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Alternative cropping systems and intensive irrigation under arid zone conditions
Agricultural Systems 38 (1992) 301-318
Alternative Cropping Systems and Intensive Irrigation Under Arid Zone Conditions Ariel Dinar Department of Agricultural Economics, University of California and USDA-ERS, Davis, California 95616, USA
Dan Yaron The Hebrew University of Jerusalem, Rehovot, Israel
& Arieh Baruchin The Jewish Agency, Department of Development, The Negev Region, Beer-Sheva, Israel (Received 24 April 1991; accepted 19 August 1991)
A BSTRA CT Water and land are two inputs that qffect agricultural productivity due to their relative scarcity. Intensified agricultural practices utilizing water and land, as well as other inputs, have been suggested by agronomists and other agricultural researchers as one possible means to increase agricultural production. Intensified agricultural practices tend to be capital intensive, and should be evaluated carefully for their feasibility. A general framework for analysis was suggested and applied to a case study under arid conditions in the Israeli Negev region. Results suggest that certain combinations of crop mix and irrigation technologies provide better opportunities than traditional cropping and irrigation practices. Intens(fication of the production system b)' including double cropping of field crops and incorporation of high-income crops can reduce the burden of the additional irrigational capital cost. INTRODUCTION There is an increasing need for food in m a n y o f the less-developed countries o f the world at the same time that land and water resources are being 301 Agricultural Systems 0308-521X/92/$05.00 O 1992 ElsevierScience Publishers Ltd, England. Printed in Great Britain
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Ariel Dinar, Dan Yaron, Arieh Baruchin
exploited and degraded (Sahn, 1989; Seavoy, 1989). These two problems have been the main forces driving extensive biological and agricultural research to find technological solutions for better use of limited resources (Kaimowitz, 1990). Such solutions may involve intensifying the agricultural production processes by increasing levels of water or fertilizers, improving crop varieties, and introducing high-income crops, double and triple cropping systems, and pressurized water-saving irrigation technologies. Irrigation water practices developed for other regions may not be applicable in large areas of the Middle East and North Africa which suffer from water shortages (Saffaf, 1980). These regions are characterized by relatively shallow soils including some with high gypsum and calcium carbonate content that may cause uneven spatial distribution of irrigation water. Moreover, the sandy soils in these regions tend to have low water retention capacities which preclude the use of traditional gravitation irrigation technologies. The soil properties prevailing in these regions necessitate the use of modern irrigation technologies such as sprinkler and drip systems (Saffaf, 1980). Although these systems are technically and agronomically feasible, their economic feasibility is questionable since they are capital intensive (Table 1) and not all types of cropping systems can bear their costs.
The economic literature dealing with adoption of modern irrigation technologies has focused much attention on analysis of economic conditions such as prices of inputs and outputs affecting the adoption of modern irrigation technologies at crop and farm levels (Caswell & Zilberman, 1986). One obvious strategy for economic use of the modern irrigation technologies is to irrigate high-value crops such as out of season vegetables (Regev et al., 1990) and horticultural crops (Caswell & Zilberman, 1985). However, the markets, both domestic and international, for such products may be limited, and thus would limit the scope of this strategy. This leads to the question: To what extent are intensive land use rotations based on staple crops or some mix of staple crops and high value crops Cdouble cropping') able to support the capital intensive modern technologies? Tsai et aL (1987) used a simulation method to evaluate optimal combinations of multiple cropping systems for a humid region. They estimated the effects of differences in weather conditions on the selection of the system. Several studies have considered irrigation technology selection at the field level (Hill & Keller, 1980; Boggess & Amerling, 1983; Holzapfel et a/., 1985; Taylor, 1986). Many studies exist at farm level which consider optimal water allocation and irrigation technologies to crops and combination of crops (e.g. Yaron & Dinar, 1982; Jones, 1983; Knapp, 1991), but they either lack irrigation technology considerations or do not fully consider many real world constraints affecting farm level operations.
Alternative cropping systems in arid conditions
303
TABLE 1 Summary Cost for Two Irrigation Alternatives a h'rigation component
Main conveyance pipes Combination 1 Linear-moved Drip irrigation Micro-sprinklers Total irrigation fixed costs (including main pipes) Combination 2 Drag-line sprinklers e Drip irrigation Micro-sprinklers Total irrigation fixed costs (including main pipes)
Investment ( US$/ha)
L([e span (),ears)
Annualized cost b (US$/ha)
Equipped area c (ha)
Total annual cost (US$ × 103)
1 398
20
142
670
95.1
804 2 348 2 155
15 8 8
94 408 375
326 220 25
30.8 89-8 9-3
225-0 942 2 348 2 155
20 8 8
96 408 375
360 190 25
34.5 77-5 9.3
216.4
a From Study farm budget files. h Using 8% interest rate; not including operation and maintenance (see text). ' Notice that the area equipped with main conveyance pipes is 670 ha and the area equipped with irrigation technologies is 571 and 575 ha for irrigation combination I and 2, respectively. dUsing two types of systems: center pivot for l l 0 h a and linear move for 216 ha. e Equipment for 60 ha is needed to irrigate 360 ha, assuming irrigation cycle of 8-9 days and additional 25% for safety.
Furthermore, farm-level studies that include modern irrigation technology selection in arid zones, are very scarce (Van Tuijl, 1989). This paper analyses some major strategic alternatives with respect to types of cropping systems which are economically compatible with the cost of capital intensive irrigation systems, namely sprinkler and drip. A fieldand farm-level models are applied to a set of 'best management' practices used by decision-makers in a specific farm in an arid region of Israel. While the analysis is based primarily on the Israeli experience, the authors believe that its implications are general. The next section presents the analytical framework for the analysis. Then, a description of irrigation technologies and potential double cropping systems considered in the analysis is provided with specification of the farm type. Results of field- and farm-level economic analyses are then presented and discussed followed by additional perspectives and conclusions.
Ariel Dinar, Dan Yaron, Arieh Baruchin
304
ECONOMIC F R A M E W O R K TO ASSESS DOUBLE CROPPING VERSUS SINGLE CROPPING SYSTEMS The analysis is performed within two frameworks: (1) at the field level, in order to identify superior crop mix combinations and to establish the conditions (price, inputs level, and yield level) for improved profitability; and (2) at the farm level, where farm characteristics (technology, input constraints, and production quota) are incorporated in order to determine the possible contribution of intensified cropping systems to income under various conditions. Note that with reference to double cropping systems, a distinction should be made between (a) rotation of short-term crops grown in sequence within one growing season using conventional cultivation practices (see note 1), and (b) rotations of longer term crops whose cultivation technology must be modified in order to curtail the growing season and adapt them for rotation within one growing season (see note 2). The current analysis refers to both types with emphasis on the second type of double cropping system.
Field-level analysis Let Z~'jbe the variable cost (excluding water) per unit area of crop k which can be grown in a double cropping system with another crop. Here, i stands for the first crop a n d j is the second crop in that system. Ifk = i or j, and i =j then only a single crop is being grown on that field. W~ is water rate (see note 3), Li~ is labor input, pn is harvest cost per unit of yield, pL is labor price, pW is water price, Yik is yield, and pr is crop yield price. The field level gross margin (I-]kj) which is expressed, for crop k, as returns to land (and water rights (see note 4)), management and capital, is provided by I~ikj
: Yijk ×(PY-pH)-Zikj - Wikj× pW _Likj× pL
where k = i or j. [Iki is calculated for each cropping system. The analysis is applied first to a base case, where labor and water prices reflect existing market conditions and the yield of the second crop reflects average levels. At a second stage, sensitivity analyses are conducted separately for yield level, water, and labor prices. The range of prices addressed in the sensitivity analysis reflect on farm opportunity costs associated with labor and water; and the yield level reflects range of situations where yield of the second crop was lower than the average, due to weather, bad management, etc.
