one to raise seedlings in a seedbed (US$400 per ha) and a lot of spraying is required (about US$400 per ha).

Coal for curing (5 tonnes at US$140 per tonne = US$700), diesel for tillage (US$120 per ha) and to move the cured tobacco from the lands to the barns (US$120 per ha), electricity to run the barns (US$200 per ha) as well as a heavy labour force (average two labourers per ha at US$94 per person x 8 months = US$1 504 per ha).

The packaging used to wrap the tobacco requires US$150 per ha whilst the transportation of the tobacco to the floors will require an additional US$180 per ha.  The total costs for the A2 farmer will therefore total approximately US$5 000 per ha, leaving the farmer with a Gross Margin of approximately US$4 000. However, quite a number of farmers are contracted by tobacco merchants who are willing to provide the farmers with diesel for their own private vehicles and living allowances.

This means the total costs for such farmers balloon to equal the potential income, thereby leaving the farmers with very small gross margins. In all situations, its better to target a high yield. However, some A2 tobacco farmers only achieve 1 500kg per ha, some maize farmers achieve three tonnes per ha and for soyabeans 1,2 tonnes per ha.  With such yields, these farmers are likely to only break even every year.

What are some of the reasons for achieving low incomes from farming?

Like I have indicated above, the major factor is low yield and a number of factors that include poor fertiliser management. Poor fertiliser management includes applying low fertiliser rates, poor placement of fertilisers and poor timing of top dressing fertilisers.

Maize top dressing fertiliser should ideally be applied at four, six and eight weeks after emergence.  Placement of fertiliser should also be such that it is easily accessible to the plants.  Most of the low yields in tobacco are due to low fertiliser rates and in some cases use of completely wrong fertilisers.

Poor weed control also contributes to low yields in a number of crops.

Many farmers also sometimes overlook the issue of plant population and yet this has a major impact on the yield. Most of them are used to inter-row spacings of 90cm and in-row spacings of 30cm in maize, giving a plant population of approximately 37 000 plants per hectare.

However, to be able to achieve yields of 10 tonnes per ha and above, farmers should aim for at least 50 000 plants per hectare.

That means reducing the inter-row spacing to 75cm and the in-row spacing to 25cm, to give a plant population of at least 53 000 plants per ha.

The ideal plant population in tobacco should be approximately 16 000 plants per ha.

When Government embarked on the Fast Track Land Reform Programme, there was massive response from across the whole country.  Seventeen years down the line, some farmers remain poor because they are failing to master the art of profitable farming. They are failing to pay attention to the details outlined above.

Farmers should always attend field days, demonstration plots and agricultural shows so as to learn from those who have succeeded in the agric sector.

They should also consult their Agritex extension officers whenever they need guidance.

Farming can be very profitable but it needs determined farmers who keep an eye on the costs involved.

Farming by remote control will never work.

Good luck in choosing your crop combinations for the new season.

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