The financial implications of cover crops in summer cereal systems in the Eastern Free State area over the long term

Date
2021-12
Journal Title
Journal ISSN
Volume Title
Publisher
Stellenbosch : Stellenbosch University
Abstract
ENGLISH SUMMARY : Global population growth places tremendous pressure on the world’s natural resources. One of the greatest challenges for South Africa’s agricultural sector is to produce enough food for a growing population, with less available arable land. Conventional farming practices therefore need to be replaced by more sustainable farming practices. These practices will ensure sustained food security by efficiently utilising natural resources and thereby optimising agricultural productivity. Conservation agriculture (CA) is the most holistic approach to sustainable agriculture based on the three main principles namely: minimum soil disturbance, maximum soil coverage, and crop rotations. South African farmers began implementing crop rotation practices after the deregulation of the agricultural sector in the 1990s. It was implemented to counteract the risks associated with the liberalised market. Introducing cover crops in a rotation system is a conservation agriculture practice of which the physical/biological benefits are well known. However, the financial implications relating to implementing cover crops in a summer cereal rotation system at farm-level is unknown. This study makes use of three different systems to evaluate the financial implications over an extended time period. For this study the complex, interrelated components and multi-faceted farm system requires a systems approach, more specifically a typical farm approach. Whole-farm budget models which are based on a typical farm within a relative homogenous area in the Eastern Free State, are developed to compare the various systems. The models, developed in Microsoft Excel spreadsheet programs, are used to bridge the gap between various disciplines relating to scientific knowledge. Multidisciplinary group discussions further assisted in integrating knowledge between disciplines and ensured accurate representations of the various systems developed in the models. The components in the model are all interrelated; therefore, a change in one component has a latter effect on the profit of the whole-farm system. The whole-farm profitability for various crop rotation systems were measured based on the Internal Rate of Return (IRR) and Net Present Value (NPV) during the financial evaluation. The evaluation concluded that System 1, which is a maize-soya bean rotation system, is the most profitable at this point in time. The system achieves an IRR value of 17 percent over a random 20-year period. The other two systems are also profitable but obtained lower IRR values. The lower overall profitability of the systems is attributed to the non-cash crops planted. The financial benefits of cover crops are directly related to improved overall soil health, yields, and lower weed and pest infestations.
AFRIKAANSE OPSOMMING : Die toenemende wêreldbevolking plaas geweldige druk op die aarde se natuurlike hulpbronne. Een van die grootste uitdagings vir Suid-Afrika se landbousektor is om meer voedsel vir die groeiende bevolking te produseer met al minder bewerkbare grond. Konvensionele boerderypraktyke moet dus vervang word met meer volhoubare landboupraktyke. Hierdie praktyke sal volhoubare voedelsekuriteit verseker deur natuurlike hulpbronne effektief te benut wat verder tot verbetererde landbou produktiwiteit lei. Tot op hede is bewaringslandbou die mees holistiese benadering tot volhoubare landboupraktyke. Dit is gebasseer op drie geïntegreerde beginsels naamlik: minimum grondversteuring, maksimum grondbedekking en wisselbou. Na die deregulering van die Suid-Afrikaanse landbousektor in die 1990’s, het al meer boere wisselbou praktyke begin implementeer. Die hoofrede was om risko’s te verskans wat met die geliberaliseerde mark gepaard gegaan het. Dekgewasse wat in ‘n wisselboustelsel geïmplementeer word, vorm ook deel van bewaringslandbou waarvan die fisies/biologies voordele alom bekend is. Die finansiële implikasie wat gepaard gaan met dekgewasse in somergraan wisselboustelsels op plaasvlak, is minder bekend op die stadium. Hierdie studie maak dus gebruik van drie verskillende stelsels om sodoende die finansiële implikasie te identifiseer oor ‘n gegewe tydperk. Die komplekse, interafhanklike komponente en multi-fasette van die boerderystelsel in hierdie studie benodig ‘n stelselsraamwerk, meer spesifiek ‘n tipiese plaasstelsel. ‘n Geheelplaas begrotingsmodel word as basis gebruik om vergelykings mee te tref. Die modelle is gebasseer op ‘n tipiese plaasstelsel in die relatief homogene boerderygebied in die Oos-Vrystaat en word met behulp van Microsoft Excel geskep. Die modellering van volledige boerdery modelle skep die geleentheid vir die navorser om die kennis van die multi-dissiplinêre groepsgesprekke te integreer binne meerjarige begrotings en so ook die gaping tussen verskillende dissiplines verder te verklein. Die groepsbesprekings verseker die akkurate weerspieëling van die verskeie stesels wat geskep word deur middel van die begrotingsmodelle. Al die komponente in die model is geïntegreer, wat daartoe lei dat indien een komponent verander, dit ‘n impak op die winsgewendheid van die boerderystelsel in geheel het. Die geheelplaas winsgewendheid vir die verskillende wisselboustelsels is gemeet deur die Interne Opbrengskoers (IOK) en die Netto Huidige Waarde (NHW) gedurende die finansiële evaluasie. Na noukeurige evaluasie is dit duidelik dat Stelsel 1 wat ‘n mielie-sojaboon wisselboustelsel is, die mees winsgewende sisteem is. Hierdie stelsel behaal ‘n IOK van 17 persent oor die 20-jaar periode. Die ander twee stelsels is beide winsgewend maar behaal laer IOK persentasie waardes. Die hoofrede vir die laer winsgewendheid is die feit dat dekgewasse as ‘n nie-kontant gewas geklassifiseer word. Die finansiële voordele van dekgewasse word direk geassosieer met algehele verbeterder grondgesondheid, hoër opbrengste en laer onkruid- en plaag-druk.
Description
Thesis (MSc)--Stellenbosch University, 2021.
Keywords
Cover crops -- Economic aspects -- Free State (South Africa), Grain -- Free State (South Africa), Crop rotation -- Free State (South Africa), UCTD
Citation