Alternative cropping systems in arid conditions
305
Assuming a profit-maximizing decision-maker, the gross margin for the double cropping system is calculated as
maxD,j=~l-I,kj
fork:i,j
k
which is a simple summation over the two crops grown as a system on that field. The gross margin for the cropping system with the single crop grown on that field is calculated as
Sit = max {l-[jj; l-Ill} In this case, the decision-maker maximizes his gross margin by selecting one crop of the two possible crops to be grown on that field. The selected crop is associated with the highest gross margin per unit of land. To maximize the field-level gross margin (F), the decision-maker selects the highest gross margin between the single cropping system and the double cropping system F = max {Dij; Sit} The analysis assumes that irrigation equipment (capital) decisions are made at a farm-level, rather than a field-level. For example, a given set of irrigation equipment may rotate among different fields within one season. Therefore, the use of gross margin as a criteria is justified here. Irrigation capital cost is then subtracted from the gross margin of either the single or the double system providing returns to land (and water rights) and management.
Farm-level analysis The general formulation of the farm-level model is max f = C'sXs + C'oX. - C'UXN
subject to
QsXs + QoXD < BQ H'sXs + H'oXo < bn r o x o <_B~ F~'sXs + E'oXo <_b~ NNXN + NsXs + NoXo <- BN
RsXs + RoXo > BR Xs, ND, Xo, Xn > O
Ariel Dinar,Dan Yaron,AriehBaruchin
306
where C~, C~ are vectors of net income coefficients for single crops, including perennial crops (1 x ks) (see note 5) and for double cropping systems (1 × ko); C'Nis a vector of market prices (1 × kN) for livestock feeds to be bought outside of the farm; BQ is a vector (1 x kQ) of annual and monthly water constraints of different sources and qualities; bn is the annual amount of available labor on the farm; B r is a vector (kr x 1) of farming constraints pertaining only to double cropping systems. These constraints include certain combinations of crops, and rotation of crops; be is the total available land; B N is a vector (kr x 1) of livestock dietary constraints; and B R is a vector (kR × 1) of other constraints such as marketing, area in perennial crops, etc. Hs, Ho, Es, and Eo are the corresponding vectors of input-output coefficients, and Qs, QD, To, NN, No, Ns, Rs, Ro are the corresponding matrices of input-output coefficients. For example, Qs and Qo are per unit area water coefficients recommended as 'best management' practices for a given crop (in single and double cropping systems, respectively). A discrete number of water--crop combinations can be determined here for each crop, such as 'crop x irrigated with Q~ m3/ha of water', or 'crop x irrigated with Qs2 m3/ha of water'. Each activity is associated with a set of fixed input-output coefficients and a gross margin value. Using this framework, the changes in input-output prices and/or constraint levels will result in a change in activities levels (area of a given combination of crop-irrigation technology), which is a reflection of the behavioral character of decision-makers in arid regions regarding levels of water constraints. The decision-maker can choose any technically feasible combination of the crop-water levels in his objective function. The optimal solution includes the following values: X* which is a vector of areas under a given irrigation technology devoted to perennial crops and other single cropping systems; it includes also X~ and X~ which are, respectively, vectors of area under a given irrigation technology devoted to double cropping systems and the amounts of feed purchased for the farm's livestock. The irrigation capital cost is calculated externally to the model and the annual fixed costs were subtracted from the gross margin provided in the optimal solution (see note 6). ¢
i
I
I
DATA A N D E M P I R I C A L SPECIFICATIONS The field- and farm-level frameworks were applied to a representative kibbutz farm (pl. kibbutzim, collective farms) in the south-western part of the Negev region of Israel. This region is characterized by sandy soils, hot
Alternative cropping systems in arid conditions
307
summers, mild winters with low precipitation, and a shortage of good water quality available for irrigation. The mix of activities and production coefficients for the farm were provided by the farm management and extension advisors (Dinar & Baruchin, 1988). They consist of vectors of annual and monthly water application rates per ha, annual and monthly labor requirements, and coefficients related to other input constraints. If a crop can be irrigated by either fresh water or saline, two different activities for that crop are defined with the input and gross margin coefficients formulated accordingly. Crop budgets for single and double cropping practices to be analyzed in this study were derived from two sources: the computerized budgets recorded by the extension service, Israel Ministry of Agriculture, July, 1985, and by the Jewish Agency, The Negev Region, October 1985. Adjustments were made by extension specialists for the region and farm conditions (specific budgets can be found in Dinar and Baruchin (1988)). All monetary values are in terms of June 1987 US dollars. The farm has an annual freshwater allotment of 1 8 0 0 0 0 0 m 3 (1000 m 3 = 0"816 acre foot) provided from the national water system with a constraint for peak month at 300 000 m 3. This water is provided to the farm at a fixed price of nearly US$0.10/m 3. Additional water for irrigation is available from brackish wells, and is constrained by an administrative allotment of 600 000 m 3. Additional freshwater may also be available from the national water system at higher cost. Land available for irrigated agriculture is 670ha (1 h a = 2 . 5 acres). Farm labor was estimated at 8000 working days per year. For the purpose of this analysis it is assumed that land and labor quality are homogeneous. A dairy herd of 250 milking cows is also part of the on-farm production process. In the analysis it is assumed that the production level of that dairy is given and, therefore, in the objective function the cost of the feed component of that activity is minimized in order to maximize the overall farm gross margin. Feed components for the dairy can be either produced on farm or be purchased from the market. The area of several crops was constrained to capture administrative restrictions on production level (market and export quotas), management ability, and other constraints of the farm that were not included in the empirical specifications of the model. For example, peanuts were constrained to up to 15% of the land; winter and spring potatoes were constrained to up to 5 and 4%, respectively; and carrots for processing were constrained to up to 22% of the land. Mango and citrus orchards were constrained to 9 and 15 ha, respectively. The field-level analysis was performed for three sets of double cropping systems of field crops considered for that farm. These were wheat for silage followed by spring corn for silage; peanuts followed by wheat for silage; and
308
Ariel Dinar, Dan Yaron, Arieh Baruchin
vetch for hay followed by spring corn for silage. Sensitivity analyses were performed for each pair of crops in a particular cropping system. The sensitivity analysis was with respect to possible yield reduction in the double cropping system (a 10% reduction in the second crop), and changes in prices of labor and water (a 100% increase in labor and water cost). The increased price for labor and water should reflect cases with relatively high opportunity costs (see note 7) for these inputs. The resulting gross margin per ha is the return on capital (including irrigation equipment), land (including water rights), and management. The farm-level analysis included the above-mentioned sets of double cropping field crops incorporated into three alternative cropping systems differing in the share of high-income crops. These systems were (a) vegetables for domestic and export markets (from hereafter called fresh vegetables), field crops, vegetables for processing, citrus, mango and double cropping field crops; (b) field crops, vegetables for processing, citrus, mango and double cropping field crops; and (c) field crops, citrus, mango and double cropping field crops. These cropping systems were combined with two alternative farm-level irrigation setups associated with different costs for irrigation equipment which were estimated from the farm budgets (the area for each irrigation technology was determined by main water conveyance equipment and technology-specific equipment): (a) drip-irrigation equipment for field crops on area not to exceed 220ha, equipment for linear move sprinklers to irrigate field crops on area not to exceed 326 ha, and micro-sprinklers to irrigate groves on area not to exceed 25 ha; (b) drip-irrigation equipment for field crops on area not to exceed 190 ha, equipment for sprinkler irrigation to irrigate field crops on area not to exceed 360 ha, and micro-sprinklers to irrigate groves on area not to exceed 25 ha. A cost component for the main pipe system to convey water to the fields was also included for the entire farm area of 670 ha. A summary of the costs for these irrigation alternatives is presented in Table 1. Additional costs to be borne by the farm are maintenance and management costs. These include maintenance of irrigation equipment, transportation, training, management, accounting costs, and computer services. For scenarios not including fresh vegetables these costs are US$128 100 per year, and for scenarios including fresh vegetables these costs are US$146 600. The difference is that vegetables include an additional cost for a full-time marketing laborer. The different types of costs described above were subtracted separately (see note 5) from the farm gross margin determined by the optimal solution obtained for the farm-level problem in each of the scenarios. These costs are based on actual expenses incurred by that farm, and are expressed in June 1987 US dollars.
