• TABLE OF CONTENTS
HIDE
 Copyright
 Title Page
 Acknowledgement
 Table of Contents
 Introduction
 The study area
 Method of analysis
 Minimum land requirements
 Summary and conclusions
 Reference
 Appendix






Group Title: Agricultural Economics report 30
Title: Minimum land requirements for specified income levels, lower Sinu River Valley of Colombia
CITATION PAGE IMAGE ZOOMABLE
Full Citation
STANDARD VIEW MARC VIEW
Permanent Link: http://ufdc.ufl.edu/UF00027479/00001
 Material Information
Title: Minimum land requirements for specified income levels, lower Sinu River Valley of Colombia
Physical Description: i, 61 l. : illus. ; 28 cm.
Language: English
Creator: Eddleman, B. R
Meyer, Neil L. ( joint author )
Publisher: Dept. of Agricultural Economics, University of Florida
Place of Publication: Gainesville
Publication Date: 1971
 Subjects
Subject: Farms, Size of -- Colombia -- Sinú Valley   ( lcsh )
Farm income -- Colombia -- Sinú Valley   ( lcsh )
Agriculture -- Economic aspects -- Colombia -- Sinú Valley   ( lcsh )
Genre: statistics   ( marcgt )
non-fiction   ( marcgt )
 Notes
Statement of Responsibility: by B. R. Eddleman and Neil L. Meyer.
General Note: Cover title.
General Note: Based on Meyer's M.S. thesis, University of Florida, 1969.
Funding: Florida Historical Agriculture and Rural Life
General Note: Agricultural economics report - University of Florida ; 28
 Record Information
Bibliographic ID: UF00027479
Volume ID: VID00001
Source Institution: Marston Science Library, George A. Smathers Libraries, University of Florida
Holding Location: Florida Agricultural Experiment Station, Florida Cooperative Extension Service, Florida Department of Agriculture and Consumer Services, and the Engineering and Industrial Experiment Station; Institute for Food and Agricultural Services (IFAS), University of Florida
Rights Management: All rights reserved, Board of Trustees of the University of Florida
Resource Identifier: aleph - 001615809
oclc - 00540736
notis - AHP0250
lccn - 72612047

Table of Contents
    Copyright
        Copyright
    Title Page
        Title
    Acknowledgement
        i
    Table of Contents
        ii
    Introduction
        Page 1
    The study area
        Page 2
        Page 3
        Page 4
    Method of analysis
        Page 5
        Page 6
        Page 7
    Minimum land requirements
        Page 8
        Page 9
        Page 10
        Page 11
        Page 12
        Page 13
        Page 14
        Page 15
        Page 16
        Page 17
        Page 18
        Page 19
        Page 20
        Page 21
        Page 22
        Page 23
        Page 24
        Page 25
        Page 26
        Page 27
        Page 28
        Page 29
    Summary and conclusions
        Page 30
        Page 31
        Page 32
        Page 33
        Page 34
    Reference
        Page 35
    Appendix
        Page 36
        Page 37
        Page 38
        Page 39
        Page 40
        Page 41
        Page 42
        Page 43
        Page 44
        Page 45
        Page 46
        Page 47
        Page 48
        Page 49
        Page 50
        Page 51
        Page 52
        Page 53
        Page 54
        Page 55
        Page 56
        Page 57
        Page 58
        Page 59
        Page 60
        Page 61
Full Text





HISTORIC NOTE


The publications in this collection do
not reflect current scientific knowledge
or recommendations. These texts
represent the historic publishing
record of the Institute for Food and
Agricultural Sciences and should be
used only to trace the historic work of
the Institute and its staff. Current IFAS
research may be found on the
Electronic Data Information Source
(EDIS)

site maintained by the Florida
Cooperative Extension Service.






