6.1 PLANNING AND OPERATING OBJECTIVES
6.2 SYSTEM PROPERTIES AND PERFORMANCE CRITERIA
6.3 REFERENCES
'There is always a reason why farming is carried out in one way rather than another.'Hans Ruthenberg (1976)
Subsequent chapters are concerned with the evaluation of farm-system performance and with the planning of new or improved systems. Backward-looking or ex post evaluation requires standards against which past performance can be measured. Forward-looking or ex ante farm analysis, i.e., planning, requires specification of system objectives as a basis for selecting the most appropriate subsystems (enterprises, activities, processes and technologies).
For farms of Types 1, 2, 3 and 4 (i.e., for all except large commercial farms and estates), standards and objectives arise in the system's household component and are largely determined by family values and goals. In most cases these can be accepted as given. The main task is to identify what the most desirable attributes or properties of such a farm system are likely to be, from the farm family's viewpoint, and to develop criteria for measuring the degree to which a given or proposed system possesses these properties, or lacks them (Harwood 1979, Parts 1 and 2). It is also necessary to have criteria by which the lower Order Level subsystems - specifically the separate production activities of Order Levels 3, 4 and 6 (resource generation, crops and livestock respectively) - can be measured in terms of their contributions to the achievement of whole-farm objectives, and thus household goals.
There are basically two major farm-operating objectives, profit maximization on market-oriented farms and household sustenance on subsistence-oriented farms (Collinson 1983, Ch. 2; Makeham and Malcolm 1986, Ch. 3). By profit maximization is meant maximization of net gain measured as total benefit less total cost. As discussed in Section 6.2.2, profit is usually but not necessarily measured in money terms.
Profit maximization measured in money terms can generally be taken as the planning objective on farms of Type 5 (large commercial family farms) and Type 6 (estates) but this is increasingly constrained by external factors such as labour laws, health and safety regulations, and national policies to produce crops which will generate foreign exchange or serve as a basis for local industrialization. Internal constraints can also exist on such farms and take the form of management jealousy in protecting the 'mark' of their product even when production of lower quality produce might yield more profit, and spending more than the necessary amount of money on estate upkeep to maintain estate appearance and status. Profit maximization measured in money terms can also be the primary objective of some subtypes of Type 3 (small independent specialized) and Type 4 (small dependent specialized) farms.
Note that, strictly speaking, when uncertainty is present (as is usually the case), profit maximization is not a feasible objective. Under uncertainty, rather than a variety of sure profit options, the farmer faces a set of profit probability distributions corresponding one-to-one to the available decision options. For each of these risky choices with its corresponding probability distribution of profit, it can be argued that the farmer will have some equivalent sure profit or certainty equivalent such that he or she would be indifferent between (a) taking the risky option with its uncertain profit or (b) receiving the sure profit amount. The operating objective is thus to discover and implement that option which has the highest certainty equivalent. Thus, under uncertainty, profit maximization translates to certainty equivalent maximization. These matters are elaborated in Chapter 11.
Household sustenance through the production of food and fibre for household consumption provides the primary objective of all other (predominantly Type 1 and 2) farms but, as noted previously, it is increasingly modified by the need also to generate some level of cash income.
Only some Type 6 farms (estates) and some Type 1 (subsistence) farms are found, respectively, at the extremes of aiming only for profit maximization or full subsistence; most farms of these and other types are located somewhere between these extremes along the profit-sustenance continuum as shown schematically in Figure 6.1.
FIGURE 6.1 - Stylized Representation of Relative Importance of Financial Profit and Subsistence by Farm Type
Beyond the priority objectives of ensuring sufficient food and cash for the farm household, Type 1 (subsistence) and Type 2 (semi-subsistence) farmers generally have a number of secondary objectives. These are likely to include such things as having security in their livelihood, having the opportunity to observe socio-cultural customs and obligations, and having a satisfactory amount of leisure time (Clayton 1983, Ch. 4).
6.2.1 Productivity
6.2.2 Profitability
6.2.3 Stability
6.2.4 Diversity
6.2.5 Flexibility
6.2.6 Time-dispersion
6.2.7 Sustainability
6.2.8 Complementarity and environmental compatibility
6.2.9 Summary
Given the two extremes in planning objectives and the relative weight which will be accorded to each for the various farm types (Figure 6.1), there are eight main properties a system might possess, thus requiring a set of eight criteria by which these system properties may be assessed. Each of these properties and its associated assessment criterion apply both to whole-farm Order Level 10 systems and to constituent activity/enterprise subsystems of Order Levels 3, 4 and 6. They are relevant to evaluation and planning both at farm-household level and at a broader social level. The eight properties of farm systems and activities which need to be assessed are:
(1) Productivity
(2) Profitability
(3) Stability
(4) Diversity
(5) Flexibility
(6) Time-dispersion
(7) Sustainability
(8) Complementarity and environmental compatibility.
At farm level
These system properties can be quantified (at least conceptually; see below). They are all 'desirable' or at least neutral in the sense that an individual farm which ranks highly with respect to productivity, profitability, stability etc. represents a superior system to a farm on which productivity, profitability etc. are low. When applied to a specific farm only a few of these properties might be thought relevant by the farm family or other decision maker. One farm manager might have a purely profit objective and would wish his or her performance to be evaluated in terms of profit. A second manager on the same type of farm might seek some balance of profitability-stability-sustainability so that criteria relating to these three properties would then need to be applied.1 In both cases, however, the analyst/adviser would be wise to review the farm system relative to all eight criteria and to proffer relevant advice.
1 It would be an error to evaluate both farms according to a criterion which is relevant to only the first farm. However, at a more general level, this is what often happens when Asian farms are evaluated by Western-oriented economists as being 'inefficient', 'backward' and of low productivity etc. on the grounds that they perform poorly according to the conventional Western criterion of money profitability.
In following sections the above eight properties and their associated performance criteria are examined in relation to their use at farm level in Field A (i.e., on-farm problem solving and advice) - which is not to say that they are not relevant to farm management analysis in Fields B, C and D; indeed, particularly in Fields C (industry and sector-level analysis) and D (policy-making), they will often be highly relevant.
At social level
Apart from farmers, society has a vital long-term interest in how rural resources are used and how farm systems perform. When farm management operates in Fields C and D (i.e., playing a contributing role in planning new settlements, irrigation projects etc., and in government policy guidance), it must also be cognizant of the several properties of farm systems. Some of these, particularly productivity, stability and sustainability, might well be more important from a social than from a private-household viewpoint. To plan new farms which will be profitable is one thing; to plan profitable farms which also make optimal sustainable use of what are finally social resources is yet another. Even more difficult and increasingly important is to develop new or restructured farm systems which have all these desirable properties and, in addition, are compatible with the social environment and not destructive of the physical environment. Also, as evidenced by increasing interest in gender analysis, equity within farm-household systems may also be important from a societal view.