Alternative cropping systems in arid conditions
309
RESULTS
Field-level analysis Results for the field-level analysis are presented in Table 2. It appears that when considering gross margin in the base case, double cropping is preferred to single cropping systems for all three sets of double cropping systems analyzed. When a 10% reduction in yield for the second crop was included in the analysis, only the double cropping system comprised of peanuts and wheat for silage was preferable to any of the single crops, and then only by a small margin. An increase in labor price resulted in a situation where two of the three double cropping systems were preferable to the single crops (note that although peanut is a high income crop, its area is restricted by a production quota). With a water price of US$0.20/m 3, none of the three double cropping systems was preferable, and returns to land, capital, and management for wheat and spring corn, and for vetch and spring corn, were negative under both double and single cropping systems. This indicates that no farming would occur when water is that expensive. The inclusion of capital cost for irrigation systems at the field-level analysis is presented in Table 3 for the base case using several simplifying assumptions: (1) fixed cost for irrigation equipment is divided by the total area equipped for irrigation producing an average fixed cost per ha; (2) in the case of double cropping, the selected irrigation system is used for both crops, and therefore must satisfy the technological requirements of both; and (3) in the single crop case, the selected technology is used only for that crop. Returns to land and management are higher for double cropping than for single crop systems. For example, in the case of wheat and spring corn for silage, the return to land and management (after payments for irrigation equipment) is US$150/ha when the more profitable single crop (corn) is considered, and US$226/ha when a double cropping system of wheat for silage followed by spring corn is considered. Moreover, the ratio of returns to land and management for the double cropping to returns to land and management for the single crop is higher than the ratio of gross margins for the same cropping systems. Note that returns on single or double cropping systems including peanuts are one-fold higher than for the other systems; however the increase in the return ratio for systems including peanuts (when capital cost of the irrigation systems are included) is the lowest among all systems, due to the high profitability of peanuts.
Ariel Dinar, Dan Yaron, Ar&h Baruchin
3 I0
z !
e~
[a.
rg) e¢1
¢~-o¢)
k;
¢',,I ,d
-d
e.,
I
~o
Q ,n
311
A l t e r n a t i v e cropping s y s t e m s in a r i d conditions
¢d
,.d .¢z
.= 0 "0
¢'4
,..d
eq
o.
E ¢'q
....t
""
[t~
o~3
.~_ .= oO
"0
.= 0
e.
"0
"0
"2 q~
-1 i.
312
Ariel Dinar, Dan Yaron, Arieh Baruchin
Farm-level analysis Farm-level analysis was performed for several alternative production scenarios that include combinations of available cropping patterns for the analyzed farm. For brevity, only selected results are presented. Two levels of annual constraints of freshwater were considered: 1"8 x 1 0 6 and 2-0 × 10 6 m 3. It was found that only when the cropping pattern includes vegetables does the higher constraint become effective. Therefore, the results for the annual constraint of 2.0 × 106 m 3 are not presented except for the annual gross margin that is highest in this case. In addition, total farmed land was not an effective constraint in any of the analyzed scenarios. In an analysis of the same farm (Dinar & Baruchin, 1988) it was found that when land is not an effective constraint (as in this case), and water is in relative shortage, the value of the objective function changes only slightly for a system where double cropping of field crops is considered, compared to cases where it is not considered. Therefore, cropping scenarios that do not include double field cropping activities are not presented here. Results for cases where the freshwater allotment is 1.8 x 106m 3 are presented in Tables 4, 5 and 6. Values of cropping patterns in the optimal solutions for the various scenarios are presented in Table 4. Wheat for grains, barley for grains, peanuts (single crop), citrus, mango, and double cropping of peanuts and wheat for silage are included in all three solutions. These crops capture 284ha (60-75%) of the farmed area in the three analyzed scenarios. In scenario 1, several vegetable crops are also included; in scenario 2 fresh vegetables are not included, but vegetables for processing and double cropping of corn and wheat for silage are included in addition to the base core of crops mentioned above. Scenario 3 is similar to scenario 2 except that all vegetables for processing are eliminated. The double cropping system of wheat for silage followed by corn for silage is not included in any of the scenario solutions. Opportunity costs for several inputs and for double cropping activities are presented in Table 5. For example, under the conditions presented in scenario 1, the gross margin per ha associated with corn for silage (in double cropping with wheat for silage or with vetch for hay) must increase significantly in order for that crop to be included in the optimal solution. Annual quantities of freshwater and brackish water limit production only in the case of scenario 1. Monthly (June) limitations of freshwater and monthly (February) limitations of brackish water were effective only in scenarios 2 and 3. It is interesting that the shadow price for brackish water was much higher than that for freshwater (for both annual and monthly allotments). The reason is that in the planning process freshwater was separated from brackish water. Freshwater was considered only for irrigation of fresh
A l t e r n a t i v e cropping s y s t e m s in a r i d conditions
TABLE Optimal
Cropping
313
4
Patterns for Several Alternative
Production
Scenarios at Farm Level
Cropp&g scenario 1 Field crops Doubh, crops Vegetahles./br processing Fresh vegetahh, s Orchards (ha)
2 FieM crops Douhh, ~l/'()pill Vegetables/or processing Orchards" (ha)
3 FieM crops Doubh, crops Orchards (ha)
W h e a t for grains Barlcy for g r a i n s Pcanuts
100" 60" 60"
100" 60" 60"
10ft' 60" 60"
Total area O/',~'ittgle fiehl crops
220
220
220
ShTgle.fiehl crops
Double [whl crops P e a n u t - w h e a l silage W h e a t s i l a g e - c o r n silage Corn for silage-vetch
40 0 0
40 0 96.6
40 0 96.6
Total arett Of thmhle.field crops
4t)
136"6
136.6
Carrot Onion Mini o n i o n s Beet r o o t
0 0 64.6 30"
150" 100" 0 30"
0 0 0 0
Total area o f vegetables.for processing
94.6
280
--
Spring potatoes Carrot for export Radish Melons Water melons Eggplants Greenhouse tomatoes Garlic
29" 15" 12.5" 10" 10" 3. 0"5 ~ 10 .
------
------
Total area q/' fi'e.~h vegetahh, s
94.5
--
--
Citrus Mango
15" 9"
15" 9"
15" 9"
Total area q f orchards
24
24
24
Vegetahh's fin" proces.~'htg
Fresh t,egetahh,s
.
.
. --
.
.
-.
Orchard~"
"Effective area constraint.
