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Report 17. Initial financial evaluation of hedgerows

Author

Lea, John Dale (Zach)

Publisher

Auburn, Ala. : Haiti Productive Land Use Systems Project, South-East Consortium for International Development and Auburn University

Abstract

This analysis, based on available information and assumptions, indicates that Leucaena hedgerows utilized either as forage or for soil amendment should be a very attractive investment for many Haitian farmers. The analysis considers the difference in outlays and incomes between the existing use of the land (farmed without hedgerows) and the expected use of the land (farmed with hedgerows used either as forage or as soil amendment). The calculated internal rates of return (IRR) for an investment in hedgerows-utilized-as-forage is over 80 percent for the base-case scenario. The factor causing this very attractive rate is the high relative profitability associated with the forage produced on the hedgerows. Marketing the forage through an animal produces 40 perdent more revenue and less labor expense than the crops (corn and beans) given up when the hedgerow is installed. The calculated IRR for an investment in hedgerows-utilized-as-soil-amendment is over 75 percent for the base-case scenario. The factor causing this very attractive rate is the significant increase and stability in crop yields assumed to result from the use of hedgerow clippings used as soil amendment. Sensitivity tests of the values used in the analysis of the hedgerow-utilized-as-forage indicate that the very favorable conclusion given above is quite robust to changes in assumption values. The deepest drop in the calculated IRR (to 22 percent) was obtained by reducing the rate of hedgerow installation from 5 meters per hour to 1 meter per hour. Lowering the assumed hedgerow forage yield to one-fourth of its expected value reduced the IRR to about 29 percent. A similar reduction occurred when the number of animals produced per dry matter ton of forage was reduced by 50 percent. In all other tests, the IRR remained above 30 percent with most results lying above 50 percent. Conclusion and Recommendations We would expect farmers to be avid adopters of the hedgerow whether they used its annual production of biomass for fodder or for soil amendment. If the farmers are not adopting the practice as we expect, then, the Project and the farmers must not share the same understanding of the hedgerow. To address this situation, we must first be certain that our understanding of the productivity of the hedgerow is correct. This implies a research effort to verify our productivity assumptions. The sensitivity analysis results imply that technical data collection efforts relating to understanding hedgerows-utilized-as-forage should be focused on animal production per dry matter ton of forage, hedgerow yield, and hedgerow installation time. Fully understanding the hedgerow-used-as-soil-amendment requires verification of the critical assumption, used in the analysis, on the difference in yields between hedgerow-protected plots and traditionally farmed plots. Next we must understand the farmers' point of view. Clearly, in the interest of efficiency and in the context of a client-oriented mode of implementation, the Project's response to lower-than-anticipated adoption rates should be based on the farmers' view of the problems. This implies a socio-economic research effort.

 

Analiz sa-a, ki baze sou enfòmasyon disponib ak sou kèk sipozisyon, montre ranp vivan lesena itilize kòm manje bèt ou byen pou angrese tè kapab trè enteresan pou anpil agrikiltè ayisyen. Analiz la konsidere diferans lajan ki envesti ak lajan ki rapòte lè yo konpare fason yo itilize tè-a kounye-a (san ranp vivan) ak lòt fason yo ta ka itilize tè-a (ak ranp vivan ki sèvi kòm manje bèt ou byen pou angrese tè-a pou bay plis randman). Lè yo kalkile benefis ranp vivan itilize kòm manje bèt bay, sa yo rele nan ekonomi to randman entèn (an franse "taux de rendement interne"; an angle "Internal Rates of Return: IRR"), li plis pase 80%. Sa ki esplike benefis sa-a se manje bèt ranp vivan-an bay. Lè ranp vivan finn enstale sou tè-a, bèt ki manje fouray ki soti nan ranp vivan sa yo rapòte 40 pousan plis kòb e aktivite sa-a mande mwens travay pase lè agrikiltè-a plante kilti tankou mayi ak pwa. To randman entèn jaden ranp vivan itilize pou agrese tè plis pase 75%. Rezon ki esplike benefis sa-a, se rekòt yo ki vin ogmante e ki vin pi regilye akòz fèy ranp vivan yo ki angrese tè-a. Nan analiz sa-a gen yon seri tès yo fè pou wè si done yo byen chita. Tès yo montre chif yo jwenn pou ranp vivan itilize kòm manje bèt ase solid. Yo jwenn to randman entèn ki pi ba yo (jiska 22%) lè yo diminye vitès pou enstale ranp vivan yo de 5 mèt a 1 mèt nan inè de tan. Lè yo desann randman fouray ranp vivan-an a yon ka (1/4) de sa li ta sipoze bay, to randman entèn nan diminye a 29%. Li desann tou lè yo redwi a mwatye kantite bèt ki pwodwi pou chak tòn fouray ranp vivan-an bay. Nan tout lòt tès yo, to randman entèn nan rete pi wo pase 30% - majorite chif yo pi wo pase 50%. Konklizyon ak Rekomandasyon Dapre rezilta sa yo, nou ta atann agrikiltè yo ta trè enterese adopte ranp vivan pou sèvi ak biomas yo (fèy ak branch ranp vivan yo) ou byen kòm manje bèt ou byen pou angrese tè pou bay pi bon rekòt. Si sa pa ta fèt sa vle di agrikiltè yo ak pwojè-a pa konprann teknik ranp vivan-an menm jan. Nan ka sa-a, nou ta dwe mande tèt nou si fason nou konprann randman (pwodiktivite) ranp vivan-an kòrèk. Sa sipoze you efò pou chèche verifye sipozisyon ki pèmèt nou fè analiz la. Rezilta analiz pou kontwole si done yo solid ta dwe baze sou rasanble done teknik sou itilizasyon ranp vivan kòm manje bèt. Sa vle di chèche konnen sitou sa bèt la pwodwi pou chak tòn manje sèk ki soti nan ranp vivan-an, kantite fèy ak branch ranp vivan-an ka bay, ak tan pou enstale ranp yo. Pou byen konprann itilizasyon ranp vivan pou angrese tè-a, li mande pou verifye sipozisyon ki fèt nan analiz la pou tabli diferans randman jaden ki gen ranp vivan ak jaden ki pa genyen ranp vivan. Answit, nou dwe konprann jan agrikiltè-a wè kesyon-an. Pou pwojè-a kapab efikas e kòm apwòch li baze sou sa kliyan-an vle, yo ta dwe konsidere sa agrikiltè-a panse. Si to adopsyon yo pi ba pase sa yo atann, repons pwojè-a ta dwe baze sou fason agrikiltè-a wè pwoblèm yo. Sa ta mande yon rechèch sosyo-ekonomik.