SOIL CONSERVATION PROJECT MAG-GTZ
 

ECONOMICS OF NO-TILL COMPARED TO TRADITIONAL CULTIVATION SYSTEMS ON SMALL FARMS IN PARAGUAY
 
 

POLICY AND INVESTMENT IMPLICATIONS

William J. Sorrenson

Consultant GTZ

Cesar Duarte

DIA/MAG

Justo Lopez Portillo

DIA/MAG

August 1998

CONTENTS

Currency Equivalents

Abbreviations

Acknowledgements

Terms of Reference

SUMMARY AND CONCLUSIONS

1.INTRODUCTION

BACKGROUND

  1. Soil Erosion and the Economic Impact of Soil Conservation
  2. Economics of No-till
  3. No-till on Small Farms in Paraguay
  4. Socio-economic Context of Small Farms

THE STUDY

  1. Objectives
  2. Methodology

2. FINANCIAL ANALYSIS OF SMALL FARMING SYSTEMS IN EDELIRA

    1. BACKGROUND
    2. THE FARMING SYSTEMS ANALYSED
    3. CONVENTIONAL CULTIVATION SYSTEMS

      4. 2.3.1 Introduction
      2.3.2 Conventional Cultivation System Case Study – Sr Bruno Rodrigues

    1. NO-TILL SYSTEMS

      2. 2.4.1 Introduction
      2.4.2 No-till Case Study Type I – Sr Teofilo Medoza
      2.4.3 No-till Case Study Type II – Sr FlorencioOzune
      2.4.4 No-till case Study Type III – Sr Victor Ramirez

    1. COMPARISON OF THE ECONOMICS OF CONVENTIONAL AND NO-TILL FARMING SYSTEMS IN EDELIRA

3. FINANCIAL ANALYSIS OF SMALL FARMING SYSTEMS IN SAN PEDRO

    1. BACKGROUND
    2. CONVENTIONAL CULTIVATION SYSTEMS

      3. 3.2.1 Introduction
      3.2.2 Conventional Cultivation System Case Study – Sr Agustin Akino

    1. NO-TILL SYSTEMS
      3.3.1 Introduction
      3.3.2  No-till Case Study I – Sr Lucas Ledezma 
      3.3.3  No-till Case Study II – Sr Ramon Oporto
    1. COMPARISON OF THE ECONOMICS OF CONVENTIONAL AND NO-TILL FARMING SYSTEMS IN SAN PEDRO

4. RECUPERATION OF THE FERTILITY OF EXTREMELY DEGRADED SOILS IN CENTRAL PARAGUAY

    1. INTRODUCTION
      4.1.1 General Backgound 
      4.1.2 Parcelas 
    1. FINANCIAL ANALYSIS OF CONVENTIONAL CULTIVATION SYSTEMS IN PARAGUARI AND THE INTRODUCTION OF NO-TILL AND GREEN MANURE CROPS

      2. 4.2.1 Small Farms in Paraguari 
      4.2.2 Representative Farming Systems 

    1. COSTS AND BENEFITS OF IMPROVED SOIL FERTILITY IN CENTRAL PARAGUAY
      4.3.1 Background an Justification 
      4.3.2 Project Description
      4.3.3 Economic Impact for Farmers 
      4.3.4 Financial Incentives Needed for Farmers 
      4.3.5 First Phase Project Costs
      4.3.6 Funding of the First Phase

5. POLICY AND INVESTMENT IMPLICATIONS

    1. BACKGROUND
    2. POLICY ISSUES

      3. 5.2.1 Research and Extension Services
      5.2.2 Small farmer Organisation
      5.2.3 Credit
      5.2.4 Marketing, Roads and Electricity

    1. INVESTMENT IMPLICATIONS FOR THE RECUPERATION OF FERTILITY ON EXTREMELY DEGRADED SOILS IN CENTRAL PARAGUAY

      2. 5.3.1 On-farm Investment Requirements
      5.3.2 Small Farmer Loan Requirements
      5.3.3 Ability of Small Farmers to Service Loans
      5.3.4 Off-farm Investment 

    1. INVESTMENT IMPLICATIONS FOR THE EXPANSION OF NO-TILL ON SMALL FARMS IN PARAGUAY
      5.4.1 Farm Machinery and Equipment Requirements
      5.4.2 Loan Requirements for te Expansion of NT 
      5.4.3 Off-farm Investment Needs 