Copyright 2005, Board of Trustees, University
of Florida




100
' .,September 1971

.|o Minimum Lan(
for Specified


Lower


Ag. Econ. Report 30

d Requirements
Income Levels,


Sinu River Valley of Colombia


1. F.41 Flond
Fli! orid


Department of Agricultural Economics
Center for Tropical Agriculture
Institute of Food and Agricultural Sciences
University of Florida, Gainesville


B. R. Eddleman
Neil L. Meyer


I
1' I II












ACKNOWLEDGMENTS


The authors wish to acknowledge the valuable suggestions offered

by departmental reviewers, R.E.L. Greene, W. W. McPherson and

F. H. Tyner, Jr. We also express our appreciation to Hugh Popenoe,

Director of the Center for Tropical Agriculture, and the Ford Foundation

for financial assistance.

Indispensable technical assistance was provided by the staff mem-

bers of the INCORA Cordoba II Project, in particular Jorge Villamizar,

staff of the ICA Turipana Experiment Station, and other public agencies

in the Department of Cordoba. Special recognition is due Peter Hildebrand

for his counsel and assistance in developing much of the basic informational

requirements of this study.

This report is based upon a M.S. Thesis by Neil L. Meyer, "Minimum

Resource Requirements for Specified Levels of Income on Crop-livestock

Farms in the Sinu River Valley of Colombia," Department of Agricultural

Economics, University of Florida, Gainesville, 1969.

The computer work was done at the University of Florida Computing

Center.












TABLE OF CONTENTS


Page

ACKNOWLEDGMENTS ...... . . . ... i

INTRODUCTION ...... .. . . . . 1

THE STUDY AREA . . . . ... ... 2

METHOD OF ANALYSIS . . .... .. . . .. 5

MINIMUM LAND REQUIREMENTS . . .... .. ...... 8

Effect of Changes in Yields . .... .. .. 8
Implication of Yields for Farm Size Planning Decisions. 14
Area Implications of Yield Variations . ... 20
Effect of Increases in Interest Rates . . ... 22
Effect of Increases in Hired Wage Rates . ... 23
Effect of Reductions in the Price of Cotton . ... 27
Effect of Reductions in the Price of Rice . ... 28

SUMMARY AND CONCLUSIONS . .. . . . 30

Implications for Farm Planning . . ... 33
Implications for Area Planning . . . .. 33

REFERENCES . .... . . . . 35

APPENDIX . .. .. . . . . . 36















MINIMUM LAND REQUIREMENTS FOR SPECIFIED INCOME LEVELS,
LOWER SINU RIVER VALLEY OF COLOMBIA

**
B. R. Eddleman and Neil L. Meyer


INTRODUCTION

Policy makers concerned with planning for agricultural development

continually need information that can be useful in planning farm size

and in evaluating returns from alternative enterprise and production

practices on farms. They must frequently re-evaluate their plans when

technologic and economic conditions change. This publication provides

information that can be useful in evaluating profitability of farm or-

ganizations and changes in these farm organizations in the lower Sinu

River Valley of Colombia. Although not directly applicable to all farms

in the area, the information on enterprise budgets contained in the ap-

pendix is presented in such a manner that adjustments in input-output

data (yields, prices, etc.) can readily be made and the estimates applied

to a specific situation.

The purpose of this study is to ascertain for the Cordoba II Project

in the lower Sinu River Valley area the minimum land requirements and op-

timal enterprise combinations necessary to produce a net farm income of

15,000 pesos and 25,000 pesos with specified yields, land quality, prices




Associate Professor of Agricultural Economics and Associate Agri-
cultural Economist, Florida Agricultural Experiment Stations, University
of Florida.
**Formerly, Research Assistant, Department of Agricultural Economics,
University of Florida.










of cotton and rice, and costs of capital and hired labor, when land

prices and operator equity are at a specified level; and to estimate the

total number of farms that the project area could support if all farms

were developed as units with the necessary minimum size.


THE STUDY AREA

The Department of Cordoba is located in the northwestern part of

Colombia and is part of the Caribbean Coastal Plain. The northwestern

part of the Department constitutes the lower Sinu River Valley flood

plain.

The Department is bordered on the west by the Gulf of Turbo, on the

southwest by the Abide Ridge, on the east by the Ayapel Ridge, and on

the north by the Caribbean Sea. The San Jeronimo Ridge divides the De-

partment with the San Jorge River Valley to the east and the Sinu River

Valley to the west.