Productivity is primarily a measure of the relative suitability of a system or activity in a particular agro-ecological environment. On commercial farms it is an indicator of relative efficiency of resource use and management performance. It is an underlying condition for profitability but should not necessarily be taken as a desirable attribute or objective in itself. On non-commercial farms, productivity is a necessary condition for achieving family sustainability - but only to a limit. Production beyond what a family can consume or store or barter becomes irrational and may even be undesirable. At some places in the Himalayan hills (such as eastern Bhutan) up to 30 per cent of the maize crop is surplus to food requirements and, in the absence of programs to develop alternative uses, is converted to alcohol with the most unfortunate social consequences. Yet in such areas it is not uncommon to find programs to 'improve' maize production as a road to farm 'development'. A more rational approach would be based on crop development within the context of the farm and village socioeconomic system. This might well aim at reduction in some crop production and reformulation of the whole farming system.
Productivity is conventionally measured in terms of such units, e.g., as tons, kilograms or litres of output respectively per acre, hectare or animal unit employed over some relevant time unit (typically a year). Or, if desired, it may be measured in financial terms over some relevant timespan as the ratio of total revenue to total cost, i.e., the value of output per unit of cost. Productivity is an appropriate measure of system and activity performance when applied to single-output enterprises or mono-product systems. However, as one moves from commercial to increasingly sustenance-oriented farm types (Figure 6.1), there is a tendency for by-products to become more numerous and important. This introduces difficulties in the measurement of output and productivity. In a commercial situation, productivity can usually be measured as a single variable. However, in a quasi-subsistence situation, it might require the construction of a table of output items such as exemplified by Table 6.1. This shows the main and secondary products of a range of tree and vine crops commonly grown on forest-garden farms in Sri Lanka and Java and the relative importance of the products of each crop as assessed by the household head (which assessment, of course, would vary among individual households).
Product mixes from some single crops can be considerably more complex than Table 6.1 suggests, e.g., as with rubber. On an estate there will be no measurement difficulties: output is simply the number of kilograms of made rubber per hectare. In contrast, on a mixed smallholding, 'output' might consist of latex for sale, seed from the annual seedfall, shade for associated crops such as cacao and yams, live supports for such climbers as pepper, and prunings or branchfall for household fuel. Some of these products can be measured (latex, seed, fuel), some cannot (the shade effect and the contribution of rubber trees to the micro-environment for use by associated crops). If the separate outputs and inputs can be measured, the crop can be evaluated as a set of (related) activities; if they cannot, it will need to be evaluated as a composite enterprise (Section 4.2.2).
TABLE 6.1 - Relative Importance of Main and Secondary Products of Some Crops on a Sample of Forest-garden Farms
|
Crop |
Main product |
Secondary products | ||||||
|
Pepper |
pepper |
1.00 |
|
|
|
|
|
|
|
Rubber |
latex |
0.78 |
timber |
0.09 |
fuel |
0.10 |
seed |
0.03 |
|
Tea |
leaf |
0.85 |
fuel |
0.15 |
|
|
|
|
|
Coconut |
copra |
0.78 |
husks |
0.15 |
charcoal |
0.06 |
leaf |
0.01 |
|
Cloves |
buds |
0.74 |
stems |
0.25 |
dust |
0.01 |
|
|
|
Nutmeg |
nutmeg |
0.70 |
mace |
0.30 |
|
|
|
|
|
Jackfruit |
flesh |
0.75 |
seeds |
0.20 |
fuel |
0.05 |
|
|
Source: Data from a 1978 survey by the senior author.
Financial profitability of activities/enterprises is discussed in Chapter 4 and of the whole-farm system in Chapter 7. As shown in Figure 6.1, financial profitability becomes a less important performance criterion as analysis moves towards the subsistence end of the farm-type continuum. In particular, money profit or gross margin as a measure of performance of activities is typically both not possible and largely irrelevant for Type 1 (i.e., subsistence) farms and often, to a significant degree, for Type 2 (i.e., semi-subsistence) farms because of their lack of market interaction.
Financial profit as a criterion for measuring the performance of farm-household systems is often unreliable. This is because, on small farms, money profit is often generated at the expense of weakening or distorting the system through such factors as increasing household exposure to debt for purchased farm inputs, the danger of fostering an exploitative and non-sustainable rate of resource use (causing soil degradation), reduction in the level of reliability of household food supply and increasing risk. Nevertheless, many farm-economic surveys undertaken to measure the performance of small farms continue to gauge this solely in terms of financial profit, even when these farms might have quite different objectives (as discussed below).
Profit is normally measured in money terms as gross financial revenue minus total financial cost per period. Note, however, that it may - if need be - also be assessed subjectively in qualitative terms as net gain, i.e., as total benefit less total cost however measured. Such an approach might be used in assessing the performance of Type 1 (subsistence) farms having no significant market interaction, leading to qualitative assessment of a Type 1 system as, e.g., profitable or not profitable.
Associated with profitability, however measured, is the matter of farm-size adequacy. Clearly, a prime requirement of any whole-farm system is that it be of sufficient size to satisfy the farm-based needs of its primary beneficiaries. Small farms should thus be assessed in terms of income adequacy, i.e., their ability to sustain the farm household's need for income in cash and/or kind without causing resource or environmental degradation. Income adequacy is thus an important aspect of profitability.
System stability refers to the absence or minimization of year-to-year fluctuations in either production or value of output. (The latter also implies either stability in input costs, yields and prices or counterbalancing movements in these influences on value of output.) Where conditions are favourable, price and production instability can often be countered by more careful activity selection (e.g., of drought-tolerant varieties, pest-immune crops); by diversification of activities; by seeking greater flexibility in product use or disposal; by multiple cropping over both space and time; and by increasing on-farm storage capacity and post-harvest handling efficiency.
In some situations the most direct strategy for stabilization is simply to increase production/income to a level which allows an annual surplus to be retained/invested in good years to cover deficiencies in poor years. This is generally possible on farms of Type 5 (large commercial family farms) and Type 6 (estates). (The classical tea/rubber/oilpalm/coconut estate systems are generally production-stable but price-unstable.) Many variations of such a strategy are possible. Around Ponorogo in the Madium Valley of Java a common practice among farmers growing sugarcane, paddy and palawija crops (i.e., food crops other than rice) is to invest the proceeds of the (relatively stable) sugar crop in gold, then later sell this to finance the following (relatively unstable) subsistence food crops. In the hills of eastern Bhutan where mono-crop maize is the stable food and monsoon rains are erratic, the common stabilizing strategy is to plant 30 to 40 per cent more maize than will actually be required if the season turns out well which - since the crop requires no cash inputs but only family labour and oxen - is an insurance premium willingly paid. (But the social costs of this were noted in Section 6.2.1 above.)
The magnitude of year-to-year variation in yield varies widely among crops and locations. The data presented in Table 6.2 for two common Sri Lankan tree crops, clove and coconut, illustrate the magnitude of possible yield fluctuations and the importance of the production (and income) instability problem which faces the smallholder clove growers in comparison with the growers of such stable crops as coconut. While cloves are often a very profitable crop, this would be partly offset by their high level of price and income instability. As would be expected, this usually leads small farms to combine cloves with other lower value/lower risk crops in order to achieve greater stability in the farm system as a whole.