6. RECOMMENDATIONS

REFERENCES

APPENDICES

A1. EDELIRA

A1.1 Sr Bruno Rodriguez Peives
A1.1.1 Description of Farming System
A1.1.2 Financial Analysis Detailed Tables 
A1.2 Sr Teofilo Mendoza
A1.2.1 Description of Farming System 
A1.2.2 Financial Analysis Detailed Tables
A1.3 Sr Florencio Ozune
A1.3.1 Description of Farming System 
A1.3.2 Financial Analysis Detailed Tables
A1.4 Sr Victor Ramirez Villes
A1.4.1 Description of Farming System 
A1.4.2 Financial Analysis Detailed Tables

A2. SAN PEDRO

A2.1 Sr Agustin Akino
A2.1.1 Description of Farming System 
A2.1.2 Financial Analysis Detailed Tables
A2.2 Sr Lucas Ledezma
A2.2.1 Description of Farming System 
A2.2.2 Financial Analysis Detailed Tables
A2.3 Sr Ramon Oporto
A2.3.1 Description of Farming System 
A2.3.2 Financial Analysis Detailed Tables

A3. FINANCIAL ANALYSIS PARAGUARI

A3.1 Detailed Crop Budgets
A3.2 Farm Model Analysis
A3.3 Pilot Project 

A4. ITINERARY


Currency Equivalents
(as at May 1998)
US$ 1 = Gs 2,800




Abbreviations
BID Interamerican Development Bank
CAH Creditos Agricola de Habilitacion
CC Conventional cultivation
DIA Agricultural Research Directorate
DEAG Agricultural Extension Directorate
FDC Fondo de Desarrollo Campesino
Gs Guaranis (Paraguayan currency)
GTZ German Agency for Technical Co-operation
Ha Hectare
IAPAR Parana State Agricultural Research Institute
MAG Ministry of Agriculture and Livestock
NGO Non-governmental Organisation
NPK Nitrogen, phosphorus and potassium
NT No-till
SD Siembra directa
TOR Terms of Reference
US$ United States of America Dollar 
 



ACKNOWLEDGEMENTS

The authors wish to acknowledge the excellent co-operation they received from the following small farmers who so freely gave of their time and knowledge. The farms of these farmers where analysed in depth and provided the case studies on which the study was based.

Edilira: Teofilo Mendoza

Florencio Ozune

Bruno Rodriguez Peives

Victor Ramirez Viller 

San Pedro: Agustin Akino

Lucas Ledezma

Ramon Oporto

Paraguari: Pablo Alfonso

Sixto Ayala

Pedro Lezcano

Miguel Morel

Ambrocio Perez
 
 

There were a number of other farmers in Edelira and Paraguari who were also interviewed by the study team. Unfortunately there was insufficient time to analyse their farming systems in depth. They did however, provide valuable information and insights for the study.

The authors would also like to acknowledge the following people who made major contributions to the study:

Edelira: Magin Meza, DEAG

Elba Lopez de Meza, DEAG

San Pedro: Fabiano Cespedes, DEAG

Paraguari: Dulce de Bernal, DEAG

Dr Telmo Enciso, DEAG

Luis Gomez, DEAG

Marcos, GTZ

Jose Nilton Sanguanini, GTZ

Special mention is due to Rolf Derpsch and Ken Moriya, of the MAG-GTZ Soil Conservation Project, for their untiring interest in this study, for their help in organising the field work, for providing information and comments on early draft portions of the report.
 
William J. Sorrenson, Economics Consultant, Tauranga, New Zealand

Cesar Duarte, DIA/MAG, Asuncion, Paraguay

Justo Lopez Portillo, DIA/MAG, Asuncion, Paraguay

TERMS OF REFERENCE

  1. Advise and train local counterparts is assessing the economics of soil erosion and conservation on small farms (total farm area of less than 20 hectares with no tractor mechanisation) and its implications at state level.

  2. Analyse the benefits and costs of the no-tillage system compared to traditional agriculture, conventional tillage and soil conservation systems on small farms. Quantify direct and long-term costs of traditional farming systems compared to the "mulch-based agricultural systems approach" advocated by the MAG-GTZ Soil Conservation Project.

  3. Assess the profitability of farming systems under no-tillage compared to conventional tillage for small farmers in different agro-ecological and socio-economic regions.

  4. Use a farming systems approach in comparing the economics of traditional and conservation farming systems.

  5. Quantify the benefits and costs of recuperating the fertility of extremely degraded soils in Central Paraguay, in order to provide an adequate economic base to implement soil recuperation on a large scale with the help of local banks (CAH, BNF).

  Table of Contents