Economic assessment of the long-term effects of the soil heating technology in Beni Suef Governorate

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Mahmound Mansour, Deputy Director and Mohamed Sultan, Researcher

Agricultural Economics Research Institute, Ministry of Agriculture, Cairo, Egypt

Introduction

The agricultural sector is one of the major sectors in socio-economie development in Egypt. Economic development is a process by which a population increases the efficiency with which it provides desired goods and services. The scarcity of land and capital makes technological improvement the most important source of output growth, perhaps a necessary condition for overall development itself.

Technology is a stock concept indicating the body of knowledge that can by applied in productive processes. Consequently, technological change implies changes in this stock. The significance of technical change is that it permits the substitution of knowledge for resources. In other words, technical change releases the constraints on growth imposed by inelastic resource supplies. Continuous, cumulative technological change is the proven effect of an institutionalized agricultural research system.

Objective

Solar heating technology of soil is classified as a biological technology and aims technically at controlling soilborne organisms (1). That is, solarization is based on a thermal killing of organisms by means of solar heating of the soil. This technology was recently introduced under experimental trials at some experiment stations and on-farm in Egypt. International experience has shown that solarization was applied in some countries for various crops and proved successful both in the short- and long-term effects. Previous studies, especially at Giza Experiment Station, have shown that the effects of solarizing broad beans was not economical (2, 3). Therefore, this study was mainly interested in examining the financial feasibility of the long-term effect of solarization using farm trials in Beni Suef Governorate. The rotation which was used in this study was onions-maize-onions for the agricultural seasons 1986/87 and 1987188. The assessment is confined to examining the magnitude of total income, variable cost, and income above variable costs for solarized plots as compared to the control plots.

Sources of Data

The study is based on the collection and analysis of technical and economic data of soil solarization experiments dealing with field crops. Data for this study were collected from two sources. Primary data concerning technical coefficients and output of the three consecutive crops in the plot that was subject to solarization of soil and the untreated plot were gathered via a farm management survey schedule. The secondary data were secured from the unpublished and published records and files of the General Administration of Statistics of the Central Administration for Agricultural Economics of the Ministry of Agriculture.

Costs of land preparation, planting, cultivation, cultural services until harvest, harvest and the cost of solarization (including the cost of plastic sheets and labour hired to fix it on the soil), and the farm-gate price per unit of each crop, were collected through field visits to the sites of experimental plots. The site of concern is the on-farm trail at Biba district of Beni Suef Governorate.

Technical Background

Thermal killing of pathogens is achieved by continuous mulching of the soil with transparent polyethylene 6 - 9 weeks during hot summer months e.g., July - August. Three to four days prior to mulching, the soil was irrigated to increase the thermal sensitivity of resting structures and improve the heat conductivity. The moistened soil is covered with polyethylene for six weeks. The soil temperature in the upper layers (30 cm) is raised to 40°to 50°C, which is effective in controlling many pathogens and weeds, in a variety of crops. The basic objective of these experiments was to increase crop yields, under furrow irrigation and other conditions of the old land, in Egypt.

Thermal and biological control is involved in the control of pathogens during soil mulching. This would help explain the effect on soilborne pathogens to a depth of over 50 cm. Moreover, this may also explain the long-term effects, i.e., solarization is effective for two or even three successive crops, which may reduce the costs.

There are numerous methods which are used for controlling soilborne pathogens and weeds. Soil solarization is an option which might be used either alone or combined with other methods. Compared with other options, solarization has special advantages and limitations which are explained in a review of the subject.

Solarization can be applied by (a) continuous mulching (broad application) covering the whole field with polyethylene, or (b) strip mulching, i.e., covering each bed separately thus leaving strips of non-solarized soil between the solarized beds which may increase the chances of reinfestation and recontamination of the treated plots. Thus, although more complicated and more expensive, continuous mulching is expected to be of higher efficacy than strip mulching.