Measuring stability/instability
Price/yield/income stability is most conveniently measured in terms of the
coefficient of variation, denoted by CV, which expresses the standard
deviation, denoted by SD, or positive square root of the variance (V)
of a sample of observations on a variable X as a percentage of the sample's
mean value 
.
Thus
where n is the number of observations, Xi is the i-th observation and S denotes the sum of the following values for i from 1 to n. The set of observations X1, X2...Xn may come from a sample generated across time or space or both. Thus the lower section of Table 6.2 gives an annual time-series set of observations on copra yield per acre on a particular estate in Sri Lanka for the 13 years 1960 to 1972. In Table 6.3 the CV of this sample of copra yields is calculated as 11.5 per cent. The upper section of Table 6.2 gives a set of data on clove yield which is both of a time-series (years 1967 to 1972) and spatial (cross-section for five farms) nature.
TABLE 6.2 - Year-to-year Variation in Clove and Coconut Yield
|
Clove: Relative annual yield over time on five farms, Sri Lanka (1972 base) | |||||
|
Farm no: |
(1) |
(2) |
(3) |
(4) |
(5) |
|
1972 |
100 |
100 |
100 |
100 |
100 |
|
1971 |
0 |
2 |
0 |
40 |
600 |
|
1970 |
70 |
457 |
5 |
13 |
0 |
|
1969 |
93 |
71 |
30 |
100 |
0 |
|
1968 |
70 |
- |
- |
- |
75 |
|
1967 |
0 |
- |
- |
- |
- |
|
Coconut: Annual copra yield from astand of mature trees, Sri Lanka (piculs per acre) | |||
|
1960 |
14.0 |
1967 |
11.6 |
|
1961 |
12.4 |
1968 |
12.5 |
|
1962 |
10.8 |
1969 |
10.0 |
|
1963 |
10.5 |
1970 |
12.6 |
|
1964 |
9.5 |
1971 |
11.4 |
|
1965 |
9.9 |
1972 |
11.8 |
|
1966 |
10.5 |
|
|
Source: Data from a 1972 survey by the senior author.
Because CV is a pure number, it can be used to compare the relative stability of different activities/systems. For example, the CV of clove yield based on the 23 observations of Table 6.2 is 157 per cent, implying that income on a clove-only farm - due to the yield effect and ignoring possible price effects and differences in flexibility of product use after harvest - is some 13 times less stable than income from coconuts. Likewise, comparison of the CV values for the clove-yield sample data of farms (1) and (5) of Table 6.2 indicates yield is twice as unstable on farm (5) with a CV of 163 per cent as on farm (1) with a CV of 80 per cent.
Of course, a stable system or activity is not necessarily superior to an unstable one. Depending on relative costs/prices, an unstable activity may still be preferable to a stable one on grounds of long-run relative profit. But, other things being equal, stability will usually be chosen over instability, especially in subsistence situations where the goal is food rather than money, and where a high CV for yield might be synonymous with recurring famine.
In addition to the inclusion of system-stabilizing activities in the farm system, there are other means of reducing system instability. These relate to the diversification of activities and their products; to achieving flexibility in the post-harvest use/disposal of products; and to the time-pattern of income receival. These approaches to mitigating instability are discussed below.
TABLE 6.3 - Calculation of the Coefficient of Variation (CV) for the Copra Yield Data of Table 6.2
|
Year |
Copra Yield |
Deviation |
Squared deviation |
|
1960 |
14.0 |
2.65 |
7.02 |
|
1961 |
12.4 |
1.05 |
1.10 |
|
1962 |
10.8 |
-0.55 |
0.30 |
|
1963 |
10.5 |
-0.88 |
0.72 |
|
1964 |
9.5 |
-1.85 |
3.42 |
|
1965 |
9.9 |
-1.45 |
2.10 |
|
1966 |
10.5 |
-0.85 |
0.72 |
|
1967 |
11.6 |
0.25 |
0.06 |
|
1968 |
12.5 |
1.15 |
1.32 |
|
1969 |
10.0 |
-1.35 |
1.82 |
|
1970 |
12.6 |
1.25 |
1.56 |
|
1971 |
11.4 |
0.05 |
0.01 |
|
1972 |
11.8 |
0.45 |
0.21 |
Mean
Standard deviation
Coefficient of variation
Diversity corresponds to 'not having all one's eggs in a single basket.' It refers to a strategy of increasing the number of activities in a system and/or their separate products in order (i) to reduce overall system risk of income or family-sustenance failure and/or (ii) to increase overall production/profit (averaged over time) through a better use of available resources. A high diversity level is conducive to system stability (but diversity might conceivably be achieved at the cost of a reduction in average profit).
Activity diversity
As noted in Chapter 2, in terms of activities the most diversified farms are the small subsistence and semi-subsistence farms of Types 1 and 2, respectively - e.g., the irrigated crop-livestock-orchard farms of North India and Pakistan, the clover-wheat-barley-sheep-rabbit-poultry-scorpion-vegetable farms of China's Loess Plateau, the small mixed crop-livestock farms of South China and Taiwan, and the forest-garden farms of the wet tropics. The possibilities for diversification are relatively limited on Type 3 farms, i.e., small specialist farms growing a single traditional crop such as the paddy farms of Java. Diversification is not a strategy generally available on Type 4 farms, i.e., those growing an industrial crop under conditions dictated by a landlord or factory. While the possibility often exists (e.g., growing food/cash crops within sugarcane rows or in the intervals between cane plantings, as in Mauritius), it is negated by such practical factors as lack of equipment suitable for other than the main crop; or lack of markets; or simply by opposition on the part of landlords or sugar mills to developments which would diminish their power over the tenants.
The three elements contributing to the overall diversity of a farm system are: (i) the number of tree/crop/animal species present; (ii) the number of their respective products; and (iii) the number of ways in which these products can be used or disposed of (i.e., the degree of flexibility they provide as discussed in Section 6.2.5 below). These three elements of diversity exist in both physical and economic (value) dimensions, either or both of which might be relevant to a particular analysis of farm-system diversity.
If diversity comparisons are to be made within or between groups of farms, it may sometimes be sufficient to express diversity level as simply the number of species of trees, crops and livestock present. Generally, however, this would be a poor measure: the species (and their associated activities) need somehow to be weighted according to their relative importance, e.g., in terms of the number of individuals within each species, or of the areas occupied by the various crops, or the amounts or values of outputs from the various activities. One relatively simple measure suited to such assessment is Simpson's diversity index (Simpson 1949; Kumar, George and Chinnamani 1994). This is defined as
where S is the number of species or activities that are present; ni (for i = 1 to S) is the number of individuals in the i-th species, or area devoted to the i-th species or activity, or income or value of the i-th species or activity; and N (=S ni) is the total population of all individuals, or total area across all activities, or total farm income or value across all species or activities. For a farm system with no diversity (i.e., having only a single species or activity so that S = 1 and n1 = N), DI is zero. As farm diversity increases, DI approaches unity, e.g., for a farm with 20 crops each occupying three units of the total farm area of 60 units, DI = 0.95.
