Prepared by Clyde R. Weathers, Extension Farm Management Specialist Published by THE NORTH CAROLINA AGRICULTURAL EXTENSION SERVICE North Carolina Stat

Transcription

1 Summary of the Farmers Pest Management Services Project in Chowan, Perquimans and Pasquotank Counties north carolina AGRICULTURAL EXTENSION SERVICE

2 Prepared by Clyde R. Weathers, Extension Farm Management Specialist Published by THE NORTH CAROLINA AGRICULTURAL EXTENSION SERVICE North Carolina State University at Raleigh, North Carolina Agricultural and Technical State University at Greensboro. and the U. S. Department of Agriculture. Cooperating. State University Station. Raleigh, N. 0.. T. C. Blalock, Director. Distributed in furtherance of the Acts of Congress of May 8 and June The North Carolina Agricultural Extension Service offers its programs to all eligible persons regardless of race, color, or national origin, and is an equal opportunity employer. 12/81/1M AG-280

3 Summary of the Farmers Pest Management Services Project in Chowan, Perquimans and Pasquotank Counties, Introduction Funds from the Coastal Plains Regional Commission made it possible to conduct an intensive integrated pest management program in Chowan, Perquimans and Pasquotank Counties in The Farmers' Pest Management Service Project is the first effort in North Carolina to evaluate the economics of integrated pest management services. The objectives of the Fanners' Pest Management Service were to: (1) provide pest management services to participating growers (including weed, nematode and disease surveys, soil sampling, postemergence weed scouting, insect scouting, and general pest management recommendations for all major crops); (2) assist participants in developing a business organization to provide these services; and (3) evaluate the economics of the pest management services and the potential of a business organization to provide these services. Farmers Pest Management Service Cooperative A key group of IPM participants, Extension personnel and a cooperative specialist from the N. C. Department of Agriculture were instrumental in establishing the Farmers Pest Management Services Cooperative, Inc. Meetings were held in which the cooperative form of business structure was evaluated and the necessary steps were taken to establish the cooperative. Mr. Pete Lane, N. C. Department of Agriculture, worked closely with the incorporators of the cooperative while drawing up the charter and by laws, filing necessary forms and paying fees. Mr. Roy Schaal, Cooperative Consultant with the N. C. Rural Development Fund for Development, assisted the cooperative in capitalizing the cooperative, issuing shares of stock, setting up the cooperative's financial records and preparing and filing the required federal and North Carolina tax returns. Few members of the newly formed cooperative had experience in functioning as officers and members of the Board of Directors. Mr. Lane attended the organizational meeting and guided the Directors through the formal process required to elect officers, take minutes and conduct all necessary business required to initiate cooperative business. The N. C. Agricultural Extension Service IPM agent was appointed as cooperative manager with responsibilities for hiring scouts and supervising the field program on individual farms. Fee schedules were established on a per acre basis for each scouted crop. A close liaison was established between the manager and N. C. State University to facilitate payment of wages, travel expenses, etc. from Coastal Plain Regional Commission funds and supporting funds from N. C. Agricultural Extension Service. Fees required to process farm business records were paid from these two funding sources. Scouting fees were collected from producers at the end of the scouting season. During the first year, 1979, 5,480 acres were in the program, and 5,562 acres were included in 1980.

4 With the tennination of funding from the Coastal Plain Regional Commission and the scaling back of support from the N. C. Agricultural Extension Service, some basic changes were made in organizational operation. The cooperative expanded to over 9,000 acres and added growers in 4 additional counties in Acreage scouting fees were increased to place the cooperative on a nearly selfsufficient basis. Scouts were paid on a per acre basis rather than an hourly basis. This simplified adhering to the expected cash flow. Fees were collected quarterly from producers to provide the required cash flow to pay the manager's salary and other operational expenses. The manager remains a joint employee of the cooperative and the Extension Service. The Board of Directors has worked closely with the manager in project evaluation and operation. Since the Board members are active farmers, the manager has had to assume a major role in assuring that the required meetings and all other necessary business transactions are performed on thne and in compliance with legal and tax regulations. Experience with this cooperative suggests that expert help is required to evaluate alternative organizational forms and to implement the plan. Careful financial planning is required for the start-up years. The cooperative must be adequately capitalized, and a plan for financial self-sufficiency must be developed when the start up period is over. Board members need to be trained in conducting meetings and the affairs of the cooperative. A key element in this training is financial planning. Fortunately, resources are available for these purposes. Objective of this Report This report deals mainly with the first part of objective number three of the overall 1PM program. An effort was made to measure the economic effective ness of having pest management services available. It was realized from the outset that an 1PM program's effect can be from several factors. It can increase net income through larger yields, lower costs, better crop rotations, or reduced insect, disease and certain weed problems. This study measured only the yield and cost outputs in determining net incomes involved. Two years are not long enough to provide rotation recommendations for the control of diseases such as southern pod rot in peanuts. Standardized costs and prices were used in this study while trying to isolate the effect of having fields scouted and pest management recommendations made to participants in the program. Program Participants Forty farmers in the original three county area enrolled in the electronic farm business records program prior to the initiation of the integrated pest management study. All ferty of these were given an opportunity to participate in the pest management program.

