An assesment of the financial viability of investing in an animal drawn ripper
Date
2015-10-26
Authors
Hankuku, Choolwe
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Abstract
There are two types of conservation tillage methods commonly used in Zambia-planting basins for hand hoe farmers and ripping for farmers with access to animal draft power and implements. Maize, cotton, soyabean, sunflower and groundnuts are among the major crops grown by the rural households and were hence considered in this study. Ripping requires some investment into the ripper. Purchasing a ripper is an investment in which financial resources are laid out and the resulting benefits flow over the life span of the implement. There is no study that has been done to demonstrate that buying a ripper or plough by smallholder farmers is a profitable investment decision. This study has attempted to carry out an investment analysis to determine if it is financially viable for small holder farmers to buy the ripper or the plough.The study used secondary data from various sources. These data were analyzed using a mixed interger-programming model that was implemented using a c-plex solver in GAMS. Sensitivity analysis was conducted to determine which tillage method gave the optimal profit maximizing returns under various farmer situations.The results from the analysis suggested that the ripper is more profitable than the plough. It was found that it is optimal to grow sunflower and cotton using the ripper. The resultant net present worth of cropping enterprises over the estimated 10-year lifespan of the implement is K 12,804,308. (US $3,201) in the base scenario. The results from analysis further suggested that labor in certain months of the year was constraining. Results of the analysis also show that capital is a constraint to increased production.Since capital is a limiting resource, it is recommended that policy on agricultural credit should be formulated so that viable smallholder farmers can access credit in order to invest in implements like the ripper. It is also recommended that farmers should mechanize there operations with implements like the ripper in order to relax the labor constraint which most of them face.
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Keywords
Animal drawn ripper , Financial vuability