ROTATIONS  COMPARED

RISK OF LOSS

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THE ROTATIONS COMPARED

CHAPTER HEADING

SUMMARY OF CONTENTS

Soil erosion is the main sustainability issue for farming in the cereal zone of
the WANA region. The impact of the four rotations on soil erosion is
examined.

The possible benefits of moisture storage still lingers on as an issue with
many farmers. This chapter shows how moisture storage (if it occurs) cannot justify the use of a long cultivated fallow.

Costs and returns are the major determinants of farmers profits. The cost of production for each rotation is examined both for small and large farmers.

Returns relate to the level of output and price. This chapter looks mainly at
output.

YOUR ARE HERE

For small farmers with few resources and financial reserves risk is
particularly import. A balance needs to be struck between high profits and
risk.

Each rotation has an inherent level of weed control. Other weed control
measures can be applied (see later chapters) but the natural ability of the
rotation to "clean" the land or otherwise is an important part of the decision
making process.

The amount of labour and the time it is used are an important aspect of each rotation.

This chapter looks at the capital requirements for each rotation but machinery is treated separately (see below)

Machinery is a special part of the general capital requirements. It is
particularly difficult for small farmers.

We have assumed that the starting point for most farmers is the growing of a cereal crop. We have examined the conflict between the requirement of the cereal crop and the new crop, new forage or pasture being introduced into the rotation.

Small farmers are resource poor. In this chapter we have selected the aspects of the above comparisons that would be appropriate for small farmers.

This chapter provide a framework for selecting a combination of the four
rotations and other variations.

The Zaghouan 4 rotation is not included in the comparison. It is an innovation from Tunisia that cleverly overcomes many of the problems of medic on small farms.

FOUR COMMON ROTATION ON THE GROUND IN THE WANA REGION

SEASON

ROTATIONS

CEREAL - FALLOW

CEREAL - MEDIC
( Traditional rotation)

CEREAL - VETCH

CEREAL - GRAIN
LEGUME.

AUTUMN

Cereal crop sown

Cereal crop sown

Cereal crop sown

Cereal crop sown

WINTER

Cereal crop grows

Cereal crop grows

Cereal crop grows

Cereal crop grows

SPRING

Cereal crop matures

Cereal crop matures

Cereal crop matures

Cereal crop matures

SUMMER

Cereal crop harvested
Stubble grazed by livestock

Cereal crop harvested
Stubble grazed by livestock

Cereal crop harvested
Stubble grazed by livestock

Cereal crop harvested
Stubble grazed by livestock

AUTUMN

Weeds germinate naturally

Medic regenerates from seed
produced 18 months earlier.
No cultivation of the land required.

Land cultivated and sown to vetch or similar forage legumes.

Land cultivated and sown to grain legume such as lentils or
chick peas.

WINTER

Weeds grazed. Low stocking rate.

Medic pasture grazed. High stocking rate.

Grazed or more often left for hay.

Grain legumes grow.

SPRING

Land cultivated for fallow

Medic grazed. Pods produced for future regeneration.

Cut for hay.

Grain legumes mature.

SUMMER

Bare soil vulnerable to erosion.

Pods and stubble grazed.

Stubble grazed.

Grain legumes harvested.

Stubble grazed.

AUTUMN

Cereal cycle begins again.

Cereal cycle begins again

Cereal cycle begins again

Cereal cycle begins again


What are the risks?

    There are three major classes of risk facing farmers in the WANA region:-

    * There is climatic risk. The main climatic risk is drought that causes crop and pasture failure or at least a severe reduction in yield.  This climatic risk is difficult to insure for.

    * There are personal and local risks. Illness or accident is a risk for for the principle worker. Local factors such as flooding, fire, hail or storm are risks that can be severe in their impact but they can be reduced through insurance.

    * Market risk due to a fall in prices during the production cycle.

In this section I discuss the climatic risk - mainly drought - on the main rotations.

Economic response.

        There are a number of economic responses to poor rainfall and drought.