Methodology

Many approaches are used to evaluate economic research activities. Some of these approaches are: the parity approach, the scoring approach, experimental approaches, the measures of benefits, the production function, the simulation and the mathematical programming. No one approach is superior in all situations. Completely objective and highly refined research results cannot be expected. Further, there are difficult problems of measurement that limit the use of sophisticated quantitative techniques. Therefore, an important aspect in this type of study is to apply an acceptable method of evaluating research output.

One of the most commonly used approaches for evaluating new technologies is the farm budget approach. A farm budget may be prepared merely to compare the costs and returns resulting from the adoption of a new method, new equipment, increase in soil productivity by the application of line or the installation of a drainage system. It may also be used to determine the prospective expenses and income resulting from a complete change in the farm enterprise or reallocation of farm resources.

The application of sophisticated techniques for evaluation of these experimental trials is not advisable since such trials are still at a rudimentary stage and merely compare between a control plot and a single treatment Therefore, the income above variable costs and benefit cost rations were used to examine the profitability of the new technology of solarization on the treated plot as compared to the unsolarized plot. The total benefits from solarization must be compared with the total treatment cost. If the benefits are higher than the cost, or if the ratio of benefits to costs exceeds unity, the undertaking of this project (technology) is considered to be economically justified. Of course, this analysis may be relatively blunt. It may be necessary to supplement it with extensions regarding the distributional impact of the solarization technology to investigate who incurs costs and who gains benefits, whether the consumer or producer and by how much. No attempt is made to include any distributional or welfare effects - neither relative or absolute - of these experimental solarization trials.

In addition some other supplementary methodologies are used such as the secular trend equation to show changes in the area, yield of onions and maize during 1970 - 1988. The significance of the statistical difference between averages of value of production, labour cost, variable costs, and income above variable costs was tested for the treated as compared to the untreated plot. Comparison of net income with costs is also used as a criterion of profitability of solarization.

The experiment was applied on 18 Kirats (0.42 Ha = 24 Kirats), of which 14 Kirats were solarized, and 4 Kirats were untreated. To expand the results of this experiment to one Feddan (1 Feddan = 0.42 Ha), the produce was multiplied by 24 and divided by 14 for the solarized and by 4 for the control. Also, each cost item was multiplied by the coefficient 0.95 which reflects the net productive area. Production was adjusted for dryness by multiplying maize output by 0.76 and onions output by 0.7936.

Analysis and Discussion of the Results

Secular trend of the area, production and yield of onion and summer maize in Beni Suef Governorate are given for 1970 - 1988 (Table 1). It shows that onion acreage declined at an annual rate of 1.54 percent during that period, but this is statistically not significant. Yield increased at 4.53 percent annually during the same period, and it is significantly different at the 1 percent level of probability. Total production increased at 3.29 percent annually, but this rate is statistically not significant at the 1 percent Ievel.

The same table shows that the summer maize acreage increased at 1.30 percent annually, although this is not significant Yield increased at 2.56 percent annually, and is statistically significant at the 1 percent level. Total production significantly increased at 2.89 percent annually.

Gross Income Analysis

Gross income per Feddan on solarized soil as compared with non-solarized soil for three succeeding crops is given in Table 2, namely, onions, in the winter season of 1986 followed by summer maize in 1987, then onions in 1987/88. Yield of crops in the solarized soil was higher than that of the non-solarized soil by 5 700 kg for the first crop, 560 kg for the second and 2 000 kg for the third, respectively. These increases in productivity represent 211 parcent,50 percept, 28 percent for each crop, respectively. These increases are similar to those in previous studies (2).

Since farm price was the same, one expects an increase in the per Feddan income for the solarized above the non-solarized plot al the same rates. It was observed that the income for the three crops was up to 76 percent higher than the control plot.

Costs. - The variable costs of production comprise inputs of material and labour that vary in proportion with the level of the enterprise. The increases which are involved with solarization are polyethylene and the expense of laying the sheets.