5 A total of 17 of the original 40 farmers maintained records and stayed on the Integrated Pest Management Program during Eleven of these fanners were participants and the other 6 served as a control group. Each group kept the same type of financial and physical records. The only difference was that the 11 participants had all of their crop acreage scouted.by the Farmers' Pest anagement Service and received reports on pests found and their intensity. The 11 participants in 1979 had a total of 1705 acres of corn, 1354 acres of soybeans and 596 acres of peanuts. The 6 farmers in the control group in 1979 produced 830 acres of corn, 748 acres of soybeans, and 247 acres of peanuts. Sixteen of the original farmers stayed on the program in There were 11 participants and.5 in the control group in The 11 participants in 1980 had 1702 acres of corn, 1445 acres of soybeans and 457 acres of peanuts. The 5 fanners in the control group in 1980 had 852 acres of corn, 843 acres of soybeans and 263 acres of peanuts. Farmers who participated in the program did not represent a random sample. However, an effort was made to select farmers for the study who were represen tative of the area. No preference was shown in selecting farmers as partici pants or as members of the control group. Records Maintained Accurate financial records as well as physical data were maintained by all fanners on the program. Physical data included the number of units of all materials used on each crop involved in this summary. Standardized costs for materials (including fertilizer, 1nne, seed and pesticides) were used to eliminate the effect on net income of the individual manager's bargaining power because of size or other factors. Standardized prices were used on all peanuts, corn and soybeans produced. This prevented biasing the effect of the pest management program by allowing some farmers to receive higher prices because of time of selling or by adding some value to the harvested product through drying, further treatment or future pricing. Each farmer kept a record of the number of times each type of machinery or equipment went over the corn, peanut and soybean fields. These records also indicated the number of multiple operations that were performed with a single pass over the field. From these data, machinery variable costs and ownership cost per acre of each of the farmers were computed by crops. Because there was such little variation in machinery costs between the participants and the control group these costs were not included in this summary. Corn Summary Table 1 is a summary of the corn in the Farmers' Pest Management Service project. The average per acre returns over cash expenses are $

6 Table 1. Corn: Comparison of 1979 and 1980 inputs, yields and returns over cash expenses per total acre Participant Group Control Group Average Average Participant Control Units Part.. Part Control Control Seed lbs Lime lbs Nitrogen lbs Phosphorous lbs Potassium. lbs Insect NemJ lbs Liquid Herb. qts Solid Herb. lbs Yield Bu Total Variable Cost $ Returns over Variable Cost $ N0. Acres Acres

7 for the participants compared with $ for the control group. The 16.2 bushel average added yield per acre received by the participants accounts for $52.31 of this $59.10 difference ($ $131.75). The remaining $6.79 is accounted for by the difference in cash expenses ($ $93.43). The control group had higher cash expenses per acre of corn than the participants while receiving a lower yield and subsequently a lower return over cash expenses. According to ASCS records in Chowan, Perquimans and Pasquotank Counties, the average established corn yield for the participants was 3.4 bushels greater than for the control group. The established yields were determined prior to If the participants were expected to have an average yield 3.4 bushels greater than the control group, then their added yield from being on the program was 12.8 bushels rather than This reduces the effect on returns over cash expenses by $10.98 ($3.23 x 3.4 bu.) leaving the participant $48.12 more net income than the control group received. None of the differences fbund in the study were tested for statistical significance. Samples were not random and they were too small in number to be accurately tested. This applies to corn, soybeans and peanuts in the study. Table 1 also shows the physical amounts of inputs used per acre by all corn producers. The control group used more fertilizer per acre of corn than was used by the participants. The participants used more lime and more seed than was used by the control group. These seem to be the major differences in the amounts of inputs used. Seeding rates were not specified in recommendations made by the pest management personnel. HOwever, the 13.7 pounds of seed corn used per acre by the control group is almost 13 percent less than the 15.7 pounds used by the participants. These figures are averages for 1979 and 1980 taken from columns 3 and 6 in Table 1. Soybean Summary Table 2 is a summary of yields, income, expenses and physical inputs for soybeans in the Farmers' Pest Management Services project, The $55.22 increase in average per-acre returns over cash expenses for the participants over the control group for the two years was caused by two factors. These were a higher average yield and lower per-acre cash expenses. Participants had an average soybean yield of bushels per acre compared with bushels per acre for the control group. This 6.48 bushel difference in soybean yield for the two years with an average price of $7.06 per bushel for 1979~l980 accounts for approximately $45.76 of the $55.22 difference. The remaining $9.46 difference was caused by a higher average cash expense per acre of soybeans for the control group than for the participants ($ $51.49). No reliable soybean yield history was available to determine the expected yields for the participants and.the control group. Therefore, no yield adjustment was made for either group. 5