Ariel Dinar, Dan Yaron, Arieh Baruchin
314
TABLE 5 R e d u c e d C o s t s a a n d S h a d o w Prices for Selected Activities a n d C o n s t r a i n t s at F a r m Level
Cropping scenario 1 Field crops Vegetables . f o r processing Fresh vegetables Double crops Orchards
2 Field crops Vegetables.for processing Double crops Orchards
3
Field crops Double crops Orchards
Reduced cost .['or double cropping ( US$/ha) Wheat for silage (with corn for silage) Corn for silage (with wheat for silage) Vetch for hay (with corn for
silage) Corn for silage (with vetch for hay)
37.5 425.0
0b
71.8
68.7
0b
0b
--
--
400.0
--
--
0"20 0.56
0 0
0 0
0
0"30
0"30
0 750 l 620 3 660
0.56 1 570 4000 4 700
0'56 1 570 4000 4 700
Shadow prices of selected constraints Annual freshwater (US$/m 3) Annual brackish water (US$/m 3) Max. freshwater in peak m o n t h (US$/m 3) Max. brackish water in peak m o n t h (US$/m 3) Peanuts area constraint (US$/ha) Citrus area (US$/ha) M a n g o area (US$/ha)
aLevel of gross margin coefficient that a given activity not included in the optimal solution needs to possess in order to be included in that optimal solution. b Reduced cost in the optimal solution is very close to zero.
vegetables and vegetables for processing (that are relatively sensitive to salinity). Brackish water was considered for irrigation of the field crops (that are more tolerant to salinity). Because marketing constraints affected the acreage of the high-value flesh vegetables and some of the vegetables for processing, the entire freshwater allotment was allocated to the relatively low-value vegetables for processing and field crops that were not constrained in acreage. In addition, the double crop of peanuts and wheat for silage which is a relatively high-value mix using brackish water, partially explains the higher shadow price for brackish water. Results in Table 6 provide the overall picture of the various cropping systems, including fresh vegetables and vegetables for processing; field crops (including double cropping of field crops); and orchards, which differ in their ability to bear the cost of intensive irrigation systems.
Alternative cropping systems in arid conditions
315
TABLE 6 Gross Margin and Returns to Land (and Water Rights) for Several Cropping Scenarios at Farm Level Cropping scenario
Total irrigated area (ha) Gross margin (US$ × 103) Management costs b (US$ x 10a) Irrigation fixed cost c (US$ x 103) Return to land (US$ x 103) Area cropped (inc. double cropping) Return to land unit (US$/ha) Area with double cropping (ha) Share of area with double cropping (%)
1 FieM crops Vegetables .for processing Fresh vegetables
2 FieM crops Vegetables .for processing Double crops
Double crops Orchards
Orchards
468"5 705.9" 146"6 225'0 334'3
435.6 456"2 128~1 225-0 103"1
380-6 414'4 128-1 225"0 61-3
468"5 713 40
435'6 237 96-6
380"6 161 96'6
8'5
22'1
25"4
3
Field crops Double crops Orchards
"For annual freshwater quota of 2.0 × 106 m 3 the gross margin was US$735.40. bSee text for details. CValues used are for irrigation combination 1 since the cost difference between combination 1 and 2 is negligible (see Table 1).
The management costs and the irrigation fixed costs were subtracted from the farm gross margin value and obtain returns to land (including rent on water rights). Farm returns to land are positive in all scenarios, with a highest value of US$713/ha for scenario 1 and a lowest value of US$161/ha in scenario 3. The possible range of alternative cropping patterns is probably the key to the level of farm income. Moreover, the per ha returns for a pattern comprised of mainly field crops and a marginal area of orchards is very low. In a case where trade conditions become worse, and yields are decreased, such a cropping pattern would not provide enough margin for risk. It is obvious that the margin for risk is increased as the share of the intensive crops in the cropping pattern is increased. (It should be mentioned that the management level of the analyzed farm is considered to be high.) Another result observed is that as the variety of cropping patterns available for the farm is reduced (as in the case of scenarios 1, 2, and 3 that exhibit a reduction in number of crop mixes available to the farm, and elimination of high income crops), the share of double cropping of field crops systems in the optimal solution is increased. Figures in Table 6 suggest that double cropping systems can capture from 8.5 up to 25 % of the farmed area.
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Ariel Dinar, Dan Yaron, Arieh Baruchin
CONCLUSIONS Water and land are two inputs that affect agricultural productivity due to their relative scarcity. Intensified agricultural practices for water and land use, as well as other inputs, have been suggested by agronomists as one possible means to increase agricultural production. These practices are capital intensive (especially, high-pressure systems), and their implementation is not necessarily economically sound. In this paper a general framework for analysis was suggested and applied to a case study under arid conditions in the Israeli Negev region. Several general conclusions can be drawn from the results, although they apply to arid and semi-arid conditions and a given farm structure. It is clear that intensive irrigation systems enable the farm to widen the margin of production possibilities. In arid and semi-arid regions, however, farming systems, based on field crops and pressurized irrigation systems are only marginally profitable. The profit margin increases as the share of highincome vegetable crops becomes larger. On the other hand, farming systems based on high-income horticultural crops, may have only a limited domestic and export market. The problem is, therefore, to find for any particular set of conditions the proper combination of basic field crops and high-income horticultural crops with the potential of bearing the cost of modern capital intensive irrigation systems. This means that certain crop combinations and irrigation technologies provide better opportunities than traditional cropping and irrigation practices (see also Regev et aL, 1990). Another conclusion that emerges from the analysis is that an intensification of the system by including double cropping of field crops reduces the burden of the additional irrigation capital cost. This means that the additional cost associated with irrigation technologies is now weighted against a higher production value.
ACKNOWLEDGEMENTS The authors would like to express their appreciation for the help in data collection and discussions by members of two settlements in the Negev region. This study was supported in part by a grant from the US Agency for International Development, in juncture with the USDA, Office of International Cooperation and Development to The Hebrew University of Jerusalem as a part of a Tri-national Egypt-Israel-USA Project-,Patterns of Agricultural Technology Exchange and Cooperation in a Similar Ecosystem: The Case of Egypt and Israel.
Alternative cropping systems in arid conditions
317
NOTES 1. An example for this type of double cropping is a sequence of winter vegetables such as lettuce that lasts from November until February, followed by a summer Vegetable such as tomatoes grown on that field from April until July. 2. An example for this type of double cropping is a sequence of wheat for grains, grown from November until June under regular growing practices, and cotton which lasts from April until October under regular growing practices. In order to grow these two crops as a double cropping system, modifications in the growing practices must be made for one or both crops. 3. Optimal input level can be determined using simulation models such as Jones (1983) that take into consideration weather events (mainly rainfall) under given input-output prices. However, in semi-arid regions the irrigation rate is likely to be fixed at the 'best management' level recommended for that region. It also dictates the level of other inputs, for the same input-output vector. 4. Rent on water rights over and above pumping cost (for saline wells), or payment for fresh water to the regional supplier. 5, In parentheses are the dimensions of the vectors or matrices. 6. This is legitimate since the irrigation technology or combination of technologies are not considered here as field-level decision variables and are provided for the farm as given. 7. Opportunity cost is the maximum value assigned to this input in an alternative use.
REFERENCES Boggess, W. G. & Amerling, C. B, (1983). A Bioeconomic Simulation Analysis of Irrigation Investment. Southern J. Agric. Econ., 15, 85-91. Caswell, M. & Zilberman, D. (1985). The choices of irrigation technologies in California. Am. J. Agric. Econ., 67(2), 224-34. Caswell, M. & Zilberman, D. (I 986). The effects of well depth and land quality on the choice of irrigation technology. Am. J. Agric. Econ., 68, 798 811. Dinar, A. & Baruchin, A. (1988). Economic Evaluation q['Double Cropping Systems. Final Report, TATEC-Patterns of Agricultural Technology Exchange and Cooperation in Similar Ecosystem: The Case of Egypt and Israel. A Trinational Project Egypt-Israel-USA. The Hebrew University of Jerusalem, Rehovot, Israel, 60pp., May 1988. Hill, R. W. & Keller, J. (1980). Irrigation system selection for maximum crop profit. Trans. Am. Soc. Agric. Engng, 23(2), 366-72. Holzapfel, E. A., Marino, M. A. & Chavez-Morales, J. (1985). Procedure to select an optimum irrigation method. J. Irrig. Drainage Engng, 111(4), 313-24. Jones, J. W. (1983). Irrigation options to avoid critical stress: optimization of onfarm water allocation to crops. In Limitations to E~cient Water Use hi Crop Production. Soil Science Society of America, Madison, Wl, 1983, pp. 53-67. Kaimowitz, D. (1990). Making the Link: Agricultural Research & Technology Transfer in Developing Countries. Westview Press, Boulder, CO, 1990. Knapp, K. C. (1991). Optimal inter-temporal irrigation management under saline, limited drainage conditions. In The Econonfics and Management q[" Water and Drainage in Agriculture, ed. A. Dinar & D. Zilberman. Kluwer Academic Publishers, Boston, MS, pp. 599-616.
