Plans for farms using supplemental irrigation in the proposed South Saskatchewan River irrigation project
Date
1965
Authors
Journal Title
Journal ISSN
Volume Title
Publisher
ORCID
Type
Degree Level
Masters
Abstract
The overall objective of this study was to develop profit-maximizing
plans for farms using supplemental irrigation in the initial phase
of the proposed South Saskatchewan River Irrigation Project. The optimum
farm organization for any particular farm depends on the quantity and
quality of the resources available, the efficiency with which these resources
can be combined and the prices obtained for the resultant products.
This study attempted to develop optimum plans for a one-section
farm under various resource supply, production efficiency and price situations.
The variable resource programming procedure was used to derive
these plans. With this procedure the supply of a scarce resource can be
varied from zero to an unlimiting amount and the optimum plans commensurate
with all levels of the variable resource can be obtained. By
allowing irrigation capital to vary the optimum plans were derived for
various combinations of irrigated and dryland farming on a one-section farm.
The primary source of data for this study was the Irrigation Budget
Standards developed by the Department of Agricultural Economics of the
University of Saskatchewan and the Conservation and Development Branch
of the Saskatchewan Department of Agriculture. Other sources included
the Department of Animal Science and various research bulletins.
In total eleven one-resource variable programs and one two-resource
variable program were carried out. All of these were based on a
one-section dryland farm which had a machine and building complement adequate
for that size of dryland unit, no livestock or livestock facilities,
and a labor supply of one full-time operator and a small amount of family labor. In an attempt to assess the effect of irrigation development and
livestock production on the optimum farm organization provisions were made
in the model for borrowing livestock development capital, irrigation development
capital and additional operating funds. Other resources made
available to the farm were seasonal supplies of hired labor, limited
amounts of community pasture and off-farm hay and feed grain. The production
alternatives included in the model allowed various combinations of these resources. Subsequent programs dealt with different labor supplies, production alternatives, production efficiencies and price ratios.
Programs 2 and 3 excluded family labor and hired labor, respectively,
from the situation posed in program 1. Program 4 was the same as program
1 except that the hay buying and selling alternatives were excluded. In
programs 5, 6, and 7, the hog activities were eliminated from the situations
posed in programs 1, 2, and 3, respectively. The effect of higher labor
efficiency in livestock production on the optimum farm organization of
program 1 was examined in program 8. Livestock feed efficiencies were
reduced in program 9. The effects on farm organization of higher grain
to livestock price ratios in situations with and without hogs were examined
in programs 10 and 11.
The results of the programs which dealt with different labor
supply situations showed that without extra labor during key periods
farmers would gain little from irrigation development. This was especially
true in those programs in which hogs were included as a production
alternative.
The effect which irrigation will have on farm organization, income,
labor use and investment will depend to a considerable extent on the policy adpopted with regard to operation and maintenance (0 and M) rates. When
0 and M was charged as a fixed cost per irrigable acre income differences
between the dryland and final irrigated plans were larger and more acres
were irrigated but net farm income was lower than when 0 and M was charged
on the basis of acreage actually irrigated.
In the situations programmed in this study, hog production acted
as a substitute for irrigation development. The main effects of eliminating
hogs were (1) reduced income, (2) larger irrigated acreages, and
(3) larger changes in income due to irrigation development.
The availability of capital will have important effects on the
extent and profitability of irrigation development. Availability of
capital for irrigation development alone will not guarantee profitable
irrigation development. Funds will also have to be available to expand
those enterprises which are complementary with respect to irrigation development.
The two-resource variable solution indicated that the marginal
value product of irrigation capital was low at low levels of operating
capital. The irrigated cropping system at these low levels of operating
capital was devoted entirely to the most extensive cropping system
allowed in the program.
The variable resource programming procedure seems well adapted to
the type of analysis done in this study. This technique combined with
modern electronic computers enables the researcher to generate considerable
information about the effects of variations in the level of one or
more resources. The technique does, however, have some important limitations
which must be kept in mind when it is being used. One of the
most severe limitations arises from the fact that coefficients for a particular
activity are often valid over small ranges in the level of that
activity. Interpretation of results must, therefore, proceed with caution
when activity levels are inconsistent with the coefficients used.
Description
Keywords
Citation
Degree
Master of Science (M.Sc.)
Department
Agricultural Economics
Program
Agricultural Economics