8 Table 2. Soybeans: Comparison of 1979 and 1980 inputs, yields and returns over cash expenses per total acre Participant Group Control Group Average Average Participant Control Units Part. Part Control Control Seed lbs Lime lbs Nitrogen lbs Phosphorous lbs Potassium lbs Insect Nem. qts Liquid Herb. qts Solid Herb. lbs Yield bu Total Variable Cost $ Returns over Variable Cost $ No. Acres acres

9 The most obvious difference in physical inputs for soybeans shown in Table 2 is in the pounds of seed planted per acre. Participants planted pounds per acre while the control group averaged planting pounds per acre in 1979 and Table 2 shows that the control group applied more fertilizer and much more insecticide and nematicide than were used by the participants. The control group used less liquid herbicide but more solid.type than was used by the participants. Peanut Summary Participating peanut producers had lower per acre returns over cash expenses than were received by the control group. Table 3 indicates that the average per acre returns over cash expenses was $ for the control group and $ for the participants in 1979 and The average peanut yield per acre for 1979 and.l980 was 210 pounds greater for the control group than for the articipating fanners. This alone would give the control group approximately more income at 23 cents per pound fer peanuts. However, the per acre cash expenses were higher for the control group than for the participants. This difference amounted to $25.29 ($ $218.21) leaving the control group with a $23.01 higher returns over cash expenses per acre. Subtracting $ from $ (returns over cash expenses in Table 3) gives $ Rounding errors in expenses and yields are believed to account for the $1.53 difference between the $24.54 and $23.01 shown as higher returns over cash expenses for the control group. Average yields per acre of peanuts from 1974 through 1978, showed that the control group's average yield was 336 pounds greater than the participants'. The 5 year average peanut yield was 3277 pounds per acre for the control group and.294l pounds per acre for the participants. This 336 pound difference would have amounted to $77.28 more per acre for the control group. Since the actual net income per acre of peanuts was only $23.01 more for the control group, one might conclude that on the average, the participants were $54.27 per acre better off each of the two years than they would have been without 1PM assistance. Peanut participants used fewer seed, more lnne, less nitrogen and phosphorous and.more potassium per acre than was used.by the control group. Participants also used less insecticide and nematicide than the control group. There seems to be little difference in the overall use of herbicides. Participants used.more liquid herbicides while the control group used more herbicides in solid form.

10 Table 3. Peanuts: Comparison of 1979 and 1980 inputs, yields and returns over cash expenses per total acre Participant Group Control Group Average Average Participant Control Units Part. Part Control Control Seed lbs Lime lbs Nitrogen lbs Phosphorous lbs Potassium lbs Insect-Nem. qts Liquid Herb. qts Solid Herb. lbs Yield lbs Total Variable Cost $ Returns over variable Cost $ No. Acres acres

11 Summary Findings of the two year IPM program for Chowan, Perquimans and Pasquotank Counties indicate that the overall program was a success. valuable experience in establishing and operating a farmer Cooperative Corporation was obtained. Table 4 is a summary of the Coastal Plains IPM program. Results indicate that corn and soybean growing participants in the program realized more net income per acre than did the control group. Participants had less total variable costs per acre in all three crops. Considering established yields fbr corn, on all farms in the program, participants' yields were improved over yields of the control group. Average corn yield.for participants was 12.8 bushels greater than would have been expected according to established corn yields for all farmers on the program. Soybean average yield was 6.48 bushels greater for the participants than for the control group. No established yields were available for soybeans. According to ASCS records, peanut yields averaged 336 more pounds per acre (3277 lbs. over 2941 lbs.) for the control group than for the participants from 1974 through This difference in yield was reduced to an average of 210 pounds in 1979 and 1980 givin participants a $28.98 relative increase in gross income. This added to the lower variable cost per acre accounted for the $54.27 relative gain in net income realized by the participants over the control group. Hopefully the experience gained in this Coastal Plains IPM program will be helpful in establishing, conducting and evaluating similar IPM programs.

12 Table 4. Coastal Plains 1PM Evaluation, Average Soybeans Corn. Peanuts IPM No- IPM IPM No - 1PM IPM No- IPM Yield Pesticide 2/ Expenditures Total variable Costsé/ Non Adjusted Net Retumsg/ Yield-Adjusted Net Retumsé/ E/ l-/bushels per acre for soybeans and corn; pounds per acre for peanuts. Z-/Dollars per acre; net returns are gross returns less total variable costs (pesticides, machinery, fertilizer and seed expenses). é/adjusted IPM corn yield is 84.6 bushels; adjusted No IPM peanut yield is 2,500 pounds. 10

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