The lower Sinu Valley, where the Cordoba II project is located, is

between the Abide and San Jeronimo Ridges. The Valley has a width of

approximately 18 kilometers and has an elevation of about 15 meters above

sea level [1, p. 3]. It is a typical alluvial plain, slightly sloping

away from the Sinu River toward the east and toward the Betanci Ravine.

Before drainage work began, at least 60 percent of the area flooded at

least once a year [1, p. 11. This flooding brought accompanying sedi-

mentation which formed high fertility soils appropriate for various trop-

ical cultures. These lands have produced the lush green forage which,

in turn, provides a basis for the prominent livestock industry of the area.

The valley is level but, because of sedimentation along the river

bank, there is a very gentle slope away from the river. This is the

reason a large part of the valley is flooded during the wet (winter)










season. The area has a large variety of poorly drained soils located

over fine or medium grain sand. The surface soils consist of fine silt

or clay, especially in the zones subject to flooding. The land in the

project area has less than a 3 percent slope [2, p. 3].

The total project area of 70,000 hectares is bounded on the west by

the Sinu River, on the south by Monteria, on the southeast and east by

the San Jeronimo collector canal, and on the north by the Cienaga Grande

(Figure 1). This study refers to the drainage aspects of the 7,000

hectares that comprise the first phase; it also has wider implications

for the total project and other similar areas.

The soils in the project area have textures that vary generally from

medium-light to heavy, with medium subsoils occasionally interspersed

with total horizons of heavy soils. The permeability is moderately

rapid in the light and medium textured soils to very slow in the heavy

textured soils. The average pH is slightly above 7.0 with the exchange

capacity varying from medium to high, depending on the clay content of

the soil.

The region alternates between two contrasting rainfall patterns. In

the dry months, December through March, rainfall ranges from 10.4 mm. to

36.9 mm. per month, with an average of 23.0 mm. During the high rainfall

period, April through November, the monthly precipitation varies from

91.8 mm. to 169.1 mm. per month, with an average of 124.3 mm. The annual

average rainfall is 1201.7 mm., with a range from 867.5 mm. to 1620.5 mm.,

based on 13 years of records from the Turipana Experiment Station. A

study of the rainfall pattern affords a clearer picture of the water dis-

tribution problem. Because it is a tropical area, great amounts of rain-

fall are not uncommon; in a single month, as much as 350 mm. has been known






















4,'' '''"


\--


PROYECTO COPDOA NQ 2

PLAN GENERAL DE OBRA

ADECUACION DE 70,000 Hos.


CONVENCIONES


Cotnd Colector y ODque --

Conol Principal Drenojo .


Escolo I 200000


Source: INCORA (Memo), Moiteria.


CC CSAR~OLLO


Figure l.--Project map of Cordoba II


C n-. G-rc'nd


I--










to fall, which is over 25 percent of the average annual rainfall [1, p. 5].

The area has been mainly a livestock producing area because of the

low elevation, long wet season, and the periodic flooding of the Valley.

In the flood free and the newly drained areas, many crops are presently

grown; more significant, however, is the fact that more crops can be

grown commercially.

The annual average temperature of the lower Sinu Valley is 27.50 C.,

with an average maximum of 34.00 C. and an average minimum of 22.00 C.

[3, p. 35]. Throughout the wet (winter) season, the humidity is in ex-

cess of 80 percent. Several months during the dry (summer) period, winds

blow from the northeast causing the temperature and humidity to drop

slightly. Normally in this area there is a brief secondary dry season

in July or August called the Veranillo de San Juan, permitting harvesting

and replanting when a double cropping system is employed.


METHOD OF ANALYSIS

In this analysis net farm income is defined as gross farm income

less costs of all inputsexcept owned land, operator and family labor, and

management. The income may represent a return to operator and family

labor only, or to labor plus other owned resources. The only restriction

was that the nonlabor-owned resource returns must come from the farm

business. The hectares required to produce a specified net farm income

is dependent upon the quality of the land, the cost of inputs, prices

obtained for commodities sold, the weather, and quality of management.

These factors are taken into account, either through enterprise budgets

or through programming procedures.