Cost of Soil Solarization

The variable costs for solarization of one Feddan in the Biba district of Beni Suef Governorate for the agricultural season 1986/87, were compared to variable costs for a non-solarized Feddan (Table 3).

This item comprises labour used for land preparation before laying polyethylene sheets, removing the sheets, and the cost of plastic material itself. Labour costs for the solarized plot amount to L. E. 54, compared to only L. E. 12 for control plot. Labour costs for mulching and removing the sheets amount to L. E. 42 or 6.41 percent of the total cost of solarization amounting to L. E. 655. The material costs account for L. E. 601 or about 91.76 percent.

Labour Costs. - The cost of labour required to produce one Feddan of onion, followed by maize, then onions in a crop rotation sequence is higher for the solarized compared to the non-solarized by 16.39 percent, 7.89 percent, and 11.11 percent, respectively (Table 4). Total labour requirements for the solarized plot is higher by 12.35 percent which is attributable to harvesting, grading and shelling operations for the treated plot. Nonetheless, testing the statistical significence of this difference at the 5 percent level has shown that it was not significantly increased (Table 7). In terms of the total cost of labour requirements, there was an increase of 12.58 percent for the solarized above the non-solarized. This difference was statistically tested and was non-significant at the 5 percent level.

Costs of Variable Inputs. - Farm inputs involved are seeds, chemical fertilizers, pesticides, labour and machinery. Farm inputs per Feddan (Table 5) onion (1986/87) and summer maize (1987), and onion (1987/88) for solarized was compared to the untreated soil. Total variable costs for the three crops amounted to L. E. 1561.44 for the treated soil which is above the untreated by L. E.77, or about 5.19 percent.

In a comparison between variable inputs, labour ranks first followed by seed, chemical fertilizer, mechanical costs, and pesticides. These inputs represent, respectively, 44.13 percent, 24.62 percent, 13.57 percent, 10.76 percent and 6.22 percent of the total inputs for the solarized soil. Meanwhile for the control plot these inputs represent 41.23 percent, 25.9 percent, 14.27 percent, 11.32 percent, and 7.28 percent, respectively. There was no significant difference (5 percent level) between the cost of variable inputs in the solarized compared with the non-solarized plot.

Variable Costs by Major Operations. - Variable costs by major operations and gross margin was compared for each of the three crops (Table 6). For the solarized soil, the per Feddan variable costs exceeded that for the untreated soil by as much as L. E. 719.0, or 48.10 percent. Most of the increase is attributed to solarization, in addition to the incremental costs of harvesting, packing, and transportation of the product. Since the costs for and preparation of, fertilization, seeding, irrigation, and herbicides and weeding were the same for non-solarized and solarized the data are not shown. There was no significant difference, however, between variable costs by major operations in the solarized as contrasted with the non-solarized plot (Table 7).

Income Above Variable Costs. - The income above variable costs or gross margin is obtained by subtacting the variable costs from the gross value of output of the crop. This criterion measures the contribution which the crop makes toward the fixed items of the costs. Gross margin per Feddan computed on the basis of gross returns and total variable costs are given for each of the three consecutive crops in the solarized and the non-solarized plots. (Table 6).

Total income above variable costs for the three crops was L. E. 2 570.4 and L. E. 1 219.7 for solarized and the non-solarized soils, respectively. Each crop showed a positive income above variable costs between solarized compared to non-solarized soil (Table 6). However, a statistical test of the difference between the income above variable costs both for treatment and control was not significant (Table 7). This is not surprising because of the low number of observations. These measurements do not take into account the opportunity cost of land through the 10 weeks when plastic sheets cover the treated area when one summer crop i.e. maize could be grown.

