Economic value of diversified cropping systems
By Donna Fleury
What are the risks and tradeoffs of short-term versus long-term cropping systems?
Diversifying crop rotations is recommended for many reasons, including serious crop diseases and herbicide-tolerant weeds that are becoming more prevalent and causing economic losses across Western Canada. Canola growers are encouraged to use a three- or four-year rotation to address such diseases as clubroot and blackleg, while lentil and field pea growers that have fields infected with Aphanomyces disease should use a six- or seven-year rotation to reduce the risk. However, these are highly profitable crops and short-term economics makes shorter rotations tempting.
Researchers are working on developing a decision-making tool that will help producers consider the impact and risk of planned crop rotations on disease pressure, yields and economic returns. Led by the University of Lethbridge with collaborators from the University of Alberta and University of Manitoba, this four-year project will develop a model framework for long-term costs and benefits analysis of short-term versus long-term rotations.
“Crops like pulses and canola are very profitable and producers logically want to grow them as often as possible,” says Elwin Smith, adjunct professor, Department of Economics at the University of Lethbridge. “However, the problem is there are soil-borne diseases in both crops that tend to get worse the more frequently you grow the crop, and higher levels of disease means more damage to yield and lower crop returns. Producers have to decide whether they are willing to give up a bit of current returns to maintain a more profitable rotation over the long-term with less intensive rotations. The intent of the project is to try to provide some tools to help producers evaluate what the economic tradeoffs and net returns would be associated with cropping systems of different rotation length and diversity of crops.”
The project has three components underway in three regions of Western Canada. Smith and colleague Danny Le Roy are the overall project leads, and are also leading a project focused on the Brown and Dark Brown soil zones and cropping systems that include pulse crops, such as peas and lentils, often grown in wheat-based systems of hard red spring and durum. Scott Jeffrey, University of Alberta is looking at the Black and Dark Gray soil zones with cropping systems that include canola, field peas and barley, both malt and feed. Derek Brewin, University of Manitoba is focused on southern Manitoba cropping systems where corn and soybean acres are increasing, but canola remains an important crop.
“All three of the projects are moving forward simultaneously looking at longer-term crop rotations to alleviate the effect of diseases that are not easily managed,” explains Le Roy, associate professor of economics and co-ordinator of the Agricultural Studies program at the University of Lethbridge. “The challenge producers face is the margins for crops such as canola and pulses are large relative to alternative crops. The immediate margin is compelling and lucrative, while the longer-term consequences are discounted because they are seen as a problem at some future time. However, there can be foreseeable unintended consequences with higher returns today, but possibly lower yields in the future due to the buildup of diseases like clubroot and Aphanomyces.”
The model and decision-making tools being developed in the project will help producers determine the risks and economic impacts of the crop rotations they select. Producers will be able to use the model to evaluate and quantify tradeoffs and potential impacts given reasonable distribution of prices, costs of production and other factors. Several sources of data and information were used to develop the model, such as government sources, provincial cropping statistics and crop prices, crop insurance yield data, crop disease severity and impacts from published studies and agronomist experts.
“In the Brown and Dark Brown soil zones, an intense lentil and durum wheat short-term rotation is highly profitable, but at some point, if the field becomes infected with Aphanomyces and yield tapers off, a different cropping system will be important,” Le Roy says. “In contrast, a diversified rotation that might include lentil, hard red spring wheat, canola, durum wheat, chickpeas [and] mustard would be preferable. The model will be able to compare the returns from a longer-term rotation with a shorter sequence of crops. The net present value (NPV) of a short lentil-durum rotation might be more beneficial if the disease isn’t too intense. But, if the disease does get worse, then the NPV of the diversified rotation will be higher. “
“With the modelling approach, we are also trying to evaluate the risk associated with a disease like Aphanomyces that expresses itself in some years, but maybe not so much in others such as in some of the drier areas this year,” Smith adds. “However, when you seed, you don’t really know for sure what the moisture and climate conditions will be. It is a risk decision, and in some years you might get away with shorter rotations, but in others you won’t. There are so many unknowns that it can be hard to make a decision, but with this tool it can help determine the level of risk and guide cropping decisions. This tool might also help pathologists evaluate how disease changes over time and what factors will influence it over time. None of this is easy to solve, but having one more tool like our model can help with decision making for risks and outcomes.”
Researchers have collected much of the background information and are now moving to developing the model and decision-making tool. Le Roy adds it was challenging to collect the information and they are now working on validating the pricing and cost information to make sure it is an appropriate foundation for the model, and choosing rotations that have field credibility and make sense.
“The model is being built based on past price and cost information and past technology, which we know changes over time for individual circumstances, enterprise specifics and new technology,” explains Le Roy. “No one knows what costs or prices or disease levels will be in the future, but given the background body of knowledge, we can predict reasonable patterns in the near term that could impact the profitability of a crop growing enterprise.”
“We first plan to develop the model to include a spreadsheet tool,” Smith says. “This would be something that agronomists or producers could use to assess their cropping system and understand the risks and benefits.”
Le Roy adds, “In the future, an app could be developed to run the model and provide the information. The app would be something simple that can highlight the impact of a given rotation over time and evaluate alternatives – think of it like a Mortgage Wizard that can help you quickly sort through options. Once developed, the spreadsheet tool and the future app will allow producers to add their specific information and adjust alternatives to evaluate what the economic tradeoffs and net returns are for their selections. This tool would need to be accessible and applicable, enabling producers to identify a few reasonable options given the specific problem they have from the constellation of choices available”
This project is co-funded by: Alberta Pulse Growers Commission, Alberta Wheat Commission, Barley and Malting Barley Research Institute, Manitoba Pulse & Soybean Growers, Prairie Oat Growers Association, Saskatchewan Wheat Development Commission, and Western Grains Research Foundation.
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