The Impact of Precision Farming on the Profitability of Selected Maize Irrigation Farms in the Northern Cape Province

The Impact of Precision Farming on the Profitability of Selected Maize Irrigation Farms in the Northern Cape Province
Title The Impact of Precision Farming on the Profitability of Selected Maize Irrigation Farms in the Northern Cape Province PDF eBook
Author Stefanus Francois Van Zyl
Publisher
Pages
Release 2013
Genre
ISBN

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Maize is the most important grain crop produced in South Africa, serving as a food source for humans and animals, an input provider to other sectors, a source of job creation, a contributor of value added to the national economy, and an earner of foreign exchange. The South African maize industry plays an important role in the South African economy and consequently its role players should be supported to promote the industry. However, since the abolishment of the agricultural marketing boards and the deregulation of South African agriculture, farmers have suddenly found themselves exposed to global competition and a liberalised economy. Maize prices are uncertain and volatile, leading to increased risk. In addition, input prices have increased more rapidly than maize prices in some instances, and since no government protection exists, the cost squeeze effect places many farmers in a financial predicament. In order to mitigate the cost squeeze effect, farmers have started exploring farming methods and strategies that can improve their financial position. Precision farming (PF) is identified as a technological tool that can improve the profitability of a maize farm through higher yields and lower input costs, and can also indirectly assist in the general farm management and financial functions on the farm. The literature indicates that PF has been successfully implemented on various occasions with subsequent benefits, whether financial or qualitative. It could also be a useful tool to improve the profitability of South African maize farmers. Despite its various benefits, PF is associated with high capital expenditures and therefore farmers are reluctant to implement this technology on their farms. However, a PF service system that requires little capital expenditure is implemented by an agribusiness (Griekwaland-Wes Ko??perasie) in the Northern Cape Province. Farmers who are part of this program only pay PF service fees that are charged on a perhectare basis. Most of the PF technologies and knowledge are provided by GWK and/or affiliated fertilizer companies, which subsequently mitigate the burden of high capital expenditures. The general objective of the study was to investigate the impact of PF on the profitability of selected maize irrigation farms in the Northern Cape Province. This was achieved by comparing the profitability and risk position of selected farms under a conventional farming (CF) system with the profitability of the same farms when converting to a PF system. The specific objectives of the study were to determine whether PF would generate better profits than CF: to determine whether PF would improve the farmer's ability to repay his debt and generate an income (thereby improving the financial survivability of the farm): to determine whether PF would improve the debt-to-asset position of the farmer: and to determine whether PF is less risky than CF with respect to net farm income and cash position. The Bureau for Food and Agricultural Policy (BFAP) farm-level model developed by Strauss (2005) proved to be a useful tool to achieve the set objectives, since the BFAP farm-level model is linked with the BFAP sector model, which enables it to accurately analyse the impact of changes in policies and markets at both farm and sector level in South Africa. A positivistic approach was followed in order to answer the question,???What will the likely outcome be?︠?︡ The model has the capacity to do simulations in both deterministic and stochastic modes. Three maize irrigation farms in the Northern Cape Province were chosen by a panel of agricultural specialists who are accustomed with the irrigation farms and PF system in this province. The farms were analysed by means of the BFAP farm-level model in order to determine the impact of PF on the profitability of each farm. The BFAP baseline of 2008 was used for this purpose. Key input variables were identified and simulated based on the BFAP baseline of 2008, as well as actual data, assumptions regarding PF and CF farming, and reported features and benefits associated with PF. In order to simulate the risk associated with CF and PF through stochastic modelling, correlated probability distributions were assigned to the relevant key input variables by de-trending the historical data of the key input variables. A correlation matrix based on the absolute deviation of a specific variable from its trend was subsequently constructed. Each variable was then simulated by means of a correlated empirical distribution, with 500 model iterations being run for each simulation in order to obtain stable probability distributions. From the results obtained in the study, the conclusion can be drawn that PF not only improves profit margins, but indirectly contributes to improved financial management. Considering the higher profit margins, more cash is at the disposal of the farmer. When this extra cash is again reinvested in the farming business, debt (in terms of production loans and medium- and long term loans) can be repaid more quickly and/or less debt has to be incurred, leading to lower interest payments that in turn further increase profit margins, ultimately improving the debt and cash position of the farm. The results also indicate that the risk position of the participating farms improved significantly with the implementation of PF. It can therefore be concluded that PF could also serve as a valuable risk management tool. From the discussions with the farmers it also became apparent that their overall farm management abilities were improved significantly, due to the informative nature of PF. Based on the results of this study, it can be concluded that the hypothesis as stated in Chapter 1 cannot be rejected. In addition, several other aspects pertaining to PF should be considered. Firstly, the results are applicable to the specific participating farms in the study only, and cannot be attributed to all maize farms in general. Secondly, despite a meticulous process of data verification and validation, the conclusions drawn in the study are based on the quality of the data provided by the stakeholders. Thirdly, factors such as farming operations, management decisions, market, weather and disease conditions might divert from the assumptions made in the study and thereby affect the actual results in future. Fourthly, since the study focuses solely on irrigation farming, a similar study can be conducted on dryland maize farming, since the majority of maize is produced under dryland conditions. Fifthly, the study could serve as a starting point for a comprehensive study on the impact of PF on maize farming throughout South Africa. Sixthly, the study could pave the way for an investigation into using PF as a tool to negotiate lower crop insurance premiums for farmers. Lastly, it would be useful to conduct a similar study on the impact of PF on maize farming where farmers are responsible for the acquisition of their own PF equipment, unlike on the participating farms where no extra capital expenditures were required. This could enable researchers to provide a better answer on the question of costs involved when converting to a PF system, as well as the ideal farm size in terms of economies of scale. Copyright.

