Appendix 10

Economic Aspects of Zero Tillage

The economic gains from Zero Tillage are easily identified on farms of nearly all types and sizes. The saving in labour for small farmers using animal traction or manual methods is especially significant. The data from southern Brazil shown in the table below come from a survey of dozens of farmers in RS state. The dramatic reduction - 68.3% - in man-hours/ha is the most important factor influencing adoption of ZT and the satisfaction which it generates. Part of the latter derives from the ability to undertake other economic activities in the time saved, and thus increase total income.

Table 10.1

Comparison of labour demands under Zero and Conventional Tillage using Animal Traction for 1 hectare of maize. (Source: Melo I. J. B. - EMATER-RS)

In complementing and corroborating these results in an early pilot project in 1992, the extension service in Paraná state identified the following advantages of ZT for small farmers:

A Resumé of Benefits for Small Farmers who Adopt Zero Tillage

• · Spare family labour capacity can be used in other remunerative activities;
• Preservation of the farmer's soil resource and the environment in general;
• Reduction in the level of drudgery for crop establishment provides better quality of life;
• A disposition to adopt other technological innovations:
• Significantly better yields and returns as a result of the above factor;
• The trend of rural out-migration is reversed.

With Brazil's tendency towards smaller families - with two surviving children per family - the socio-economic system can become stable when ZT is widely adopted by small farmers.

Specific comparisons for the Cerrado region are limited to large farmers. In general, for normal rainfall years, yields and production costs are similar for farmers beginning in ZT or remaining in CT. But there is a distinct yield advantage for ZT in years with dry spells (veranicos) and difficult planting conditions, when ZT allows earlier planting. The table below summarizes differences between direct costs of soya and wheat in the first and third years of ZT for a single farm (Landers et al. 1994).

Table 10.2

Relative direct costs of soybeans and maize on a large mechanized farm in the Cerrado (Goiás state). (Source: Landers et al., 1994)

Crop and project year:	ZT	CT	PD-PC
	(US$/ha)*	(US$/ha)	Difference US$ - (%)
Soybeans years 1 and 2	275.06	259.13	+ 15.9 (6.1%)
Soybeans years 3 to 20	264.06	259.13	+ 4.9 (1.9%)
Maize years 1and 2	333.93	331.82	+ 2.1 (0.6%)
Maize years 3 to 20	325.23	331.82	- 6.6 (2.0%)
* 1994

Note: Farmers report that more recent figures show ZT soybean costs equal to CT for the first two years and then achieving up to 10% reduction. Maize costs start about equal and achieve about a 5% advantage after the third or fourth year when the system no longer requires extra nitrogen to compensate for the amount sequestered in the crop residues.

This table shows an IRR almost three times higher for ZT in the base situation before the sensitivity factors are taken into account. There are a number of hidden benefits which farmers have identified and these were estimated approximately from anecdotal data and applied to the base situation, with significant improvement in the original advantages of ZT over CT. Most notable is the increased return when a greater proportion of second cropping is made possible by ZT.

Table 10.3

Sensitivity analysis of the internal rate of return of the farm whose costs are shown in Table 10.2. Source: Landers et al. (1994)

In a survey of eight medium and large mechanized farms in the Cerrado region, illustrated in Table 10.4, Landers et al. (1994) showed an average 44% reduction in power requirement per hectare between ZT and CT. Consequent reductions in the investment in farm machinery, using depreciated values, were estimated in a separate study of three farms at between 4% and 27% (Landers, 1996),

Table 10.4

Survey of power requirements comparing Conventional, Minimum and Zero tillage in hp/ha. (hp = horsepower) Source: Landers et al. (1994)

* Part of area irrigated

There is also a considerable saving in diesel fuel consumption as the annual figures for farm diesel use and total farm tractor hours show in Table 10. 5. This analysis covers the six-year period of conversion from 100% CT to 100% ZT. It was also possible to reduce the number of machinery operators to almost half, while the others were gainfully employed in new farm enterprises.

Table 10. 5

Evolution of areas planted in Conventional and Zero Tillage and of total farm tractor hours and total farm diesel consumption (including combine harvesters and lorries)

Source: Sementes Primavera, Planaltina, GO.

There are considerably more financial advantages when pastures are rotated with crops. Stocking rates for animals are from three to five times higher owing to residual fertility from the crop phase, and at the same time, the crops benefit from lower weed, pest and disease control costs and improved soil structure, as shown in Table 10.6.

Table 10.6

Benefits of Pasture Renovation with a ZT Arable Phase (Source: Fundação MS, Maracajú, MS, Brazil)