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Determining comparative economics of some new planting pattern of sugarcane.

Introduction:

Sugarcane is an important cash crop of Pakistan. it is mainly grown for sugar and jaggary production. It is an important source of income and employment for the farming community. It also forms basis for many important industries like sugar, beverages, chipboard, paper, confectionary etc. and provides raw materials to mainly other industries such as chemicals, plastics, paints, synthetics, fibre, insecticides, detergents, etc.

Sugarcane production in Pakistan has increased over time, however this increase has mainly resulted from an expansion in area, whereas yields have increased only slightly. Area, production and yield over the period of 1947-88 grew at an average annual rate of 3.79%, 4.53 and 0.74 per cent respectively (5). in 1988-89, the area under sugar cane was 877 thousand hectares which increased to 885 thousand hectares in 1992-93 and sugarcane production increased from 36976 thousand tons in 1988-89 to 38059 thousand tons in 1992-93. Thus during the same period cane yield increased from 42.2 tons to 43.0 tons per hectare (1) It shows that despite expansion in production over the years, increase in the productivity per unit of area has been very low in Pakistan.

The average sugarcane yields in Pakistan have remained between 4045 tons per hectare, which are considerably less than those obtained in many other countries. Average yield of sugarcane in the world is around 60 metric tons per hectare, while India and Egypt are obtaining 65 tons and 103 tons per hectare respectively, (2) Thus Egypt with highest cane yield in the world is getting about 140 per cent higher yield than Pakistan. India with almost similar soil and climatic conditions is obtaining about 51 per cent higher cane yield than Pakistan.

Within Pakistan, even there exists a large yield gap between yield obtained by the progressive farmers and that of national average. Moreover, much higher production potential has been exhibited at the research stations.

It has been observed that conventional planting methods and low plant population were responsible for low yields (4).

Most recently some new patterns of planting sugarcane have been developed at research stations which not only facilitate doing some essential operations freely and conveniently, but also help establish appropriate plant population per unit of area and thus increase production. The main objective of these experiments has been to carry out experiments to see the effects of various plantation techniques on yield of sugarcane. A lot of data were available with these research stations which could be put to economic analysis to assess the benefits and costs of alternative planting methods.

The present study is directed to assess and compare gross and net benefits of the use of various sugarcane planting methods and to suggest the most appropriate planting pattern. It can help growers of sugarcane to increase their cane yields at the lowest possible cost.

Materials and Methods

The present study was based on Experimental data of different planting patterns of sugarcane collected from experiments conducted in 1989-91 at Post-Graduate Agricultural Research Station (PARS), University of Agriculture, Faisalabad.

Following planting techniques of sugarcane were compared.

PT1 = 90 cm spaced double row strips.

PT2 = 100 cm spaced 100x100 cm pits.

PT3 = 75 cm spaced 100x100 cm pits.

PT4 = 90 cm spaced 90x90 cm pits.

PT5 = 75 cm spaced 90x90 cm pits.

The data were analysed by using partial budgeting technique described by CIMMYT (1988). Partial budgeting technique is mostly used to compare new technologies with current farmer practices, to judge the possibility of adoption by the farmers. It is simply a part of an enterprise budget or crop rotation or farming systems budget. Basically, it involves selecting out only those costs that vary with the particular planting technique being analysed. In this study different types of planting techniques of sugarcane crop were compared with each other and only those costs were included in analysis that varied with the use of alternative planting technique. For partial budgeting analysis following procedure was followed.

* Average yield of sugarcane crop was calculated for each planting technique.

* The farmers often receive less yield than researchers, even when they apply the same technology. It is mainly due to difference in management. It has been estimated that on average, farmers get 10-20 percent less yield as compared to experimental yield. To reach at farmer level, the average yields need to be adjusted down and by 15 percent (CIMMYT, 1988).

* Field price of sugarcane was calculated. Field price of a product is defined as the value to the farmer of an additional unit of production in the field prior to harvest. It is calculated by subtracting from the sale price of the product those costs which are roughly proportional to yield. These costs usually include cleaning, transport from field to point of sale, farmers storage costs and octroi charges etc. Field price of output comes to about 10-15 percent less as compared to the sale price of sugarcane in the market. Field price of sugarcane was calculated by discounting the sale price of sugarcane in the market by 15%.