Low cost - low risk

       The most obvious means of reducing risk of loss is to reduce costs.

Most of the costs of inputs for cereals, forages and pastures are lost if they fail.

There are some exceptions. Phosphate fertiliser will be available the following year if there is a drought.

Cultivation costs, seed, nitrogen fertiliser, herbicides and most other cost will be lost if there is no crop or forage.

Low cost production techniques that use very few inputs therefore carry less risk. Shallow cultivation is cheaper and therefore carries less risk than deep ploughing.

Nitrogen from legumes cheaper and is less risky than nitrogen fertiliser.

The cereal-fallow rotation is low cost and low risk but also low return. At the other end of the scale grain legumes are high cost and high risk. Below we show how medic pasture can be used to reduce risk.

Low cost production methods such as described in the chapters on cereal production will reduce risk without reducing yield. They include shallow cultivation, reduced seeding rates and fertiliser placement.

Not all input costs carry equal risk

        Nitrogen fertiliser applied to cereal crops has a high level of risk. If the crop fails due to drought nearly all the value of the fertiliser is lost. Little is carried over to the next year.

If spring rainfall is low the application of nitrogen can reduce cereal yields even when total rainfall is well short of a drought.

        Phosphate fertiliser applied to cereals, vetch, medic or grain legumes carries less risk. It will not reduce yields. If there is a drought a large residual value will be carried over to the next season. The loss will be partial.

Machinery costs

    The cost of cultivation and seeding is borne by farmers in different ways.

    *  Farmers without tractors using machinery contractors. The contractors are paid in cash for the use of the machine and the worker. This is a direct cost. If the crop fails all the money is lost. There is considerable risk.

    * Farmers without tractors can reduce the risk by farming on shares with the contractor. Rather than paying in cash for cultivation, seeding and harvesting the contractor is paid with a share of the crop. The risk is shared between the land-owner and the contractor.

    * Farmer with tractors will consider only their cash cost being at risk. They will risk the fuel and other direct costs of running their machinery. Labour and depreciation are a overhead costs that are borne whether the crop or pasture is sown or not. They can take greater risks than farmers without machinery in the knowledge they are putting less cash at risk.

Low cost regenerating medic pasture

Regenerating medic pasture is the lowest cost pasture option in the WANA region.

There are no cultivation cost as with vetch. There are no seed costs as with vetch.

The phosphate is a cost but will be carried over in part if there is a drought.

A rotation such as the Zaghouan 4 has 3 years of medic pasture. Two of these are regenerating medic without any seeding with pods. It is therefore a low risk rotation and well suited to resource poor small farmers.

Insurance

 Insurance can provide useful protection for farmer against many risks. Insurance is particularly useful against risks that have a low frequency but a large effect.

There have been some attempts to insure cereal crops against drought risk.

They have failed.

The reason is that insurance is designed for high losses with a low frequency. For example people pay small premiums for the possible total loss of their house through fire. The incidence is small but the cost to the individual is great. Drought risks are quite different. They are too frequent to fit into the normal insurance pattern.

Conventional insurance schemes fail for another reason. They remove the incentive to adapt (see below) the farm management to the drought. Farmers will not make an effort to salvage some income when they anticipates a drought. If the crops fail the insurance company pays.

Assessing crop yields adds a considerable administrative burden to such schemes.

    We believe crop insurance could work and be valuable to farmers.

    For such a scheme to work the following should be borne in mind:

    * It is pointless to insure all droughts. They happen too frequently. Drought reserves in the form of cash saving, grain and hay are a better methods of coping with a single drought.

    * It would be useful to insure against a drought that occurs after a series of droughts.

If for example one expected a drought frequency of 1 year in 5 years in a certain rainfall zone it is easy to calculate that 2 droughts one after the other can occur reasonably often but to have 3 droughts in a row is exceptional.

Farmers could pay relatively small premiums to insure against the third drought. Farmers would need to develop a management plan that allowed for the first drought. this would include cash reserves, hay and grain.

The second drought would need additional credit as the cash reserves would be exhausted.

