Profitability of Black Plastic Mulch for Limited Resource Farmers

Farmers and policymakers have recognized the need for alternative technologies for reducing costs and increasing profit for limited resource farmers. Plastic mulch has been evaluated as an alternative technology on experimental stations in the Southeast but its use has not yet gained wide acceptance among limited resource vegetable producers in the area. In this study, the economic feasibility of plastic mulch was evaluated as a profit enhancing technology for limited resource farmers. A farmer survey and farm simulation model were used in the evaluation of this technology. It was noted in the survey that most of the farmers in the research area were part-time and were above 50 years old. The average age was 60, with a minimum of 29 and maximum of 88. Plastic mulch resulted in increased output and farm revenue. The capital turnover ratio for production with plastic mulch was higher than for production without plastic mulch. Each hour of labor used with plastic mulch generated six times more net revenues than without plastic mulch. The total investment required for plastic mulch more than doubled, indicating that it might be difficult to encourage this age group of farmers to adopt the technology without easy credit arrangements. The diffusion of this technology may be difficult unless the alternative of renting vs. buying the necessary equipment is presented to this age group of farmers. Research QuestionAlternative technologies designed for limited resource farmers have been successfully evaluated on experiment stations, but have resulted in increased per acre total costs under farmers' conditions, even if per unit cost of production was lowered. These technologies usually require initial investments that are beyond the means of the intended users, even though the returns to investment are sufficiently competitive. Most limited resource farmers have almost no access to financial markets and are unable to acquire the required capital to purchase these technologies. In this study, plastic mulch is evaluated as an alternative technology for limited resource farmers. The effects of plastic mulch on investment costs and farm income are analyzed. Literature SummaryPlastic mulch has been tested on research stations in Alabama and other southern states, but its effectiveness in increasing farm profits is yet to be evaluated. Plasticulture involves the use of plastic mulch for controlling weeds, conserving moisture, and increasing soil temperatures. The use of plastic mulch has also produced a cleaner and higher quality hit. It has been shown that black plastic mulch increased vegetable yields up to threefold for watermelons. Use of plastic mulch has been observed to promote early crop development (up to 4 wk earlier). For southern farmers,this means an early market price which can be 50 to 100% above the average seasonal market price. Study DescriptionForty vegetable farmers from 14 counties in east-central Alabama, within a 90 mile radius of Auburn University Experimental Station, were surveyed in the Fall of 1990. Information on their farm and family characteristics, cultural practices, farm income, and market outlet for vegetables was solicited. Farmers' willingness to participate in on-farm, farmer managed trials was noted. Eight of the 40 farmers were selected to participate in on-farm trials. Farmers were monitored during the Spring of 1992. The data collected from farmers' fields were supplemented by data from the Auburn and Tuskegee University Experimental Stations. The farm simulation models were designed to evaluate the profitability of plastic mulch under actual farm conditions. The average age of all farmers was 60, with a minimum age of 29 and a maximum age of 88. Farmers over the age of 65 made up 49.2% of those interviewed, and only 7.7% were less than 35 years of age. Most of the farms were family operated, and 87.2% had no full-time employees. All farmers considered their farm operation commercial. Commercial small-scale farmers made up to 14% of all farmers interviewed, and 17% of those classified as small scale had pick and pay operations. About 33.3% of the operators were part-time, and 64.1% full time. Farm sizes varied from 1 to about 1000 acres and vegetable farms ranging in size from less than 1 to 300 acres. Only 41% of the farms were over 10 acres and 38.5% had less than 5 acres. The linear programming results show that the use of plastic was very profitable, but the investment cost was exorbitant for resource poor farmers. Without plastic mulch the 5 acre sample farm generated gross income of $17 050, requiring 4409 h of family labor and 115 h of hired labor. With the use of plastic mulch, all 5 acres of land were placed in production, requiring 3141 h of family labor and total investment of $27 738, resulting in a capital turnover of 1.42. The use of plastic mulch also generated higher returns to labor than not using plastic mulch. Partial budget analyses showed that the use of plastic mulch produced net economic benefits above that of no plastic mulch. Applied QuestionsIs plastic mulch an appropriate technology for limited resource farmers? The linear programming results showed that the use of plastic generated higher gross and net revenues, but had higher capital cost requirements. The total costs with plastic mulch almost doubled that without plastic mulch. This result means that limited resource farmers without access to credit are unable to use this technology. In spite of the high capital requirements, the benefit to cost ratio improved considerably from no mulch to plastic mulch. This situation must be noted by researchers and extension agents who encourage the use of plastic mulch, since most of the vegetable farmers in the area are 60 years or more and may have less desire for money and are unwilling to accept credit. Is plastic mulch a profitable alternative technology for limited resource farmers? The use of plastic mulch has resulted in additional income to farmers. The net benefit cost index was 0.20. This means that the net benefits over cost will increase by 20% with the use of plastic mulch for a similar farm. Is the use of plastic mulch susceptible to changes in economic conditions? The use of plastic mulch was still profitable with slight decreases in prices and increases in costs. The use of plastic mulch was still beneficial when prices were reduced by 20% and costs increased by 20%.