Handbook of Precision Agriculture

Handbook of Precision Agriculture
Title Handbook of Precision Agriculture PDF eBook
Author Ancha Srinivasan
Publisher CRC Press
Pages 734
Release 2006-09-06
Genre Science
ISBN 1482277964

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A thorough, critical, and up-to-date look at precision farming around the world In most developing countries, farming is the best safety net against hunger and keeping production costs under control without sacrificing crop yield is essential for survival. The Handbook of Precision Agriculture presents up-to-date research, field studies,

Precision Farming

Precision Farming
Title Precision Farming PDF eBook
Author K. R. Krishna
Publisher CRC Press
Pages 176
Release 2016-04-19
Genre Science
ISBN 1466578297

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Precision farming involves soil fertility and crop growth monitoring, electronic equipment, remote sensing, global information and positioning systems, computer models, decision support systems, variable-rate technology, and accurate recordkeeping. This book on precision techniques provides valuable information on instrumentation and methodology. I

Farm Profits and Adoption of Precision Agriculture

Farm Profits and Adoption of Precision Agriculture
Title Farm Profits and Adoption of Precision Agriculture PDF eBook
Author U.s. Department of Agriculture
Publisher Createspace Independent Publishing Platform
Pages 46
Release 2017-02-15
Genre
ISBN 9781543136883

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Precision agriculture (PA) and its suite of information technologies-such as soil and yield mapping using a global positioning system (GPS), GPS tractor guidance systems, and variable-rate input application-allow farm operators to fine-tune their production practices. Access to detailed, within-field information can decrease input costs and increase yields. USDA's Agricultural Resource Management Survey shows that these PA technologies were used on roughly 30 to 50 percent of U.S. corn and soybean acres in 2010-12. Previous studies suggest that use of PA is associated with higher profits under certain conditions, but aggregate estimates of these gains have not been available. In this report, a treatment-effects model is developed to estimate factors associated with PA technology adoption rates and the impacts of adoption on profits. Labor and machinery used in production and certain farm characteristics, like farm size, are associated with adoption as well as with two profit measures, net returns and operating profits. The impact of these PA technologies on profits for U.S. corn producers is positive, but small. Keywords: Crop production information technologies, precision agriculture, variablerate technology, soil tests, global positioning system maps, guidance systems.

Precision Farming

Precision Farming
Title Precision Farming PDF eBook
Author
Publisher
Pages 132
Release 2000
Genre Agriculture
ISBN 9780931682841

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Precision Farming

Precision Farming
Title Precision Farming PDF eBook
Author
Publisher
Pages 24
Release 1994
Genre Agriculture
ISBN

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Advances in water research

Advances in water research
Title Advances in water research PDF eBook
Author Nhamo, L.
Publisher IWMI
Pages 16
Release 2023-03-09
Genre Technology & Engineering
ISBN

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Water scarcity has become one of the greatest challenges facing humankind today. Its scarcity is compounded by climate change and increasing demand from a growing population. In South Africa, over 60% of the available freshwater resources are used in agriculture, mainly in irrigated agriculture. There is an urgent need to promote sustainable irrigation technologies that optimize food production without increasing water applied and with positive environmental spinoffs. Sustainable irrigation technologies and practices could enhance water use efficiency (WUE) and productivity in agriculture and reduce environmental burdens, including energy use. This chapter highlights some of the innovative irrigation practices and technologies that enhance food production and, at the same time, reduce water use in agriculture. The chapter broadly discusses WUE and water productivity (WP) in irrigated agriculture from engineering and agronomic perspectives. The chapter further highlights some of the environmental impacts of irrigation expansion and the possible solutions. We further provide the importance of accurate spatial information on irrigated areas to inform policy on irrigation expansion. The Water Research Commission (WRC) of South Africa has been spearheading research on the sustainable use of water for the past 50 years as part of its research agenda. In Ting, D. S.-K.; O’Brien, P. G. (Eds.). Progress in sustainable development: sustainable engineering practices. Amsterdam, Netherlands: Elsevier