The third drought in succession would increase the farmer's debt to an insupportable level.

An insurance scheme could then step in with the knowledge that such a succession of droughts is not common and the pay-out would be in the acceptable 1 in 25 or 1 in 50 range. Such a level of risk would allow premiums to be kept low.

    * Premiums would have to be paid over a period longer than a year. Farmers could not join after a couple of droughts, claim for the third and then leave the scheme again.

    * An army of assessors are needed to measure individual crop if the pay-out is on the deficit between the drought yield on the individual farm and the average yield for the district.

Instead the payments could be made on a district average basis with farmers choosing their own level of cover. If the district average is 10 qx. per hectare the drought insurance could make a payment if the district average yield was less than 5 qx. for two successive years. In the third year of drought the insurance scheme would make up the balance to 10 qx.

Say the district yield was 4 qx. in the third year the payment would be equivalent to 6 qx.

Farmers could make a choice. If they wished to insure for a higher or lower level. They may for example only wish to insure against their costs not the whole return. Farmers would not be penalised if they had a yield above the district average.

Fallow - cereal rotation.

Vetch or grain legume in rotation with cereals.

Classic medic - cereal rotation.

Zaghouan 4 rotation.

Cost of production at risk

Low cash costs. High opportunity cost as two years to grow a single cereal crop.

High cash costs. Particularly high if contractors are used .

Regenerating pasture costs low. Cereal costs low. No nitrogen fertiliser needed.

Costs low for cereals. Pasture needs to be re-seeded once every four years with pods.

Flexibility to change crops or pastures if autumn rain poor.

None. If fallow not sown no return.

Little. If nothing sown no return. Can switch from grain legume to vetch.

Considerable. No need to sow cereals. Medic pasture will be profitable if catch up rain. 

Fallow costs will be lost but medic will grow on fallow and form pasture.

Late sowing due to poor autumn rains

Fallow prepared in spring. Autumn sowing is rapid.

All the land must be prepared and sown in autumn. Late sowing considerable risk.

Only half land sown but all seedbed preparation in autumn. Some risk of late sowing.

Least risk. Fallow already prepared and only 25% of land. Best rotation for optimum sowing of cereals.

Livestock feed failure

Very little livestock feed from fallow. Mostly from cereal stubble.

Livestock feed dependent on sown vetch and cereal stubble

Regenerating medic will use limited moisture more effectively.

More regenerating medic

Management for drought

    As well a economic measures there are management measures that can reduce the risk of drought.

Changing the rotation to cope with rainfall risk

        *  Medic pasture provides an opportunity for farmers, particularly those without machinery, to reduce their risk considerably by adopting a more flexible rotation.

These flexible rotations are most effective in the lower rainfall parts of the cereal zone. The basic assumption is that "if the rain does not fall the risk of drought increases." This appears to be so obvious as to be silly but is worth considering.

If the first rains are expected in October and fail to arrive they can arrive in October + 1 month and then in October + 2 months etc. but as each month passes the chances of receiving adequate rainfall become less. See Decision time in autumn for more details

There is also some evidence that there is a direct relationship between early drought and the total rainfall for the growing season. Weather patterns established early continue through the season. Of course there are exceptions when late rains are excellent and the growing season "catches up" but they are rare.

    *  The cereal - fallow rotation is totally inflexible.

The fallow is prepared in the previous spring. If the fallow is not sown to cereals in the autumn there is no production except perhaps a few weeds for the livestock.

As the autumn season progress without good rain the chances of obtaining a good crop are less but a failure to sow the cereal also results in an almost total loss of production.

Farmers are faced with the choice of zero return from not sowing the cereal or a low return from sowing the crop but with additional costs amounting to an even greater loss.

The Zaghouan 4 rotation includes a fallow season. As with all fallow there is a degree of inflexibility but the farmer has the option of leaving the fallow in a drought to regenerate a medic pasture.

    * The cereal-vetch rotation and the cereal-grain legume rotation offer no more flexibility. The crops and cereals must be sown otherwise there is no production.