Crop enterprises considered in the analysis were cotton, rice, corn,

grain sorghum, soybeans, and sesame. Forage enterprises were Para pasture










production under traditional, improved and most modern production prac-

tices and the livestock enterprises were beef cattle with cow-calf pro-

duction and beef fattening activities. Limited information on production

practices for other livestock and poultry precluded their consideration

as possible enterprises.

Enterprise budgets and equipment needs were developed by the authors

in cooperation with personnel of the Turipana Agricultural Experiment

Station of the Instituto Colombiano Agropecuario (ICA) and agricultural

technicians of the Instituto Colombiano de la Reforma Agraria (INCORA).

The level of technology assumed in the development of the budgets is

usually referred to as "recommended practices" under conditions of labor

intensive and mechanized production practices (Appendix Tables 1 through

12). Soil type was divided into four productivity classes; the criteria

for classification including texture and internal drainage, but empha-

sizing economic differences (Appendix Table 13). Yield levels for the

various crop and pasture alternatives on each land class were specifically

related to the productive capacities of particular soils. A representa-

tive hectare of land was assumed to be a variable resource that could be

added in completely divisible and homogenous units. The quality of land

was assumed to be average and was defined as a representative hectare

composed of 54 percent Class I, 7 percent Class II, 25 percent Class III,

and 14 percent Class IV soil.

Land values and estimated cost per hectare of owning land were assumed

to vary with the percentage of each productivity class of soil comprising

the representative hectare of average quality land (Appendix Table 14).

Under certain conditions yields of crop and livestock enterprises

were assumed to vary and shift the production function. Different yield










levels may be attributed to management, technology, weather, or other

causes. The yield levels used were defined as follows:

(a) Average yields are those of all crops, forages or livestock
expected for the area based on current or improved production
practices recommended by the ICA Turipana Experiment Station
on land having adequate surface water drainage facilities.

(b) High yields are those for all crops, forages or livestock that
are 10 percent above average expected yields for the area and
are based on potentially new production practices for the area,
and/or the best weather (rainfall and drainage) conditions.

(c) Low yields are those for all crops, forages or livestock that
are 10 percent below average expected yields for the area.

It was estimated from an area survey that each farm operator could

work up to 282 days each year (Appendix Table 15). Family labor other

than the operator's could provide an additional 294 man days each year.

The available annual labor was divided into time periods reflecting the

seasonality of farm labor requirements. It was assumed that because of

the high rate of unemployment (currently about 30 percent) and the under-

employment in the area, seasonal hired labor would be available as needed.

The major product and factor prices used were approximate current

prices received and paid in the area and are not to be interpreted as

predictions or forecasts of prospective prices for any future period.

Prices received for crops are 2-year averages based on actual prices re-

ceived by farmers in the area during 1968-69. Livestock prices are 2-year

averages based on the fat cattle market in Medellin for 1968-69. The local

feeder cattle price was obtained from interviews with area producers and

livestock specialists. Prices paid were obtained from local suppliers and

are based on cash sales.

Capital was not considered a limiting factor since the loan limits

set by INCORA exceeded the capital requirements for the programmed farm

situations. As long as returns to capital for the firm were greater than










or equal to the cost, capital could be borrowed in variable units. The

basic capital charges were 9 percent annually for crop and livestock

operating capital, 11 percent for farm machinery and equipment capital,

and 4 percent for land capital. Operators entering INCORA programs

generally have no capital. In these zero equity situations, they must

pay full interest charges for all operating and land capital. Therefore,

in the analysis, the return to land was considered rent to be paid to

INCORA.

Linear programming procedures were used to calculate the minimum

land requirements for a net farm income of 15,000 pesos and 25,000 pesos

for a zero equity situation, three yield levels and an average land

quality situation. Additionally, for average yields on average quality

land four levels of interest charges on capital, four hired labor prices,

four levels of cotton prices, and four levels of prices for rice were

programmed to show the effects of changes in these important variables.

For each programmed situation the total size of the unit necessary to

fully utilize a tractor and machinery complement and the number of indi-

vidual families making up the commercial unit were determined.