* By multiplying field price and adjusted yields, gross field benefits for each treatment were calculated.

* The next step used in partial budgeting technique was to calculate the costs that vary. Costs that vary are the costs of purchased inputs (like weedicide, fertilizer, farm yard manure etc), labour (family or hired) and machinery (owned or rented) that vary between experimental treatments. In this study cash costs included costs of farm yard manure, while the opportunity cost included all the costs of labour from preparatory tillage to digging pits. Then the net field benefits were calculated by subtracting the total costs that vary from gross field benefits. The calculation of net field benefits for each planting technique [TABULAR DATA FOR TABLE 1 OMITTED] was only an intermediate step. The planting technique which gave the highest net field benefits could not be recommended as the best technique because of some crucial aspects of farmer conditions, namely capital scarcity, yield uncertainty and risk aversion had yet to be included in the analysis.

* The next step was to undertake Dominance Analysis in which clearly unprofitable sugarcane planting techniques (treatments) were discarded. Such techniques (treatments) are called as Dominated Treatments. These treatment were eliminated from further analysis. This elimination signifies the fact that value of increase in yield is not enough to compensate for the increase in costs in a dominated treatment. For increasing farmers income and welfare, it is important to pay more attention to net benefits rather than yields.

* After discarding the dominated treatments, marginal analysis was done. Marginal Analysis included the calculation of marginal returns of each treatment, which is an expression in percentage terms of relationship between the marginal net benefits (i.e the change in net benefits) and the marginal cost (i.e the change in total costs that vary). Finally, the treatment giving higher marginal rate of return was recommended.

* Farmers confront risk due to price variation. To avert the element of risk, effects of price variation were analysed. Here the analysis was carried out twice. Firstly assuming a cost-over run of 20 percent while keeping the benefits the same, the marginal analysis was conducted. Secondly assuming benefits reduction of 20 percent and costs kept constant, the analysis was rerun. Finally, the results of "Cost over run" and "benefits reduction" options were compared with the original analysis.

Results and Discussion

As described in the methodology, the data were analysed using partial budgeting technique described by CIMMYT (3). For this purpose a partial budget was constructed as shown in table:

* It provides a convenient format for organizing the partial budget information. The alternative choices of different planting techniques of sugarcane have been shown in the table In the first (treatment) step of partial budget, average yield of each planting technique (treatment) was calculated, as given in table.

* Then, the yield was adjusted 15 percent downwards to cover the difference in management practices between a research station and a common farmer. The second step was to calculate gross field.
TABLE-II

The Dominance Analysis

 Total costs Net field
 that vary Benefits
Planting Patterns (Rs./ha) (Rs./ha)

PT1 (90 cm spaced double row strips) 4175 28781

PT2 (100 cm spaced 100x100 cm pits) 6191 29385
PT4 (90 cm spaced 90x90 cm pits) 7454 30419
PT3 (75 cm spaced 100x100 cm pits) 7840 28473(D)
PT5 (75 cm spaced 90x90 cm pits) 8720 29463(D)

PT = Planting Technique
D = Dominated planting technique.
TABLE-III

The Marginal Analysis

Marginal Rate of Return for Cost-over-run Option

 Total Marginal Marginal
 Costs Marginal Net Field Net Field Rate of
Planting that vary Costs Benefits Benefits Return (%)
Pattern Rs./ha (Rs.ha) (Rs./ha) (Rs./ha) (5 3x100

PT1 4174 - 28601 - -
PT2 6191 2017 29385 784 39%
PT4 7454 1263 30419 1034 82%


Benefits of each planting technique. In the third step, total costs that vary were calculated as shown in table-I. Then net field benefits were calculated by subtracting total costs that vary from gross field benefits. Maximum net field benefits were obtained from treatment 4. (PT4). (in planting pattern with 90 cm spaced 90x90 cm pits).

However, net field benefits is not final criterion for recommendation to a common farmer because it does not tell about returns to investment. Before calculating returns to investment, dominance analysis was done in which dominated planting techniques were eliminated as shown in table-II:

Table 2 shows that PT3 and PT5 are dominated planting techniques and were thus excluded from further analysis.