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Regev, A., Jaber, A., Spector, R. & Yaron, D. (1990). Economic evaluation of the transition from a traditional to a modernized irrigation project. Agric. Water Manage., 18(4), 347-63. Saffaf, Y. (1980). Selection of appropriate irrigation methods for semi-arid regions. In Irrigation and Agricultural Development, ed. S. S. JohL Pergamon Press, pp. 117-29. Sahn, D. E. (ed.) (1989). Seasonal Variabilio, in Third World Agriculture: The Consequences .['or Food Security. The John Hopkins University Press, Baltimore, MD. Seavoy, R. E. (1989). Famine in East Africa Food Production and Food Policies. Greenwood Press Inc., Westport, CT. Taylor, D. C. (1986). Reduced-pressure irrigation investment economics. Water Resources Res., 22(2), 121-8. Tsai, Y. J., Mishoe, J. W. & Jones, J. W. (1987). Optimizing multiple cropping systems: simulation studies. Agric. Sys., 25, 165-76. Van Tuijl, W. A. (1989). Irrigation development and issues in EMENA countries. In Technological and Institutional Innovation in Irrigation, ed. G. LeMoigne, S. Barghouti & H. Plusquellec. World Bank Technical Paper No. 9, The World Bank, Washington, DC, pp. 13-22. Yaron, D. & Dinar, A. (1982). Optimal allocation of irrigation water on a farm during peak season. Am. J. Agric. Econ., 64, 681-9.
Alternative Cropping Systems and Intensive Irrigation Under Arid Zone Conditions Ariel Dinar Department of Agricultural Economics, University of California and USDA-ERS, Davis, California 95616, USA
Dan Yaron The Hebrew University of Jerusalem, Rehovot, Israel
& Arieh Baruchin The Jewish Agency, Department of Development, The Negev Region, Beer-Sheva, Israel (Received 24 April 1991; accepted 19 August 1991)
A BSTRA CT Water and land are two inputs that qffect agricultural productivity due to their relative scarcity. Intensified agricultural practices utilizing water and land, as well as other inputs, have been suggested by agronomists and other agricultural researchers as one possible means to increase agricultural production. Intensified agricultural practices tend to be capital intensive, and should be evaluated carefully for their feasibility. A general framework for analysis was suggested and applied to a case study under arid conditions in the Israeli Negev region. Results suggest that certain combinations of crop mix and irrigation technologies provide better opportunities than traditional cropping and irrigation practices. Intens(fication of the production system b)' including double cropping of field crops and incorporation of high-income crops can reduce the burden of the additional irrigational capital cost. INTRODUCTION There is an increasing need for food in m a n y o f the less-developed countries o f the world at the same time that land and water resources are being 301 Agricultural Systems 0308-521X/92/$05.00 O 1992 ElsevierScience Publishers Ltd, England. Printed in Great Britain
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Ariel Dinar, Dan Yaron, Arieh Baruchin
exploited and degraded (Sahn, 1989; Seavoy, 1989). These two problems have been the main forces driving extensive biological and agricultural research to find technological solutions for better use of limited resources (Kaimowitz, 1990). Such solutions may involve intensifying the agricultural production processes by increasing levels of water or fertilizers, improving crop varieties, and introducing high-income crops, double and triple cropping systems, and pressurized water-saving irrigation technologies. Irrigation water practices developed for other regions may not be applicable in large areas of the Middle East and North Africa which suffer from water shortages (Saffaf, 1980). These regions are characterized by relatively shallow soils including some with high gypsum and calcium carbonate content that may cause uneven spatial distribution of irrigation water. Moreover, the sandy soils in these regions tend to have low water retention capacities which preclude the use of traditional gravitation irrigation technologies. The soil properties prevailing in these regions necessitate the use of modern irrigation technologies such as sprinkler and drip systems (Saffaf, 1980). Although these systems are technically and agronomically feasible, their economic feasibility is questionable since they are capital intensive (Table 1) and not all types of cropping systems can bear their costs.
The economic literature dealing with adoption of modern irrigation technologies has focused much attention on analysis of economic conditions such as prices of inputs and outputs affecting the adoption of modern irrigation technologies at crop and farm levels (Caswell & Zilberman, 1986). One obvious strategy for economic use of the modern irrigation technologies is to irrigate high-value crops such as out of season vegetables (Regev et al., 1990) and horticultural crops (Caswell & Zilberman, 1985). However, the markets, both domestic and international, for such products may be limited, and thus would limit the scope of this strategy. This leads to the question: To what extent are intensive land use rotations based on staple crops or some mix of staple crops and high value crops Cdouble cropping') able to support the capital intensive modern technologies? Tsai et aL (1987) used a simulation method to evaluate optimal combinations of multiple cropping systems for a humid region. They estimated the effects of differences in weather conditions on the selection of the system. Several studies have considered irrigation technology selection at the field level (Hill & Keller, 1980; Boggess & Amerling, 1983; Holzapfel et a/., 1985; Taylor, 1986). Many studies exist at farm level which consider optimal water allocation and irrigation technologies to crops and combination of crops (e.g. Yaron & Dinar, 1982; Jones, 1983; Knapp, 1991), but they either lack irrigation technology considerations or do not fully consider many real world constraints affecting farm level operations.
Alternative cropping systems in arid conditions
303
TABLE 1 Summary Cost for Two Irrigation Alternatives a h'rigation component
Main conveyance pipes Combination 1 Linear-moved Drip irrigation Micro-sprinklers Total irrigation fixed costs (including main pipes) Combination 2 Drag-line sprinklers e Drip irrigation Micro-sprinklers Total irrigation fixed costs (including main pipes)
Investment ( US$/ha)
L([e span (),ears)
Annualized cost b (US$/ha)
Equipped area c (ha)
Total annual cost (US$ × 103)
1 398
20
142
670
95.1
804 2 348 2 155
15 8 8
94 408 375
326 220 25
30.8 89-8 9-3
225-0 942 2 348 2 155
20 8 8
96 408 375
360 190 25
34.5 77-5 9.3
216.4
a From Study farm budget files. h Using 8% interest rate; not including operation and maintenance (see text). ' Notice that the area equipped with main conveyance pipes is 670 ha and the area equipped with irrigation technologies is 571 and 575 ha for irrigation combination I and 2, respectively. dUsing two types of systems: center pivot for l l 0 h a and linear move for 216 ha. e Equipment for 60 ha is needed to irrigate 360 ha, assuming irrigation cycle of 8-9 days and additional 25% for safety.
Furthermore, farm-level studies that include modern irrigation technology selection in arid zones, are very scarce (Van Tuijl, 1989). This paper analyses some major strategic alternatives with respect to types of cropping systems which are economically compatible with the cost of capital intensive irrigation systems, namely sprinkler and drip. A fieldand farm-level models are applied to a set of 'best management' practices used by decision-makers in a specific farm in an arid region of Israel. While the analysis is based primarily on the Israeli experience, the authors believe that its implications are general. The next section presents the analytical framework for the analysis. Then, a description of irrigation technologies and potential double cropping systems considered in the analysis is provided with specification of the farm type. Results of field- and farm-level economic analyses are then presented and discussed followed by additional perspectives and conclusions.