MINIMUM LAND REQUIREMENTS

The amount of land required to produce a specified farm income varies

with changes in the yield level, prices of inputs and outputs, and the

combinations and type of enterprises considered.

Effects of Changes in Yields

Minimum land requirements and optimal farm organizations were devel-

oped with yields held at three different levels and prices for production

factors and products held at their average expected levels for each of

the two different net farm income situations. The results are shown in










Tables to 3, and are based upon the assumptions that the operator has

no equity in the land and that he is required to pay an annual land cost

of 755 pesos per hectare.

With average quality land and high crop and livestock yields, 3.1

hectares of open land are needed to produce a net farm income of 15,000

pesos and 5.6 hectares are needed to produce a net farm income of 25,000

pesos (Table 1). When yields are 10 percent below the average expected

level (low yields), 5.3 hectares of open land are required to net 15,000

pesos of farm income and 9.9 hectares are required to produce 25,000 pesos

of net farm income (Table 3). Thus with average quality land, a 10 per-

cent increase in yields decreases the number of hectares required for

both specified net farm income levels by about 20 percent. A 10 percent

decrease in yields increases the land requirements by about 36 percent for

a 15,000 peso income and by about 40 percent for a 25,000 peso income.

Partially mechanized cotton came into the optimal farm organizations

for each of the three yield levels and both specified net farm income

levels. Other important crop enterprises were mechanized rice and par-

tially mechanized rice. A small unit of the cow-calf enterprise entered

each of the optimal farm organizations as well as a few purchased fattening

bulls. The number of fattening animals varied from 1.5 bulls with high

yields on a family farm unit producing 15,000 pesos of net income to 3.4

bulls with average and low yield levels on a family unit providing 25,000

pesos of net farm income.

The capital investment required for these farm organizations varies

from a low of about 54,400 pesos to just over 92,500 pesos on the farms

producing 15,000 pesos of net income. On farms producing 25,000 pesos

of net income, total capital investment varies from 97,900 pesos to 172,500










Table l.--Minimum land required to produce a net farm income of 15,000
pesos and 25,000 pesos with high yields on average quality
land, Cordoba II Project, Lower Sinu River Valley of Colombia

15,000 peso 25,000 peso
net income net income
Family Commercial Family Commercial
unit (19 families) unit (10 families)
- - Hectares - - -

Land use
Cotton (partially mechanized) 1.9 36.1 3.4 34.0
Rice (mechanized) 0 0 1.0 10.0
Rice (partially mechanized) .8 15.2 .4 4.0
Para pasture (best managed) .4 7.6 .8 8.0
Total land 3.1 58.9 5.6 56.0
- - Number - -- -
Livestock
Beef cows (best managed) .3 6.0 .5 5.0
Purchased fattening bulls 1.5 28.0 2.7 27.0
- - Man days - - -
Labor
Operator and family 263.2 5,001 286.0 2,860
Hired 0 0 57.3 573
Total labor 263.2 5,001 343.3 3,433
- - Pesos - - -
Capital investment
Land 52,235 992,465 94,360 943,600
Other 2,206 41,914 3,543 35,430
Total investment 54,441 1,034,379 97,903 979,030


Total operating capital 14,703 279,357 28,076 280,760


Total income 29,370 558,030 52,596 525,960

Crop operating expenses 8,102 153,938 15,392 153,920
Pasture and beef operating
expenses 3,291 62,529 5,894 58,940
Annual interest on operating cap. 636 12,084 1,222 12,220
Hired labor expenses 0 0 860 8,600
Returns to land 2,341 44,479 4,228 42,280
- - Hours - - -
Power and machinery requirements
Period I (Jan.-Feb.) 4.3 81 7.6 76
Period II (March-June) 1.9 36 3.4 34
Period III (July-Sept.) 19.2 365 36.2 362
Period IV (Oct.-Dec.) 3.5 66 5.4 54











Table 2.--Minimum land required to produce a net farm income of 15,000
pesos and 25,000 pesos with average yields on average quality
land, Cordoba II Project, Lower Sinu River Valley of Colombia