Calculating DI values for a small South East Asian mixed-farm system is exemplified by the worksheet of Table 6.4. DI values are calculated (A) on a species/activities or physical diversity basis and (B) on an income basis. In its physical or structural dimension the farm system of Table 6.4 is dominated by tree crops, particularly coffee. Note that difficulties arise in the calculation of DI on a species basis for those crops and livestock activities for which the individuals cannot be enumerated, e.g., as with rice and other field crops or with pond fish. DI might then best be calculated, from a physical perspective, on the basis of the area devoted to each species or its associated activity.
Product diversity
This refers to the number of separate final products of a system or activity. Some of the main outputs from a range of tree/vine crops were listed in Table 6.1. These can be disposed of in a range of ways which also represent an avenue to diversification (see Section 6.2.6 below). As shown in Figure 6.2, a single simple crop such as maize in Java can be significantly product-diversified by the way in which it is managed.
TABLE 6.4 - Worksheet Calculation of Simpson's Diversity Index for a South East Asian Mixed-farm System in Terms of (A) Species and (B) Income
|
Farm structure |
(A) Species or physical diversity |
(B) Economic or value diversity | ||
|
Species/activity |
No. of individuals (ni) |
(ni/N)2 (S = 9) |
Annual income ($ni) |
(ni/N)2 (S = 11) |
|
1. Areca |
50 |
0.0151 |
50 |
0.0011 |
|
2. Jackfruit |
25 |
0.0038 |
70 |
0.0022 |
|
3. Coffee |
200 |
0.2415 |
50 |
0.0011 |
|
4. Pepper |
20 |
0.0024 |
50 |
0.0011 |
|
5. Coconut |
50 |
0.0151 |
50 |
0.0011 |
|
6. Banana |
30 |
0.0054 |
50 |
0.0011 |
|
7. Cloves |
15 |
0.0014 |
100 |
0.0046 |
|
8. Papaya |
15 |
0.0014 |
40 |
0.0007 |
|
9. Vegetables |
? |
? |
70 |
0.0022 |
|
10. Cows |
2 |
0.0000 |
850 |
0.3298 |
|
11. Fishpond |
? |
? |
100 |
0.0046 |
|
Sum |
N = 407 |
0.2861 |
N = $1480 |
0.3496 |
|
|
|
0.7139 |
|
0.6504 |
Considering the range of crops grown on many small farms (e.g., up to six or more on Sind farms, up to 25 or 30 or more on forest-garden farms), the possibilities of integrating different classes of livestock with these crops, and the total number of crop or livestock products which can be generated, it is apparent that diversification can reach very high levels. Small farms producing 40 or 50 or more final outputs are not uncommon.
In general, large commercial family farms and commercial estates (farm Types 5 and 6, respectively) remain undiversified in spite of the many opportunities which theoretically exist. Partly this is because it is felt that diversification would divert management effort away from the traditional main commercial crop. It is probably also due to an overly technical orientation in research to date, e.g., cattle grazed among young rubber trees (failed because of neglect of cattle management practices to prevent damage to the trees); cacao-under-rubber (failed because of crop competition for labour and unwillingness to sacrifice some rubber population); food and grain crops among coconut and rubber trees (agronomically successful but has not reached its potential because of lack of a marketing element in the research program).
FIGURE 6.2 - Product Diversification from a Maize Crop on a Javanese Farm
Income diversity
As exemplified in Table 6.4, Simpson's DI can also be calculated relative to income. The calculated DI values of 0.7139 for species and 0.6504 for income indicate the farm is more diversified in physical terms than it is in economic terms. The (ni/N)2 values also indicate that while the farm's physical structure is dominated by coffee, its economic structure is dominated by the herd of two cows. Another convenient measure of income diversity is given by the income diversity ratio
where Ri (i = 1 to n) is the income from the i-th activity. Note that 1 £ R £ n for Ri³ 0; and the larger the value of R, the higher the degree of income diversity. For the farm of Table 6.4, Ri = 2.86. In contrast, if the 11 enterprises of this farm had contributed equally to total income (i.e., Ri = $134.55), then the level of the income diversity index R would have been 11.
The property of flexibility of product use provides a second dimension to diversification: it refers to the availability of alternative ways of product disposal. There are a maximum of four ways: consume/use, sell/barter, store or process. A product for which all of these possibilities exist is intuitively preferable, other things equal, to one which can only be eaten or must be immediately sold. Further, the quality of processability permits repetition of the consume-sell-store-process alternatives at second, third or higher degree, but very few agricultural products are in fact farm-processed beyond a second-degree stage. Thus, e.g., the sap of coconut/palmyrah/nipah/kital palm is drawn off and farm-processed to make palm sugar or fermented to be drunk as toddy and, less frequently, toddy is further distilled to arrack, but hardly ever is arrack processed beyond this second stage. This also applies to such animal products as milk/butter, skins/leather and wool/cloth.
Farms of Type 4 (small dependent specialized family farms growing a cash crop such as cotton, tobacco, commercial sugarcane etc.) have least flexibility in product use since they have no alternative other than sale. Small subsistence and semi-subsistence farms of Types 1 and 2 usually have the highest overall system flexibility because of the type and number of items produced. Flexibility is well illustrated by the range of ways by which jackfruit are commonly disposed of on a Kandy farm. The family will consume some (as the carbohydrate staple in place of bread or rice), sell some for cash, barter some in the village for a chicken, then clean and dice the remainder to smoke-cure and store for use over the off-season. Further, they will probably extract the seeds and consume these; or sun-dry and barter them for some other food item; or water-store them (for up to eight or nine months) for eventual consumption or sale or barter. Even greater flexibility is possible in the disposal of the many products of the coconut palm (Grimwood 1975).
Time-dispersion of production or income refers to the degree to which a given production or income pattern is predictably dispersed (or, conversely, concentrated) over time - over a season or, more usually, the operating year. It is a measure of the uniformity of within-year production/income flow. (Production, price or income stability, discussed in Section 6.2.3 above, refers to the riskiness or unpredictability of these variables between years or locations.) Time-dispersion is a basis for distinguishing systems from which the product or income is received as a lump amount at one point in the operating year (e.g., in a single harvest month) from systems which yield a uniform flow over the operating period. The two extremes are (a) a product/income which is perfectly dispersed (e.g., received as 12 equal monthly amounts over the operating year each equivalent to 8.3 per cent of the annual total amount) and (b) a product/income which is all received as a single quantity in only one month of the year.
Table 6.5 shows the monthly time-dispersion of total annual production for a sample of tree and vine crops at selected locations in Malaysia and Sri Lanka. As these data show, such crops as tea and rubber are highly time-dispersed; others, e.g., kapok, have far more time-concentrated patterns of production. The table could obviously be extended to include annual or short-term crops and livestock products.