Ariel Dinar, Dan Yaron, Arieh Baruchin
304
ECONOMIC F R A M E W O R K TO ASSESS DOUBLE CROPPING VERSUS SINGLE CROPPING SYSTEMS The analysis is performed within two frameworks: (1) at the field level, in order to identify superior crop mix combinations and to establish the conditions (price, inputs level, and yield level) for improved profitability; and (2) at the farm level, where farm characteristics (technology, input constraints, and production quota) are incorporated in order to determine the possible contribution of intensified cropping systems to income under various conditions. Note that with reference to double cropping systems, a distinction should be made between (a) rotation of short-term crops grown in sequence within one growing season using conventional cultivation practices (see note 1), and (b) rotations of longer term crops whose cultivation technology must be modified in order to curtail the growing season and adapt them for rotation within one growing season (see note 2). The current analysis refers to both types with emphasis on the second type of double cropping system.
Field-level analysis Let Z~'jbe the variable cost (excluding water) per unit area of crop k which can be grown in a double cropping system with another crop. Here, i stands for the first crop a n d j is the second crop in that system. Ifk = i or j, and i =j then only a single crop is being grown on that field. W~ is water rate (see note 3), Li~ is labor input, pn is harvest cost per unit of yield, pL is labor price, pW is water price, Yik is yield, and pr is crop yield price. The field level gross margin (I-]kj) which is expressed, for crop k, as returns to land (and water rights (see note 4)), management and capital, is provided by I~ikj
: Yijk ×(PY-pH)-Zikj - Wikj× pW _Likj× pL
where k = i or j. [Iki is calculated for each cropping system. The analysis is applied first to a base case, where labor and water prices reflect existing market conditions and the yield of the second crop reflects average levels. At a second stage, sensitivity analyses are conducted separately for yield level, water, and labor prices. The range of prices addressed in the sensitivity analysis reflect on farm opportunity costs associated with labor and water; and the yield level reflects range of situations where yield of the second crop was lower than the average, due to weather, bad management, etc.
Alternative cropping systems in arid conditions
305
Assuming a profit-maximizing decision-maker, the gross margin for the double cropping system is calculated as
maxD,j=~l-I,kj
fork:i,j
k
which is a simple summation over the two crops grown as a system on that field. The gross margin for the cropping system with the single crop grown on that field is calculated as
Sit = max {l-[jj; l-Ill} In this case, the decision-maker maximizes his gross margin by selecting one crop of the two possible crops to be grown on that field. The selected crop is associated with the highest gross margin per unit of land. To maximize the field-level gross margin (F), the decision-maker selects the highest gross margin between the single cropping system and the double cropping system F = max {Dij; Sit} The analysis assumes that irrigation equipment (capital) decisions are made at a farm-level, rather than a field-level. For example, a given set of irrigation equipment may rotate among different fields within one season. Therefore, the use of gross margin as a criteria is justified here. Irrigation capital cost is then subtracted from the gross margin of either the single or the double system providing returns to land (and water rights) and management.
Farm-level analysis The general formulation of the farm-level model is max f = C'sXs + C'oX. - C'UXN
subject to
QsXs + QoXD < BQ H'sXs + H'oXo < bn r o x o <_B~ F~'sXs + E'oXo <_b~ NNXN + NsXs + NoXo <- BN
RsXs + RoXo > BR Xs, ND, Xo, Xn > O
Ariel Dinar,Dan Yaron,AriehBaruchin
306
where C~, C~ are vectors of net income coefficients for single crops, including perennial crops (1 x ks) (see note 5) and for double cropping systems (1 × ko); C'Nis a vector of market prices (1 × kN) for livestock feeds to be bought outside of the farm; BQ is a vector (1 x kQ) of annual and monthly water constraints of different sources and qualities; bn is the annual amount of available labor on the farm; B r is a vector (kr x 1) of farming constraints pertaining only to double cropping systems. These constraints include certain combinations of crops, and rotation of crops; be is the total available land; B N is a vector (kr x 1) of livestock dietary constraints; and B R is a vector (kR × 1) of other constraints such as marketing, area in perennial crops, etc. Hs, Ho, Es, and Eo are the corresponding vectors of input-output coefficients, and Qs, QD, To, NN, No, Ns, Rs, Ro are the corresponding matrices of input-output coefficients. For example, Qs and Qo are per unit area water coefficients recommended as 'best management' practices for a given crop (in single and double cropping systems, respectively). A discrete number of water--crop combinations can be determined here for each crop, such as 'crop x irrigated with Q~ m3/ha of water', or 'crop x irrigated with Qs2 m3/ha of water'. Each activity is associated with a set of fixed input-output coefficients and a gross margin value. Using this framework, the changes in input-output prices and/or constraint levels will result in a change in activities levels (area of a given combination of crop-irrigation technology), which is a reflection of the behavioral character of decision-makers in arid regions regarding levels of water constraints. The decision-maker can choose any technically feasible combination of the crop-water levels in his objective function. The optimal solution includes the following values: X* which is a vector of areas under a given irrigation technology devoted to perennial crops and other single cropping systems; it includes also X~ and X~ which are, respectively, vectors of area under a given irrigation technology devoted to double cropping systems and the amounts of feed purchased for the farm's livestock. The irrigation capital cost is calculated externally to the model and the annual fixed costs were subtracted from the gross margin provided in the optimal solution (see note 6). ¢
i
I
I
DATA A N D E M P I R I C A L SPECIFICATIONS The field- and farm-level frameworks were applied to a representative kibbutz farm (pl. kibbutzim, collective farms) in the south-western part of the Negev region of Israel. This region is characterized by sandy soils, hot
Alternative cropping systems in arid conditions
307
summers, mild winters with low precipitation, and a shortage of good water quality available for irrigation. The mix of activities and production coefficients for the farm were provided by the farm management and extension advisors (Dinar & Baruchin, 1988). They consist of vectors of annual and monthly water application rates per ha, annual and monthly labor requirements, and coefficients related to other input constraints. If a crop can be irrigated by either fresh water or saline, two different activities for that crop are defined with the input and gross margin coefficients formulated accordingly. Crop budgets for single and double cropping practices to be analyzed in this study were derived from two sources: the computerized budgets recorded by the extension service, Israel Ministry of Agriculture, July, 1985, and by the Jewish Agency, The Negev Region, October 1985. Adjustments were made by extension specialists for the region and farm conditions (specific budgets can be found in Dinar and Baruchin (1988)). All monetary values are in terms of June 1987 US dollars. The farm has an annual freshwater allotment of 1 8 0 0 0 0 0 m 3 (1000 m 3 = 0"816 acre foot) provided from the national water system with a constraint for peak month at 300 000 m 3. This water is provided to the farm at a fixed price of nearly US$0.10/m 3. Additional water for irrigation is available from brackish wells, and is constrained by an administrative allotment of 600 000 m 3. Additional freshwater may also be available from the national water system at higher cost. Land available for irrigated agriculture is 670ha (1 h a = 2 . 5 acres). Farm labor was estimated at 8000 working days per year. For the purpose of this analysis it is assumed that land and labor quality are homogeneous. A dairy herd of 250 milking cows is also part of the on-farm production process. In the analysis it is assumed that the production level of that dairy is given and, therefore, in the objective function the cost of the feed component of that activity is minimized in order to maximize the overall farm gross margin. Feed components for the dairy can be either produced on farm or be purchased from the market. The area of several crops was constrained to capture administrative restrictions on production level (market and export quotas), management ability, and other constraints of the farm that were not included in the empirical specifications of the model. For example, peanuts were constrained to up to 15% of the land; winter and spring potatoes were constrained to up to 5 and 4%, respectively; and carrots for processing were constrained to up to 22% of the land. Mango and citrus orchards were constrained to 9 and 15 ha, respectively. The field-level analysis was performed for three sets of double cropping systems of field crops considered for that farm. These were wheat for silage followed by spring corn for silage; peanuts followed by wheat for silage; and
308
Ariel Dinar, Dan Yaron, Arieh Baruchin
vetch for hay followed by spring corn for silage. Sensitivity analyses were performed for each pair of crops in a particular cropping system. The sensitivity analysis was with respect to possible yield reduction in the double cropping system (a 10% reduction in the second crop), and changes in prices of labor and water (a 100% increase in labor and water cost). The increased price for labor and water should reflect cases with relatively high opportunity costs (see note 7) for these inputs. The resulting gross margin per ha is the return on capital (including irrigation equipment), land (including water rights), and management. The farm-level analysis included the above-mentioned sets of double cropping field crops incorporated into three alternative cropping systems differing in the share of high-income crops. These systems were (a) vegetables for domestic and export markets (from hereafter called fresh vegetables), field crops, vegetables for processing, citrus, mango and double cropping field crops; (b) field crops, vegetables for processing, citrus, mango and double cropping field crops; and (c) field crops, citrus, mango and double cropping field crops. These cropping systems were combined with two alternative farm-level irrigation setups associated with different costs for irrigation equipment which were estimated from the farm budgets (the area for each irrigation technology was determined by main water conveyance equipment and technology-specific equipment): (a) drip-irrigation equipment for field crops on area not to exceed 220ha, equipment for linear move sprinklers to irrigate field crops on area not to exceed 326 ha, and micro-sprinklers to irrigate groves on area not to exceed 25 ha; (b) drip-irrigation equipment for field crops on area not to exceed 190 ha, equipment for sprinkler irrigation to irrigate field crops on area not to exceed 360 ha, and micro-sprinklers to irrigate groves on area not to exceed 25 ha. A cost component for the main pipe system to convey water to the fields was also included for the entire farm area of 670 ha. A summary of the costs for these irrigation alternatives is presented in Table 1. Additional costs to be borne by the farm are maintenance and management costs. These include maintenance of irrigation equipment, transportation, training, management, accounting costs, and computer services. For scenarios not including fresh vegetables these costs are US$128 100 per year, and for scenarios including fresh vegetables these costs are US$146 600. The difference is that vegetables include an additional cost for a full-time marketing laborer. The different types of costs described above were subtracted separately (see note 5) from the farm gross margin determined by the optimal solution obtained for the farm-level problem in each of the scenarios. These costs are based on actual expenses incurred by that farm, and are expressed in June 1987 US dollars.