15,000 peso 25,000 peso
net income net income
Item Family Commercial Family Commercial
unit (15 families) unit (7 families)
- - Hectares - -

Land use
Cotton (partially mechanized) 2.4 36.0 4.3 30.1
Rice (mechanized) .3 4.5 1.7 11.9
Rice (partially mechanized) .7 10.5 .1 .7
Para pasture (best managed) .5 7.5 1.0 7.0
Total land 3.9 58.5 7.1 49.7
-- -- Number - -
Livestock
Beef cows (best managed) .4 6.0 .7 5.0
Purchased fattening bulls 1.9 28.0 3.4 24.0
- - Man days - -- --
Labor
Operator and family 282.5 4,238 289.0 2,023
Hired 8.7 130 102.0 714
Total labor 291.2 4,368 391.0 2,737
- - Pesos - --
Capital investment
Land 65,715 985,725 119,635 837,445
Other 2,891 43,365 5,157 36,099
Total investment 68,606 1,029,090 124,792 873,544


Total operating capital 18,778 281,685 36,611 256,277


Total income 33,389 500,835 61,057 427,399

Crop operating expenses 10,393 155,895 19,981 139,867
Pasture and beef operating
expenses 4,116 61,740 7,527 52,689
Annual interest on operating cap. 806 12,090 1,659 11,613
Hired labor expenses 130 1,950 1,530 10,710
Returns to land 2,944 44,160 5,360 37,520
- - Hours - - -
Power and machinery requirements
Period I (Jan.-Feb.) 5.4 81 9.7 68
Period II (March-June) 2.4 36 4.3 30
Period III (July-Sept.) 24.8 372 46.8 328
Period IV (Oct.-Dec.) 4.2 63 6.6 46











Table 3.--Minimum land required to produce a net farm income of 15,000
pesos and 25,000 pesos with low yields on average quality
land, Cordoba II Project, Lower Sinu River Valley of Colombia

15,000 peso 25,000 peso
net income net income
Family Commercial Family Commercial
unit (10 families) unit (7 families)
- - Hectares - -

Land use
Cotton (partially mechanized) 3.2 32.0 6.0 42.0
Rice (mechanized) .9 9.0 2.5 17.5
Rice (partially mechanized) .4 4.0 0 0
Para pasture (improved manage.) .8 8.0 1.4 9.8
Total land 5.3 53.0 9.9 69.3
- -- Number - -- -
Livestock
Beef cows (best managed) .4 4.0 .7 5.0
Purchased fattening bulls 1.8 18.0 3.4 24.0
- - Man days - -
Labor
Operator and family 285.0 2,850 298.8 2,092
Hired 48.1 481 225.3 1,577
Total 333.1 3,331 524.1 3,669
- - Pesos - -
Capital investment
Land 89,305 893,050 166,815 1,167,705
Other 3,220 32,200 5,724 40,068
Total investment 92,525 925,250 172,539 1,207,773


Total operating capital 23,538 235,380 46,495 325,465


Total income 39,200 392,000 72,938 510,566

Crop operating expenses 14,562 145,620 27,756 194,292
Pasture and beef operating
expenses 3,834 38,340 7,134 49,938
Annual interest on operating cap. 1,080 10,800 2,193 15,351
Hired labor expenses 722 7,220 3,380 23,660
Returns to land 4,002 40,020 7,475 52,325
- - Hours - -
Power and machinery requirements
Period I (Jan.-Feb.) 7.2 72 13.5 94
Period II (March-June) 3.2 32 6.0 42
Period III (July-Sept.) 33.9 339 58.0 406
Period IV (Oct.-Dec.) 5.9 59 16.6 116










pesos. Capital investment varies inversely with the yields of crop and

livestock enterprises.

The INCORA Cordoba II Project is structured and administered so that

a number of farm operators share ownership and use of a tractor and ma-

chinery complement. The land is farmed as one single commercial unit

among these operators with them and their families providing a common

labor force on the cooperative farm.

The number of farm operators and families that would fully utilize

a tractor and machinery complement during the period of largest machinery

requirements was determined and used to compute the land, enterprise,

labor, capital and other informational components of the commercial co-

operative farm.