When grown at any particular location, all crops fall into one of three categories in terms of time-dispersion of their products, viz.:
(i) naturally time-dispersed crops (e.g., rubber, tea, cacao, cinnamon)
(ii) naturally time-concentrated crops (e.g. most fruit, vegetables, field crops)
(iii) crops which are time-dispersed by management (e.g., relay-planted, stored-in-ground).
On small farms a high level of time-dispersion (or low level of time-concentration) of production/income is usually desirable for the following four reasons:
(1) Regularity/reliability of food supply: The important dimension in production of perishable food items (fruits, vegetables, animal products) on family-sustenance farms and where storage is not possible is regular and reliable availability rather than the amount of total annual product. A sufficient quantity of jackfruit, milk, eggs etc. available in each month of the year is superior to a larger volume of produce occurring in only one month of the year.2(2) Avoidance of storage costs and losses: Although simple storage methods are generally available (e.g., rodent-proof granaries, anti-weevil grain treatment, smoke-curing or drying), they have not been adopted by many farmers and post-harvest losses continue to range from 20 to 40 per cent. Lack of household supervision of stored produce continues as a major cause of food loss, even when the cost of safe storage is within the reach of the poorest families. Thus, where it can be achieved, a time-pattern of food production which avoids or minimizes the necessity for storage is an alternative which is superior to storage as a means of ensuring food availability.
(3) Minimization of family debt: Near-perpetual indebtedness of small-farm families to landlords, moneylenders and/or shopkeepers is a serious problem throughout much of Asia. Debt is incurred for two main purposes: as credit for family food and material requirements during lean periods, and to meet socio-cultural obligations (weddings, deaths, festivals). Farm systems which yield income only once a year (e.g., tenant-operated sugar farms) are almost sure to enter into indebtedness - all too often under onerous conditions - as a normal part of their existence. Other things being equal, the need for such indebtedness is minimized if the farm system can be so structured as to generate a uniform flow of food and cash income throughout the year.
(4) Technical and economic efficiency: The relatively high efficiency of farm Types 5 and 6 (i.e., large commercial family farms and estates) is due largely to their organization along industrial lines. Processing is an integral part of their operations and efficient processing requires continuous-flow rather than batch-type operation. To achieve this, estates deal with crops (e.g., tea, rubber, cocoa, coconut) which naturally give a highly time-dispersed flow of production over the year. Alternatively, they produce crops which, although each production unit (e.g., hectare) may be time-concentrated, can be sequentially harvested to give a uniform flow of operations and product over the year (e.g., cassava, sisal).
2 The annual time-pattern of production (as opposed to total annual production) has been a largely neglected aspect of agricultural research in relation to small-farm development.
Source: Data from 1978 surveys by the senior author.
These considerations of estate structure indicate corresponding weaknesses on many small farms, e.g., dryland crop farms operated according to seasonal conditions. While such small farms must have a basic set of farm equipment, this equipment might not be used for more than two or three months of the year. (Such excess capital cost will not be great in absolute terms since most equipment will be farm-made, but nevertheless the highly time-concentrated production pattern will require a capital stock some three or four times greater than would be the case if the production pattern was time-dispersed.)
A related weakness consists of the time-bunching in the demand for farm labour relative to the supply-flow of family labour. Total labour supply on a small farm on an aggregated annual basis might commonly exceed annual requirements by 50, 100, 200... per cent, but labour shortage at critical periods (planting, weeding, harvesting) might still impose a major production constraint. This is commonly the case on dryland hill farms operated without draught animals, especially where there is only a short wet-period for land preparation and planting. But the problem is also serious across the great monsoon paddy lands where little can be done in the fields before the irrigation channels begin to flow.
The Western answer to similar problems with highly time-concentrated farm systems - almost an automatic reflex - has been farm mechanization. But other counter-strategies are possible on Asian farms: cooperative work-sharing (such as the 'bawon' harvest system of Indonesia); changing the structure of the system to include crops less sensitive to harvest or planting date; or by making more fundamental structural changes to the system by which labour-intensive field crops are at least partly replaced by near zero-labour food tree crops (such as jackfruit, breadfruit and coconut).
Measurement of production/income time-dispersion
There is no generally recognized measure of time-dispersion of production or income but a useful index of relative dispersion can be constructed on the basis of the dispersion of individual monthly values of production or income relative to their annual totals. Examples are offered below.
Time-concentration of single activities
Table 6.6 shows monthly relative production (or income) for four crops - kapok, pepper, rubber and single-crop rice - on a Sri Lankan farm. For each crop, the coefficient of variation (CV) of its monthly production (obtained in the usual way as per Section 6.2.3) is also shown. As shown for single-crop rice, annual production (or income) of any crop which occurs wholly within a single month represents complete time-concentration and has a CV of 347 per cent. With production (or income) measured on a monthly basis, a relative time-concentration (RTC) index of any other crop relative to such a perfectly concentrated crop can be obtained as the ratio of its CV to the CV of 347 per cent for the perfectly concentrated crop. This results in an RTC index of 0.81, 0.28 and 0.09 for kapok, pepper and rubber, respectively, while the completely time-concentrated single-crop rice has an RTC index of one. The relative time-dispersion (RTD) of production (or income) from an activity or system can then be measured as one minus its relative concentration, i.e., RTD = 1 - RTC, giving RTD values of 0.19 for kapok, 0.72 for pepper, 0.91 for rubber and zero for single-crop rice. (Note that a perfectly time-dispersed crop would have a CV of zero, an RTC index of zero and an RTD value of unity.)
Time-concentration of systems
Discussion so far has related to separate crops or activities which are the components of systems. The relative time-dispersion of a whole-farm system also can be obtained as the sum of the relative time-dispersion (RTD) values of the productive components which comprise the farm system, weighted according to their individual importance. Consider the pepper-rubber-kapok growers around Matale in the Kandy Hills of Sri Lanka. Here a common crop system consists of old rubber trees thinned out to about 40 per acre which are tapped for latex, but the main function of which is to support pepper vines, at two vines per tree. The rubber-pepper fields are enclosed by live fences of kapok, yielding floss and (oil) seed, which also support pepper. Thus the products of this system are latex, pepper, kapok floss and seed (and kapok pods for household fuel). The annual value of production per acre is some Rs 2 400 for pepper, Rs 800 for rubber and Rs 600 for kapok or Rs 3 800 in total. Using these product values as relative weights for the three crop components of the system and taking their relative time-dispersion values from Table 6.6, the system as a whole would have a relative time-dispersion (of production and income) index value of: 0.72 (2 400/3 800) + 0.91 (800/3 800) + 0.19 (600/3 800) = 0.68.
For the several reasons discussed above, the time-dispersion of income, and especially of sustenance food production, is an important dimension of small-farm system performance. Note also that the time-dispersion of more complex systems generating even more products can be quantified by the method outlined.