    * With the classic medic - cereal rotation the farmer has a choice. See Decision time in autumn

     In the autumn all the medic pasture regenerates after the first rain. Some of this pasture will be in the cereal stubble where the medic regenerates from seed produced 18 months earlier. Some medic pasture will come from seed produced in the previous years. If the rain does not come the pasture does not germinate but the seed remains in the ground.

    With the traditional cereal-medic rotation half the farm is left for medic pasture and the other half is cultivated and sown to cereals.

    The farmer can decide as the season progresses whether to follow a strict half and half pattern.

If the rains are late there is an immediate risk that yields of cereals will be lower than average and profits will be reduced.

Returns from medic pasture will probably be as great or even more than from a cereal crop grown in such a short season.

The farmer may decide to reduce the area sown to cereals below the traditional half. By concentrating all his efforts on a smaller area for cereals, the land will be prepared and sown quicker and the crop will take advantage of the reduced growing season.

A larger area would delay seeding in a season that has already been reduced by the late arrival of the first rain.

If the season does not follow the average pattern but starts bad and then improves with good late rains the farmer has not lost. A late sown cereal crop may have produced well (but the risk that it would not is high) but the medic will also respond to the late rains and can be cut for hay if it is surplus to the requirements of the livestock.

    * Flexible rotations in practice.

    If we take a 100 ha farm as an example (This is only for convenience. The same applies to smaller farmers but we would need to use more decimal points) the farmer has in the autumn the following:

    50 ha of potential medic from the previous season. This would normally be cultivated after the first rain and sown to cereals.

    50 ha of potential medic regenerating in the cereal stubble.

    + Good autumn rains.

    The classic medic rotation proceeds. The 50 ha of medic is cultivated and sown to cereals.

    + Poor autumn rains

    The farmer cultivates say 25 ha of land with the best yield potential and sows it to cereals. If rains improve he sows the next 25 ha. If rains continue to be poor and the sowing time is becoming late he leaves this land to grow medic pasture for another year.
 

Rapid sowing.

    Rapid seed bed preparation and sowing reduces the risk of crops failing due to drought in the spring.

Fallow which is partly prepared in the spring before is useful in this respect.

For other rotations all seedbed preparation and sowing is done in the autumn. Shallow cultivation is faster than deep ploughing.

Herbicides can be used instead of cultivation in a minimum or zero tillage system which allows earlier sowing.

Efficient harvesting.

    The current cereal harvesters used in the WANA region are incapable of harvesting low yielding crops with short straw.

This exaggerates the effect of drought as harvest losses are high on these low yielding crop.
 

Risk with livestock.

Increased production through increased efficiency

    The use of the medic - cereal or the vetch - cereal rotation will result in increased livestock production (although it is possible to use the vetch as a total hay - for - sale system).

If the increased output of feed is used for increased efficiency (more lambs per sheep and heavier lambs for sale) there is no increase in risk above the normal for that number of animals. If feed supplies fail the animals have to be fed on drought reserves or purchased feedstuffs. This relates to the number of animals. Profitable production may be lost as feeding levels may be lower but the flock will survive.

Increased efficiency of the flock can reduce risk through higher lambing percentages.

One option during a drought is to reduce flock numbers rather than purchase feed.

Reducing flock numbers may be a good short term solution to the immediate crisis but carries a future risk of reduced income from the smaller flock or the need to purchase expensive sheep after the drought.

A high lambing percentage give the farmer the option of reducing flock numbers in the knowledge that he can breed more replacement quickly once the drought is over.

Increased livestock numbers.

    When livestock numbers increase there is a greater risk. If there is a total failure of the rain there is no production. Good medic pasture and poor weeds are the same. Farmers will need to assess the risk as they increase their flocks.

    * They can build up reserves of hay, straw, medic pods as drought reserve.

    * They can sell some of the increased pasture production in good years as hay rather than expand their own flocks. In poor years they can keep the limited pasture for their own use.

    * They can sell livestock in the knowledge that their more efficient flock can be built up again quickly when a good season returns.