In every situation the restrictive period for power and machinery

was Period III (the restrictive month was August). The number of operators

comprising a commercial cooperative farm varies from 19 with high yields

to 10 with low yields for a unit that produces 15,000 pesos of net income

for each operator and his family. For a 25,000 peso net farm income per

operator, the number of operators varies from 10 with high yields to 7

with average and low yields.

For each of the yield situations, the hectares of either mechanized

rice or partially mechanized rice and the number of cow-calf units were

very small, even for the commercial cooperative unit. Additional farm

organizations were programmed that considered only purchased fattening

bulls as the livestock enterprise and either mechanized rice or partially

mechanized rice enterprises. These farm organizations were programmed

only for the average expected yield level for crops and livestock.

With partially mechanized rice only very small changes occurred in










the size of the enterprises for both the 15,000 peso- and 25,000 peso

net farm income levels (Table 4). A small increase in the hectares of

cotton and Para pasture occurred for both income levels and a .1 hectare

increase in total rice production occurred on the farm producing 25,000

pesos of net income. Total labor requirements were increased consid-

erably. This was due to the large labor requirement during the month

of December to harvest rice. Only small increases occurred in the in-

vestment capital requirements, with the largest increase (about 8,000

pesos) being on the farm producing 25,000 pesos of net income.

When the rice enterprise was restricted to mechanized production

the optimal farm organization was almost identical for the solution for

partially mechanized rice on the 15,000 peso net income unit (Table 5).

However, the number of operators comprising the commercial cooperative

farm decreased from 15 to 13 when mechanized rice was required. For the

25,000 peso net farm income, there was a small reduction in size of all

the enterprises when rice was restricted to mechanized production as

compared to partially mechanized production. These results indicate

that rather small changes may be expected to occur in the optimal farm

organizations for the various mixes of livestock and rice enterprises on

these farms.

Implication of Yields for Farm Size Planning Decisions

Variable yield results can provide information on environments char-

acterized by risk and uncertainty rather than by perfect knowledge. The

results can also provide information for groups of producers outside the

project area or for producers whose management abilities are above or be-

low the average assumed in this study.

It was assumed in all programmed results that the amounts and prices











Table 4.--Minimum land required to produce a net farm income of 15,000
pesos and 25,000 pesos with average yields on average quality
land, restricted to purchased fattening bulls and partially
mechanized rice, Cordoba II Project, Lower Sinu River Valley
of Colombia

15,000 peso 25,000 peso
Itm net income net income
Family Commercial Family Commercial
unit (15 families) unit (7 families)
- - Hectares - -- -

Land use
Cotton (partially mechanized) 2.5 37.5 4.8 33.6
Rice (partially mechanized) 1.0 15.0 1.9 13.3
Para pasture (improved manage- .6 9.0 1.1 7.7
ment
Total land 4.1 61.5 7.8 54.6
- - Number -- -- -
Land
Purchased fattening bulls 2.3 34.0 4.4 31.0
- - Man days -- - -
Labor
Operator and family 287.0 4,305 313.9 2,197
Hired 53.5 802 342.4 2,397
Total labor 340.5 5,107 656.3 4,594
- - Pesos - -
Capital investment
Land 69,085 1,036,275 131,430 920,010
Other 839 12,585 1,595 11,165
Total investment 69,924 1,048,860 133,025 931,175


Total operating capital 18,165 272,475 38,603 270,221


Total income 34,963 524,445 67,392 471,744

Crop operating expenses 10,584 158,760 20,400 142,800
Pasture and livestock
operating expenses 4,595 68,925 8,856 61,992
Annual interest on operating cap. 885 13,275 2,111 14,777
Hired labor expenses 803 12,045 5,136 35,952
Returns to land 3,096 46,440 5,889 41,223
- - Hours -- - -
Power and machinery requirements
Period I (Jan.-Feb.) 5.6 84 10.8 76
Period II (March-June) 2.5 38 4.8 34
Period III (July-Sept.) 25.0 375 47.9 335
Period IV (Oct.-Dec.) 4.5 68 8.6 60