TABLE 6.6 - Relative Monthly Production (or Income) and Relative Time-concentration and Relative Time-dispersion of Four Crops on a Sri Lankan Farm
|
Month and statisticsa |
Monthly production (or income) as a percentage of annual total by crop |
|||
|
Kapok |
Pepper |
Rubber |
Single paddy |
|
|
January |
0 |
20 |
13 |
0 |
|
February |
0 |
10 |
9 |
100 |
|
March |
0 |
2 |
9 |
0 |
|
April |
0 |
0 |
8 |
0 |
|
May |
80 |
2 |
5 |
0 |
|
June |
20 |
7 |
4 |
0 |
|
July |
0 |
12 |
7 |
0 |
|
August |
0 |
3 |
7 |
0 |
|
September |
0 |
2 |
11 |
0 |
|
October |
0 |
3 |
7 |
0 |
|
November |
0 |
14 |
11 |
0 |
|
December |
0 |
25 |
9 |
0 |
|
|
8.33 |
8.33 |
8.33 |
8.33 |
|
V |
542.42 |
64.61 |
6.61 |
833.39 |
|
SD |
23.29 |
8.04 |
2.57 |
28.87 |
|
CV |
280% |
96% |
31% |
347% |
|
RTC |
0.81 |
0.28 |
0.09 |
1.00 |
|
RTD |
0.19 |
0.72 |
0.91 |
0.00 |
a The statistical measures, V, SD and CV are derived as explained in Section 6.2.3.
Source: Data from a 1978 survey by the senior author.
'.... but in this way the collectors of Kittul (fibre) kill a large number of the palms yearly, to the great sorrow of the toddy and jaggery makers who depend on the Kittul to afford them a living.'Colonial Secretary of Ceylon to Madras Government, 1890.
By sustainability is meant the capacity of a system to maintain its productivity/profitability at a satisfactory level over a long or indefinite time period regardless of year-to-year fluctuations (i.e., of its short-term instability). In an agricultural production context, sustainability is relevant to farming systems of whatever composition, but not necessarily to the individual production phases of short-term crops. The concept involves the evaluation of farm activities and systems in terms of their (interrelated) ecological, economic and socio-cultural sustainability over long time periods of many years.
From a national or agroecoregional perspective, reference may be made to the spiral of unsustainability (CGIAR 1995). As depicted in Figure 6.3, under the pressure of increasing population and inappropriate policies, this is a downward spiral of diminishing resource availability, deteriorating environmental quality and increasing poverty leading to economic, social and political instability. Farmers, especially small farmers of Types 1 (subsistence) and 2 (semi-subsistence), are both possible victims of and contributors to this spiral of unsustainability should it occur. Conversely, through the management of their resources in a sustainable way, farmers can help to prevent its occurrence. Sustainability is thus a very important criterion in assessing the performance of existing and potential farm activities and systems.
FIGURE 6.3 - The Spiral of Unsustainability
Sustainability is a multidimensional concept. In the context of farm systems it may relate to physical, biological, economic and social attributes. Assessment of the sustainability of a particular farm system from both a private and a public view might involve judgements as to its merits in terms of such characteristics as listed below (National Research Council 1993, Ch. 3). To exemplify this listing, intensive cropping (1) on good soil/slope conditions and (2) on poor soil/slope conditions and (3) perennial tree crop plantations are rated high (H), medium (M) or low (L) relative to each attribute.
|
|
(1) |
(2) |
(3) | |
|
Biophysical attributes: | ||||
|
|
Nutrient cycling capacity |
M |
L |
H |
|
|
Soil and water conservation capacity |
M |
L |
M |
|
|
Stability to pests and diseases |
L |
L |
L |
|
|
Level of biodiversity |
L |
L |
L |
|
|
Carbon storage |
L |
L |
M |
|
Economic attributes: | ||||
|
|
Requirement for external inputs |
H |
M |
H |
|
|
Provision of employment |
H |
M |
M |
|
|
Generation of income |
H |
L |
H |
|
Social attributes: | ||||
|
|
Health and nutritional benefits |
M |
M |
L |
|
|
Cultural and communal viability |
H |
M |
M |
|
|
Political acceptability |
H |
M |
H |
Sometimes, because of the dominance of some particularly negative attribute, the unsustainability of a farm system will be clearly evident. Often, however, because of its long-term perspective and multidimensional nature, assessment of a farm system's sustainability must be a matter of judgement or degree involving tradeoffs between such various attributes as listed above. Nonetheless, all farm activities and systems are either sustainable - i.e., capable of indefinite continuation - or exploitative, or restorative. By-and-large, most tree crops, pasture-based livestock (at reasonable stocking rates), sawah or terraced paddy at reasonable intensity, and field-crop systems with a long ley phase are sustainable. Many nutmeg groves in the Kandy Hills are still producing at about 100 years of age. In the same area there are clove plantations which naturally regenerate themselves from seed-fall and thus have an indefinite life. In the Sri Lankan mid-country there are many tea fields with over 100 years of recorded production (but many others, exploitatively managed in the past, have long since had to be abandoned). Vacancies which occur in row-planted cinnamon are usually in-filled to give this crop an indefinite life. Old coconut is commonly inter-planted with young palms with the same result. At their traditional levels of land-use intensity, these are sustainable systems.
On the other hand, as evidenced by Byerlee (1992) and Gill (1995), 'continuous' intensive rice or wheat systems even on good irrigated lands are probably not indefinitely sustainable. The more or less continuous row cropping of clean-cultivated cassava, maize, oilseeds and cotton on lands of significant slope, with the now common annual 'fix' of urea, is certainly not sustainable. In Java, most of the remaining farm systems of the Slendro hills, the southern flanks of Mt Lawu and the karst tracts skirting the Indian Ocean are little more than monuments to systems that have been pushed beyond their limits, as are many of those in the Himalayan foothills. The people cling to them because they have no choice ... 'Bare ruined choirs where late the sweet birds sang'.
Causes of farm unsustainability
Beyond the pressure on the agricultural resource base induced by such primary social causes as population pressure and poverty, farm systems may become unsustainable due to many factors of which the following are probably the most important:
(1) Soil loss due to sheet/rill/gully erosion if unchecked will remove the physical base for plant production. By and large, engineering methods of soil conservation (terraces except on wet paddy lands, contour drains, diversions, strip cropping etc.) have not been successful in Asia (or Africa) except when installed by estates or authoritarian governments. Thus the only practical approach to sustainable land use is through less intensive crops and less demanding (but not necessarily less productive) farming systems combined with a farming systems development approach to soil conservation and sustainability as argued by Norman and Douglas (1994).(2) Soil structure deterioration and nutrient loss through leaching and over-cropping, especially when combined with actual soil loss (above), will also necessitate eventual abandonment of the system (or the land), or the application of ever-increasing quantities of artificial external inputs - leading eventually to the same consequence, often together with adverse downstream effects and watertable pollution.
(3) Declining terms of trade or long-run adverse movements in agricultural commodity prices relative to input costs (especially of imported inputs) are increasingly a prospect facing much tropical and sub-tropical produce (e.g., some oilseeds, cassava chips, sisal and the other coarse fibres). At some point some of these crops might well not be sustainable in marginal producing areas and will have to be abandoned for economic reasons. To the extent that they form components of systems, these systems will have to be restructured. Increasingly, economic pressures for change are also reinforced by socio-political factors: e.g., the liquidation of sub-marginal tea estates in Sri Lanka for village settlement; the growing pressures for inter-row production of food crops on Malaysian cash-crop estates; pressures for diversification and food production on Mauritian sugar estates.
