Agriculture Reference
In-Depth Information
The return-to-land for a certain year is calculated as B-C for that year per ha; this
measure is especially relevant for households with high man-to-land ratios and
desiring to maximize yields even at low labor efficiencies (return-to-labor). Return-
to-labor for a certain year is how much farmers make per day of farm work on
average during that year. It was calculated as (B-C) divided by the number of fam-
ily labor days, with family labor cost excluded from C. This figure may be com-
pared with the local off-farm wage; if farmers make less than that, farmers run at a
loss compared to hiring themselves out (though they may still prefer to work on
their own farm).
A sensitivity analysis has been carried out to study the effects of change in muta-
ble factors such as input and output prices, yields of products and discount rate on
farmers' benefit.
11.4
Basic Data and Assumptions
11.4.1 Land
The land market is underdeveloped in the study area, especially for land under tra-
ditional cultivation. However, as mentioned by MacDicken and Vergara (1990),
there is no need to know land values if only changes of land use are considered,
such as in our case.
11.4.2 Establishment Cost
Establishment cost involves for example land preparation, seedlings, and planting
materials. Costs for preparation vary greatly depending on the condition of the site.
The farmers in the study area purchased seeds and seedlings from private or state
sources, and the average establishment cost is US$1,520 for multistrata agrofor-
estry and US$1,140 for seasonal cultures per hectare (Table 11.2).
11.4.3 Labor Cost
The work at the farm lots is mainly carried out with household labor though use of
hired labor is also practiced in the area. Family labor is not a cash expenditure from
the farmer's perspective. Therefore, all calculations will be carried out for two vari-
ants: with and without inclusion of family labor in the production costs. The sce-
narios with the exclusion of family labor costs seem more meaningful for poor
farmers. The labor cost is shadow-priced at US$1/workday, which is the common
wage of casual labor in this region.
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