Alternative cropping systems in arid conditions
309
RESULTS
Field-level analysis Results for the field-level analysis are presented in Table 2. It appears that when considering gross margin in the base case, double cropping is preferred to single cropping systems for all three sets of double cropping systems analyzed. When a 10% reduction in yield for the second crop was included in the analysis, only the double cropping system comprised of peanuts and wheat for silage was preferable to any of the single crops, and then only by a small margin. An increase in labor price resulted in a situation where two of the three double cropping systems were preferable to the single crops (note that although peanut is a high income crop, its area is restricted by a production quota). With a water price of US$0.20/m 3, none of the three double cropping systems was preferable, and returns to land, capital, and management for wheat and spring corn, and for vetch and spring corn, were negative under both double and single cropping systems. This indicates that no farming would occur when water is that expensive. The inclusion of capital cost for irrigation systems at the field-level analysis is presented in Table 3 for the base case using several simplifying assumptions: (1) fixed cost for irrigation equipment is divided by the total area equipped for irrigation producing an average fixed cost per ha; (2) in the case of double cropping, the selected irrigation system is used for both crops, and therefore must satisfy the technological requirements of both; and (3) in the single crop case, the selected technology is used only for that crop. Returns to land and management are higher for double cropping than for single crop systems. For example, in the case of wheat and spring corn for silage, the return to land and management (after payments for irrigation equipment) is US$150/ha when the more profitable single crop (corn) is considered, and US$226/ha when a double cropping system of wheat for silage followed by spring corn is considered. Moreover, the ratio of returns to land and management for the double cropping to returns to land and management for the single crop is higher than the ratio of gross margins for the same cropping systems. Note that returns on single or double cropping systems including peanuts are one-fold higher than for the other systems; however the increase in the return ratio for systems including peanuts (when capital cost of the irrigation systems are included) is the lowest among all systems, due to the high profitability of peanuts.
Ariel Dinar, Dan Yaron, Ar&h Baruchin
3 I0
z !
e~
[a.
rg) e¢1
¢~-o¢)
k;
¢',,I ,d
-d
e.,
I
~o
Q ,n
311
A l t e r n a t i v e cropping s y s t e m s in a r i d conditions
¢d
,.d .¢z
.= 0 "0
¢'4
,..d
eq
o.
E ¢'q
....t
""
[t~
o~3
.~_ .= oO
"0
.= 0
e.
"0
"0
"2 q~
-1 i.
312
Ariel Dinar, Dan Yaron, Arieh Baruchin
Farm-level analysis Farm-level analysis was performed for several alternative production scenarios that include combinations of available cropping patterns for the analyzed farm. For brevity, only selected results are presented. Two levels of annual constraints of freshwater were considered: 1"8 x 1 0 6 and 2-0 × 10 6 m 3. It was found that only when the cropping pattern includes vegetables does the higher constraint become effective. Therefore, the results for the annual constraint of 2.0 × 106 m 3 are not presented except for the annual gross margin that is highest in this case. In addition, total farmed land was not an effective constraint in any of the analyzed scenarios. In an analysis of the same farm (Dinar & Baruchin, 1988) it was found that when land is not an effective constraint (as in this case), and water is in relative shortage, the value of the objective function changes only slightly for a system where double cropping of field crops is considered, compared to cases where it is not considered. Therefore, cropping scenarios that do not include double field cropping activities are not presented here. Results for cases where the freshwater allotment is 1.8 x 106m 3 are presented in Tables 4, 5 and 6. Values of cropping patterns in the optimal solutions for the various scenarios are presented in Table 4. Wheat for grains, barley for grains, peanuts (single crop), citrus, mango, and double cropping of peanuts and wheat for silage are included in all three solutions. These crops capture 284ha (60-75%) of the farmed area in the three analyzed scenarios. In scenario 1, several vegetable crops are also included; in scenario 2 fresh vegetables are not included, but vegetables for processing and double cropping of corn and wheat for silage are included in addition to the base core of crops mentioned above. Scenario 3 is similar to scenario 2 except that all vegetables for processing are eliminated. The double cropping system of wheat for silage followed by corn for silage is not included in any of the scenario solutions. Opportunity costs for several inputs and for double cropping activities are presented in Table 5. For example, under the conditions presented in scenario 1, the gross margin per ha associated with corn for silage (in double cropping with wheat for silage or with vetch for hay) must increase significantly in order for that crop to be included in the optimal solution. Annual quantities of freshwater and brackish water limit production only in the case of scenario 1. Monthly (June) limitations of freshwater and monthly (February) limitations of brackish water were effective only in scenarios 2 and 3. It is interesting that the shadow price for brackish water was much higher than that for freshwater (for both annual and monthly allotments). The reason is that in the planning process freshwater was separated from brackish water. Freshwater was considered only for irrigation of fresh
A l t e r n a t i v e cropping s y s t e m s in a r i d conditions
TABLE Optimal
Cropping
313
4
Patterns for Several Alternative
Production
Scenarios at Farm Level
Cropp&g scenario 1 Field crops Doubh, crops Vegetahles./br processing Fresh vegetahh, s Orchards (ha)
2 FieM crops Douhh, ~l/'()pill Vegetables/or processing Orchards" (ha)
3 FieM crops Doubh, crops Orchards (ha)
W h e a t for grains Barlcy for g r a i n s Pcanuts
100" 60" 60"
100" 60" 60"
10ft' 60" 60"
Total area O/',~'ittgle fiehl crops
220
220
220
ShTgle.fiehl crops
Double [whl crops P e a n u t - w h e a l silage W h e a t s i l a g e - c o r n silage Corn for silage-vetch
40 0 0
40 0 96.6
40 0 96.6
Total arett Of thmhle.field crops
4t)
136"6
136.6
Carrot Onion Mini o n i o n s Beet r o o t
0 0 64.6 30"
150" 100" 0 30"
0 0 0 0
Total area o f vegetables.for processing
94.6
280
--
Spring potatoes Carrot for export Radish Melons Water melons Eggplants Greenhouse tomatoes Garlic
29" 15" 12.5" 10" 10" 3. 0"5 ~ 10 .