(4) Government failure through the introduction of inappropriate policies affecting agricultural production and resource use or the failure to introduce appropriate policies for the protection of natural resources and the environment (Pinstrup-Andersen and Pandye-Lorch 1994; Scherr and Yadav 1996). Historically, many developing countries have had food price policies favouring urban consumers at the expense of producers. This has undoubtedly engendered poverty and resource degradation among marginal producers. Likewise, many countries have inadequate controls on the use of agricultural chemicals whose indiscriminate use has often caused widespread environmental pollution.
(5) Biological factors (disease, pest outbreaks) have on more than one occasion led to the decimation of crops and farm systems, and to the impossibility of restructuring these under conditions which could be economically sustained (e.g., the abandonment of coffee in Sri Lanka in the 1880s due to rust).
(6) Inequitable research and development relating to a crop in one geographical area not infrequently reduces its economic sustainability in other areas. To the extent that improved varieties and technologies are developed in countries already enjoying a comparative advantage (e.g., coconut in Philippines, rubber and oil palm in Malaysia, specialist tea in China), this will force changes in the farming systems of less advantaged countries, and lead either to their abandonment of these particular crops or, more likely, restructuring of their farming systems into mixed and probably more complex systems.
(7) Regional interrelatedness, whether physical, economic or political, provides another set of factors that can lead to unsustainability. The causes of unsustainability noted in (1) and (2) above, soil erosion and degradation, arise on an individual farm or local group of farms and can (at least theoretically) be removed by local action on a watershed basis. But the non-maritime floods which increasingly devastate the delta farms of Bangladesh arise from causes (e.g., deforestation of the Himalaya chain) located in other up-stream provinces - or indeed in other countries - and these, not amenable to local action, are affecting the sustainability of downstream agriculture on a vast scale. Acid rain in Europe, chemical pollution in the Mississippi, the Nile, the Vistula and some of the East African lakes - these are other examples of real threats to farm system sustainability which arise beyond the farm gate and often beyond the national border.
Alternative system-management strategies
Alternative on-farm management strategies towards resource and system sustainability or exploitation are illustrated by the examples depicted in Figure 6.4. Curve (1) represents a uniform and sustainable system producing 60 income units ($) annually. A second possible system such as depicted by curve (2) might yield an initially higher income, but one which declines over time (e.g., because of erosion, salinity, chemical pollution) until the system becomes economically unsustainable after 20 years.
From a social viewpoint, farmers should select system (1). However, there are many reasons why in fact they often choose the exploitative system (2): (i) the need for maximum current income (as distinct from future income) because of poverty, debt, exploitation by landlords, conditions of tenancy etc.; (ii) limited length of farmer planning horizons (although system (2) is not sustainable, it yields greater total returns if the planning horizon is less than 20 years); (iii) failure to recognize the fact that the declining income of system (2) is caused by resource exploitation (environmental damage is gradual and insidious); (iv) ignorance that a better, sustainable system might exist; and (v) selection of system (2) as a deliberate choice, but with the intention to later - when family income needs decline, when the sons are educated, when the daughters are married - switch to a less exploitative system, or even to a restorative one as represented by curve (2a).3
3 Consideration of these factors leads to the conclusion that the presence of a conservation program in a particular area and the engineering knowledge this implies in designing contour banks, grass waterways, avoiding soil salinity etc. is only one of several necessary conditions for sustainable land use. The others are economic, social and political. The rate of accumulation of engineering and scientific knowledge needed for conservation has long exceeded rates of change in public attitudes towards conservation, without which such engineering solutions cannot be applied - or, if imposed, maintained.
The third alternative, adoption of a restorative system or one which improves the initial productivity conditions, is represented by curve (3). The accumulated income from system (3) exceeds that from system (1) but only after 20 years. System (3) is therefore a rational farmer alternative only for farm families with long planning horizons or who are free from the exploitative pressures of debt and poverty and can afford to wait. From a social viewpoint, however, system (3) will always be a superior alternative.
FIGURE 6.4 - Illustrative Income Flow of Sustainable and Unsustainable Systems
There are many examples of restorative or resource-creating systems - though not as many as of exploitative systems. They are of two broad types. The first seeks to convert some previously exploitative system into a sustainable one. In Sri Lanka several thousand families have been settled on farms growing restorative soil-protecting tree crops in dense stands on old eroded tea lands (without removing the tea). There also some of the estates have been converting from (exploitative) tea to (regenerative) cloves and cardamom, again by interplanting. The second type of restorative system seeks to so improve some initially poor resource base that a sustainable fanning system becomes possible. In Malaysia and Philippines, the nipah palm, planted in saline mud flats, is used to dry out these coastal tracts and create conditions under which more productive species - coconut, breadfruit, jackfruit - can be established as the basis of future settlement farms. Likewise, in the arid zones of Australia and southern Africa, the shrub saltbush is used to remove soil salts and up-grade grazing systems.
Sequential exploitation-restoration
Sustainability does not necessarily require uniformity of production or income over time in all phases of the system. As depicted in Figure 6.5, the vegetable farmers on poor clay soils in Johor successively plant restorative groundnuts, the vegetative parts of which after harvest are placed in a trench, and then a following exploitative crop such as sweet potato is planted to grow largely on the peanut residues. Following three or four cycles of this successively exploitative-regenerative phase system, an exploitative subsystem is introduced: when vegetable prices are particularly high, several exploitative crops might be planted in succession; then, when prices drop, the system is again put into a restorative legume-phase until fertility is recovered.
FIGURE 6.5 - Successive Exploitative and Regenerative Phases in a Johor Vegetable Production System
Another well-known example of sequential exploitation-restoration is provided by the shifting cultivators of Sarawak who slash-and-bum bush to grow their main subsistence maize crop, following this with upland paddy (and then possibly with a cassava crop if land is scarce) before abandoning the site to bush for a six-, seven-, eight-... year restorative phase. The system consists of the successive exploitation or run-down of six, seven, eight ... individual land parcels which comprise the 'farm'. In former times it was stable.
Exploitation over all parcels was in balance with restoration. But now, in many areas of Sarawak, Kalimantan, the southern dry zone of Sri Lanka and parts of Africa, the restorative phase in such slash-and-bum systems has had to be reduced due to population pressure and the exploitative phase prolonged. Because also of the temptation to produce cash crops in addition to food, the exploitative phase is now much intensified and such slash-and-bum systems are breaking down.