For the calculation of returns to investment, marginal analysis was done of the remaining undominated treatments. The results of marginal analysis showed that PT4 (90 cm spaced 90x90 cm pits) gave the highest marginal rate of return (82%). The same planting technique was also chosen as the recommended planting pattern in the partial budget analysis (table 1) by having the highest net benefits among all of the five planting techniques. Therefore, PT4 (90 cm spaced 90x90 cm pit) was acceptable as the best sugarcane planting technique and was recommended for farmers adoption.

Finally, to check risks due to price variability for both inputs and outputs, sensitivity analysis was done. The first part of sensitivity analysis was done by assuming cost over-run as shown in table-IV.

The significance of marginal analysis results, in case of "Cost-over-run" however remained the same. The best alternative here also was planting technique 4 (90 cm spaced 90x90 cm pits). The second option for sensitivity analysis pertained to "benefits reduction" Table-V.

Here also PT4 (90 cm spaced 90x90 cm pits) proved to be the best alternative as compared to other alternative considered in this analysis.

CONCLUSIONS AND SUGGESTIONS

Finally, on the basis of experimental data analysed in this study an appropriate recommendation can be made about PT4 i.e. (90 cm spaced 90x90 cm pits). This recommendation appears highly stable, since even the increased price of inputs and reduced price of output had no effect on this recommendation. Therefore, the farmers of sugarcane growing areas are recommended to use 90 cm spaced 90x90 cm pits as the most suitable planting method of sugarcane cultivation.

This planting method should very skilfully be disseminated to the common farmers through demonstration plots, mass media like radio, television, newspapers, scientific journals and handouts. This new recommended technique, however, suffers from one limitation. Digging of pits is highly labour intensive and time consuming process.

On the other hand, there is shortage of labour during peak periods. As a result, farmers will have to pay more for digging of pits, which will result in high cost of plantation. To save manual labour some new technologies of digging pits will have to be evolved.

By exploring some further aspects related to this new technique of planting sugarcane like most appropriate sowing depth, shape and size of pits, standardization of planting density per pit, and labour input etc. can be made more beneficial.
TABLE-IV

Marginal Rate of Return for Cost-over-run Option

 Total Marginal Marginal
 Costs Marginal Net Field Net Field Rate of
Planting that vary Costs Benefits Benefits Return (%)
Pattern Rs./ha (Rs.ha) (Rs./ha) (Rs./ha) (5 3x100)

PT1 5005 - 26544 - -
PT2 7428 2423 27741 197 8%
PT4 8944 1516 27185 444 29%
TABLE-V:

Marginal Rate of Return for Benefits Reduction Option

 Total Marginal Marginal
 Costs Marginal Net Field Net Field Rate of
Planting that vary Costs Benefits Benefits Return (%)
Pattern Rs./ha (Rs./ha) (Rs./ha) (Rs./ha) (5 3x100)
(1) (2) (3) (4) (5) (6)

PT1 4502 - 22010 - -
PT2 6191 1689 22270 260 16%
PT4 7454 1263 22871 601 47%


REFERENCES

1. Anonymous 1992-93 Agriculture Statistics of Pakistan, Ministry of Food and Agriculture and Livestock, Economic Wing, Islamabad.

2. Anonymous 1994 FAO Year Book; Production, Vol. 48, Food and Agriculture Organizations of United Nations, Rome.

3. CIMMYT 1988 From Agronomic data to farmer Recommendations: An Economic Training Manual, Mexico, D.F.

4. Chaffar, A. 1990 Studies on flat versus pit plantation of sugarcane. M.Sc. Thesis, Deptt. of Agronomy, University of Agriculture, Faisalabad.

5. Mahmood, A and Walters, F. 1990 Pakistan Agriculture, A description of Pakistan's Agricultural Economy, Directorate of Agri. Policy and chemonics International Consulting, Division for the EAN/Economic Analysis Network Project, Government of Pakistan and U.S. AID, Islamabad.
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Publication:Economic Review
Date:Dec 1, 1996
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