Another Method for Estimation of Gross Margin

A second method depends on two assumptions which are used to overcome the previous limitations related to estimation of gross margin. These assumptions concern the idle land on which plastic sheets are applied and no crop is produced, the administrative, and financial constraints which face the proper running of experiments, and omission of the time dimension.

The First Assumption. - Implies that the opportunity cost during the mulching period of 9 -11 weeks could be imputed at the rental value of a crop, (maize) which amounts to L. E. 50, and should be added to the variable cost of solarization.

The Second Assumption. - Since each of the three crops is produced in a different season, there should be a technique for taking the time dimension into account. Since financial transactions are done for a different time span there should be a discounting factor of 15 percent for benefits and costs. The rate of discount presumed is comparable to the prevailing interest rate at commercial banks.

The results indicate that the value of production of the three crops has increased by I-. E. 2 076.6 at current prices for solarized soil, or about 76.2 percent of the production of the same crops without solarization (Table 8). On the other hand, total variable costs increased by L. E. 769.9, or about 51.5 percent of the total variable cost without solarization. The income above variable costs for the solarized soil is, therefore, higher by L. E. 1 300.7, or about 106.6 percent of the income above variable costs without solarization. An additional evidence is the ratio of net benefits to costs which is higher for the solarized soil than the untreated plot which is an additional evidence of the feasibility of that technology.

Using the 15 percent discount rate for adjusting the monetary value of costs and benefits, the value of production of the three crops in the solarized plots increased by about 71.6 percent of the value of production of the same crops without solarization. Meanwhile total variable costs in the solarized plot increased by about 47.9 percent over the variable cost for the untreated plot. But the income above variable costs for the solarized soil is higher by about 95.0 percent than the income above variable costs without solarization.

Concluding Remarks

The above analyses indicate that the long-term effect of soil solarization at Beni Suef experimental site for a crop rotation of onions - maize - onions (1986/87 and 1987/88) is economically feasible. However, this result is contrary to what has been found for a lower value crop rotation of broad beans maize - broad beans at the Giza experimental site (1986/87 and 1987/88). Therefore, one might conclude that solarization is economically beneficial for the onion - maize - onion rotation at Beni Suef experimental site. However, statistical analyses of the difference between solarized and non-solarized plots did not show significance for gross return, cost of inputs, variable costs, and income above variable costs. Since this test had limited observations, further experiments with on-farm solarization trails for various crops under diverse agro-ecological conditions need to be conducted. Moreover, plant pathologists assert that reusing the polyethelene sheets for 1-2 times could improve the economics of this technology by reducing the cost of solarization. Additional tests on plastics, and reusing plastic to reduce solarization costs should be one of the research areas in the future.

References

1. Katan, 1. 1981. Solar heating (solarization) of soil for control of soilborne pests. Ann. Rev. Phytopath. 19:211-236.

2. Mansour, M. 1986. Economics of Protected Agriculture in Egypt; National Workshop on Protected Agriculture, Ministry of Agriculture and Land Reclamation in Cooperation with FAO and UNDP; Cairo.

3. Mansour, M. and M. Y. Sultan. 1988. Economic Assessment of The Long-Term Effects of the Soil Heating Technology; Research Bulletin No. 12, Ministry of Agriculture and Land Reclamation; Cairo.

Table 1. Secular Trend of Area, Production, and Yield for Onions and Summer Maize in Beni Suef Governorate during 1970 - 1988¹

1 Source: Ministry of Agriculture, Central Administration for Agricultural Economics, unpublished records.
2(*) Significant at the 1 percent level.

Table 2. Yield of Onions and Maize for Solarized and Non-solarized Plots al Biba District of Beni Suef Governorate during 1986/87, 1987/88¹

1 Source: collected and calculated from Biba District of Beni Suef Governorate.

Table 3. Cost of Solarization, Biba District of Beni Suer Governorate, 1986/1987¹

1 Source: Collected and calculated through a questionaire schedule from the solarization experiment on onions at Biba District of Beni Suef Governorate.

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