When applied to activities, this last of the eight properties requires that any crop or livestock component of a system be capable of structural integration with all other components of the system and its environment in terms of management practices, resources and technologies used, and disposal of products/by-products. Such structural integration is especially important in relation to long-term activities where bad decisions made regarding one activity and their adverse effects on other activities might not be easily rectified. This probably is a statement of the obvious. However, the more that is learned about the residual effects of herbicides and pesticides and their further effects lower down the food chain, the more apparent it becomes that this property of systems and their components has been neglected in the past.4
4 One does not have to go to Asia for concrete examples. In many sugarcane producing areas, including Australia, fields have in the past been so liberally sprayed with weedicides that they are not now permitted by health authorities to be used for animal production, possibly for a 'detoxification' period of 20 years. As a consequence, those farmers who would otherwise have adjusted out of sugar to other products, because of low sugar prices, find themselves locked into this crop indefinitely. What was previously accepted as good sugarcane management is now seen to be incompatible with other alternative activities.
When applied to whole-farm systems the requirement is that each of these be at least not incompatible with other systems in the village or area (for purposes of obtaining inputs and disposing of products). Although the subject has been largely ignored in farming systems development research, there are often close complementary relationships between groups of systems, e.g., in neighbouring villages, without which each would be weaker (Prabowo and McConnell 1993). In the Solo Valley of Java, the farms of Batan (where they grow only paddy and cannot keep cattle) complement those of nearby Boyalali (where they cannot grow paddy but have many draught cattle). This type of inter-village or inter-system complementarity is common throughout Asia. Where it exists, development efforts which remain preoccupied with the optimization of systems in technical and social isolation are likely to achieve no great success.
A related requirement is that both whole-farm and activity systems be compatible with the wider physical, biological and socio-religious-cultural environment. This desirable system property of environmental friendliness appears so obvious that examples should not be necessary. Nevertheless, it is frequently overlooked in farm-systems development. The tale of rice schemes (planned for non-rice eaters) - of mechanization schemes (in areas without a mechanical tradition and with surplus labour) - of chemically-based crop production projects (which would obliterate a thousand years of village culture) .... if it were told, this tale would be a long and doleful one.
It now remains to consider how the criteria outlined in Sections 6.2.1 to 8 above would be applied in specific analytical situations. Such application of the criteria might be considered from the perspective of, first, necessity and, second, desirability.
In terms of necessity, to use only one criterion to assess system performance will sometimes be sufficient. Commonly, for commercial farms, this is some aspect of profit, e.g., gross margin or net farm income. But the use of some other single criterion may also sometimes be necessary: e.g., analysis in support of planning a farm credit program in Field C (i.e., analysis oriented to systems above the farm-household level) might be concerned primarily with the need for credit as determined by the time-dispersion patterns of farm income, and for this purpose most of the other system properties might be ignored. More often it will be necessary to work with some subset of the eight properties and their criteria. In relatively few situations it might be necessary to consider all eight factors, e.g., in planning comprehensive general-purpose rural development projects. As noted above, most of the properties are capable of quantitative measurement; those that may present difficulties, such as sustainability and compatibility, might have to be assessed subjectively.
So much for what may be necessary. In terms of desirability, from both a private and a public view, the aim should be to have farm-household systems that are sustainable and environmentally friendly. Any farm management analyst worth his or her salt will therefore always endeavour to appraise farm and farm-household systems in terms of these two overarching criteria.
Operating objectives, system properties and criteria for their measurement are summarized in Table 6.7.
TABLE 6.7 - Summary of Farm-household System Objectives by Farm Type and Performance Criteria
OPERATING OBJECTIVES
|
Farm type |
Primary objectives |
|
(1) Small, largely subsistence, family |
Subsistence |
|
(2) Small, part commercial, family |
Sustenance and some cash income |
|
(3) Small, independent, specialized, family |
Cash-based sustenance |
|
(4) Small, dependent, specialized, family |
Cash-based sustenance |
|
(5) Large, commercial, family |
Mainly profit |
|
(6) Commercial estate |
Profit |
SYSTEM PROPERTIES AND CRITERIA FOR MEASUREMENT OF PERFORMANCE
|
Property |
Criterion |
|
|
1. Productivity |
Yield per land unit or animal unit or other unit of resource or the value of output per unit of cost. |
|
|
2. Profitability |
In financial terms or measured subjectively as net benefits. |
|
|
|
- of activities |
Gross margin. |
|
|
- of whole farms |
Measures discussed in Chs 5 and 7. |
|
|
- over time |
Measures discussed in Ch. 10. |
|
3. Stability |
Coefficient of variation (CV). |
|
|
4. Diversity |
Simpson's diversity index (DI) |
|
|
|
- of activities |
Number of activities in system. |
|
|
- of products |
Number of products of system. |
|
|
- of income |
Income diversity ratio (R). |
|
5. Flexibility |
Number of first, second ... degree uses to which products can be put (sold, consumed, processed, stored). |
|
|
|
- of a single product |
|
|
|
- of all system products |
|
|
6. Time-dispersion |
Relative dispersion of generation over the operating period (usually year) on a daily/weekly/monthly/quarterly basis as measured by the relative time-dispersion index (RTD). |
|
|
|
- of production |
|
|
|
- of income |
|
|
|
- of whole-farm system |
|
|
7. Sustainability |
No single general quantitative measure. Measurement would relate to physical, biological, economic and social factors with reference to the number of years over which a given system may be operated before its continuation becomes infeasible or inadequate. |
|
|
8. Complementarity and environmental compatibility |
No cardinal measure but an ordinal measure ranking activities or systems on a scale of high, low, neutral or negative relative to their physical, biological, socioeconomic, cultural and religious environmental friendliness could be used. |
|
|
|
- of activities in a system |
|
|
|
- of systems in the environment |
|
Byerlee, D. (1992). 'Technical Change, Productivity and Sustainability in Irrigated Cropping Systems of South Asia: Emerging Issues in the Post-green Revolution Era', Journal of International Development 4(5): 477-496.
CGIAR (1995). Report of the Task Force on Sustainable Agriculture, Document No. MTM/95/10, CGIAR Secretariat, World Bank, Washington, D.C.
Clayton, E. (1983). Agriculture, Poverty and Freedom in Developing Countries, Macmillan Press, London.
Collinson, M. (1983). Farm Management in Peasant Agriculture, Westview Press, Boulder.
Gill, G.J. (1995). Major Natural Resource Management Concerns in South Asia, Food, Agriculture and the Environment Discussion Paper 8, IFPRI, Washington, D.C.
Grimwood, B.E. (1975). Coconut Palm Products: Their Processing in Developing Countries, FAO Agricultural Development Paper No. 99, Food and Agriculture Organization of the United Nations, Rome.
Harwood, R.R. (1979). Small Farm Development: Understanding and Improving Farming Systems in the Humid Tropics, Westview Press, Boulder.
Kumar, M.B., S.J. George and S. Chinnamani (1994). 'Diversity, Structure and Standing Stock of Wood in the Home Gardens of Kerala in Peninsular India', Agroforestry Systems 25(3): 243-262.
McConnell, D.J. (1992). The Forest-garden Farms of Kandy, Sri Lanka, FAO Farm Systems Management Series No. 3, Food and Agriculture Organization of the United Nations, Rome.
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