------
------
Total area q/' fi'e.~h vegetahh, s
94.5
--
--
Citrus Mango
15" 9"
15" 9"
15" 9"
Total area q f orchards
24
24
24
Vegetahh's fin" proces.~'htg
Fresh t,egetahh,s
.
.
. --
.
.
-.
Orchard~"
"Effective area constraint.
Ariel Dinar, Dan Yaron, Arieh Baruchin
314
TABLE 5 R e d u c e d C o s t s a a n d S h a d o w Prices for Selected Activities a n d C o n s t r a i n t s at F a r m Level
Cropping scenario 1 Field crops Vegetables . f o r processing Fresh vegetables Double crops Orchards
2 Field crops Vegetables.for processing Double crops Orchards
3
Field crops Double crops Orchards
Reduced cost .['or double cropping ( US$/ha) Wheat for silage (with corn for silage) Corn for silage (with wheat for silage) Vetch for hay (with corn for
silage) Corn for silage (with vetch for hay)
37.5 425.0
0b
71.8
68.7
0b
0b
--
--
400.0
--
--
0"20 0.56
0 0
0 0
0
0"30
0"30
0 750 l 620 3 660
0.56 1 570 4000 4 700
0'56 1 570 4000 4 700
Shadow prices of selected constraints Annual freshwater (US$/m 3) Annual brackish water (US$/m 3) Max. freshwater in peak m o n t h (US$/m 3) Max. brackish water in peak m o n t h (US$/m 3) Peanuts area constraint (US$/ha) Citrus area (US$/ha) M a n g o area (US$/ha)
aLevel of gross margin coefficient that a given activity not included in the optimal solution needs to possess in order to be included in that optimal solution. b Reduced cost in the optimal solution is very close to zero.
vegetables and vegetables for processing (that are relatively sensitive to salinity). Brackish water was considered for irrigation of the field crops (that are more tolerant to salinity). Because marketing constraints affected the acreage of the high-value flesh vegetables and some of the vegetables for processing, the entire freshwater allotment was allocated to the relatively low-value vegetables for processing and field crops that were not constrained in acreage. In addition, the double crop of peanuts and wheat for silage which is a relatively high-value mix using brackish water, partially explains the higher shadow price for brackish water. Results in Table 6 provide the overall picture of the various cropping systems, including fresh vegetables and vegetables for processing; field crops (including double cropping of field crops); and orchards, which differ in their ability to bear the cost of intensive irrigation systems.
Alternative cropping systems in arid conditions
315
TABLE 6 Gross Margin and Returns to Land (and Water Rights) for Several Cropping Scenarios at Farm Level Cropping scenario
Total irrigated area (ha) Gross margin (US$ × 103) Management costs b (US$ x 10a) Irrigation fixed cost c (US$ x 103) Return to land (US$ x 103) Area cropped (inc. double cropping) Return to land unit (US$/ha) Area with double cropping (ha) Share of area with double cropping (%)
1 FieM crops Vegetables .for processing Fresh vegetables
2 FieM crops Vegetables .for processing Double crops
Double crops Orchards
Orchards
468"5 705.9" 146"6 225'0 334'3
435.6 456"2 128~1 225-0 103"1
380-6 414'4 128-1 225"0 61-3
468"5 713 40
435'6 237 96-6
380"6 161 96'6
8'5
22'1
25"4
3
Field crops Double crops Orchards
"For annual freshwater quota of 2.0 × 106 m 3 the gross margin was US$735.40. bSee text for details. CValues used are for irrigation combination 1 since the cost difference between combination 1 and 2 is negligible (see Table 1).
The management costs and the irrigation fixed costs were subtracted from the farm gross margin value and obtain returns to land (including rent on water rights). Farm returns to land are positive in all scenarios, with a highest value of US$713/ha for scenario 1 and a lowest value of US$161/ha in scenario 3. The possible range of alternative cropping patterns is probably the key to the level of farm income. Moreover, the per ha returns for a pattern comprised of mainly field crops and a marginal area of orchards is very low. In a case where trade conditions become worse, and yields are decreased, such a cropping pattern would not provide enough margin for risk. It is obvious that the margin for risk is increased as the share of the intensive crops in the cropping pattern is increased. (It should be mentioned that the management level of the analyzed farm is considered to be high.) Another result observed is that as the variety of cropping patterns available for the farm is reduced (as in the case of scenarios 1, 2, and 3 that exhibit a reduction in number of crop mixes available to the farm, and elimination of high income crops), the share of double cropping of field crops systems in the optimal solution is increased. Figures in Table 6 suggest that double cropping systems can capture from 8.5 up to 25 % of the farmed area.
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Ariel Dinar, Dan Yaron, Arieh Baruchin
CONCLUSIONS Water and land are two inputs that affect agricultural productivity due to their relative scarcity. Intensified agricultural practices for water and land use, as well as other inputs, have been suggested by agronomists as one possible means to increase agricultural production. These practices are capital intensive (especially, high-pressure systems), and their implementation is not necessarily economically sound. In this paper a general framework for analysis was suggested and applied to a case study under arid conditions in the Israeli Negev region. Several general conclusions can be drawn from the results, although they apply to arid and semi-arid conditions and a given farm structure. It is clear that intensive irrigation systems enable the farm to widen the margin of production possibilities. In arid and semi-arid regions, however, farming systems, based on field crops and pressurized irrigation systems are only marginally profitable. The profit margin increases as the share of highincome vegetable crops becomes larger. On the other hand, farming systems based on high-income horticultural crops, may have only a limited domestic and export market. The problem is, therefore, to find for any particular set of conditions the proper combination of basic field crops and high-income horticultural crops with the potential of bearing the cost of modern capital intensive irrigation systems. This means that certain crop combinations and irrigation technologies provide better opportunities than traditional cropping and irrigation practices (see also Regev et aL, 1990). Another conclusion that emerges from the analysis is that an intensification of the system by including double cropping of field crops reduces the burden of the additional irrigation capital cost. This means that the additional cost associated with irrigation technologies is now weighted against a higher production value.
ACKNOWLEDGEMENTS The authors would like to express their appreciation for the help in data collection and discussions by members of two settlements in the Negev region. This study was supported in part by a grant from the US Agency for International Development, in juncture with the USDA, Office of International Cooperation and Development to The Hebrew University of Jerusalem as a part of a Tri-national Egypt-Israel-USA Project-,Patterns of Agricultural Technology Exchange and Cooperation in a Similar Ecosystem: The Case of Egypt and Israel.
Alternative cropping systems in arid conditions
317
NOTES 1. An example for this type of double cropping is a sequence of winter vegetables such as lettuce that lasts from November until February, followed by a summer Vegetable such as tomatoes grown on that field from April until July. 2. An example for this type of double cropping is a sequence of wheat for grains, grown from November until June under regular growing practices, and cotton which lasts from April until October under regular growing practices. In order to grow these two crops as a double cropping system, modifications in the growing practices must be made for one or both crops. 3. Optimal input level can be determined using simulation models such as Jones (1983) that take into consideration weather events (mainly rainfall) under given input-output prices. However, in semi-arid regions the irrigation rate is likely to be fixed at the 'best management' level recommended for that region. It also dictates the level of other inputs, for the same input-output vector. 4. Rent on water rights over and above pumping cost (for saline wells), or payment for fresh water to the regional supplier. 5, In parentheses are the dimensions of the vectors or matrices. 6. This is legitimate since the irrigation technology or combination of technologies are not considered here as field-level decision variables and are provided for the farm as given. 7. Opportunity cost is the maximum value assigned to this input in an alternative use.
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