Table 5.--Minimum land required to produce a net farm income of 15,000
pesos and 25,000 pesos with average yields on average quality
land, restricted to purchased fattening bulls and mechanized
rice, Cordoba II Project, Lower Sinu River Valley of Colombia

15,000 peso 25,000 peso
Itm net income net income
Family Commercial Family Commercial
unit (13 families) unit (7 families)
- - Hectares -- - -

Land use
Cotton (partially mechanized) 2.5 32.5 4.4 30.8
Rice (mechanized) 1.0 13.0 1.8 12.6
Para pasture (improved manage.) .6 7.8 1.0 7.0
Total land 4.1 53.3 7.2 50.4
- - Number - - -
Livestock
Purchased fattening bulls 2.3 30.0 4.1 29.0
-- --- -Man days -- -
Labor
Operator and family 205.1 2,666 281.1 1,968
Hired 14.7 191 104.0 728
Total labor 219.8 2,857 385.1 2,696
- - -Pesos - - -
Capital investment
Land 69,085 898,105 121,320 849,240
Other 853 11,089 1,474 10,318
Total investment 69,938 909,194 122,794 859,558


Total operating capital 18,766 243,958 34,049 238,343


Total income 35,579 462,527 62,331 436,317

Crop operating expenses 11,644 151,372 20,399 142,793
Pasture and beef operating
expenses 4,595 59,735 8,191 57,337
Annual interest on operating cap. 1,023 13,299 1,746 12,222
Hired labor expenses 221 2,873 1,559 10,913
Returns to land 3,096 40,248 5,436 38,052
- - -Hours -- - -
Power and machinery requirements
Period I (Jan.-Feb.) 5.6 73 9.9 69
Period II (March-June) 2.5 33 4.4 31
Period III (July-Sept.) 27.0 351 47.8 335
Period IV (Oct.-Dec.) 3.8 49 6.7 47










of all inputs and outputs were known with certainty. Use of high, aver-

age, and low crop and livestock yields provided a method for obtaining

information on a range of possible outcomes through programming. The

effect on operator incomes would be the same if any of the assumed con-

stants in the programming analysis were allowed to vary.

Theoretically, uncertainty implies additional costs or lost revenue

due to.improperly timed harvest, pasture not grazed, inopportune live-

stock sales, or reduced input levels with resulting lower outputs than

under conditions of certainty. No attempt has been made to determine the

range or standard deviation of net income variability encountered by pro-

ducers. Assuming the probability is low that net income will vary more

than the variations associated with yield changes of plus and minus 10

percent, the results will be useful for evaluating management decisions

under uncertainty. If the probability is great that net income will vary

more than that associated with these yields, then these results are of

limited worth in evaluating uncertainty.

For some of the family farm units, uncertainty is closely associated

with survival. If a normal distribution for programmed incomes is as-

sumed, 50 percent of the time incomes will be less than specified. If

family farm unit survival requires a minimum income 75 percent of the time,

a larger size unit than indicated by average yields is required. For

example, with low yields on average quality land a family farm unit re-

quired 5.3 hectares for a 15,000 peso net income. However, with average

yields on average quality land, only 3.9 hectares were required. A

farmer receiving low yields on average quality land for a unit programmed

with average yield would have only 73.5 percent of the land necessary to

attain an income of 15,000 pesos annually.










The programmed results shown in Figure 2 indicate a range of farm

incomes for various farm sizes with three different yield levels. The

range of incomes increases as farm size increases. For example, a three-

hectare farm has an income of about 8,500 pesos for low yields and about

14,750 pesos for high yields, or a range of 6,250 pesos. A 50 percent

increase in farm size to 4.5 hectares would provide an income of about

12,750 pesos for low yields and about 20,750 pesos for high yields, or

an 8,000 peso range. The expected results of larger family farm units

are: (a) increased expected mean incomes, and (b) increased range of

expected incomes.

Environments above or below average are shown by the fact that indi-

vidual operators have different average returns from the same set of pro-

duction conditions. This difference is often attributed to differences

in production techniques, managerial skills, or both. Therefore, average

for some farm operators may be represented by high yields in this study,

whereas average for others may be represented by low yields.

If the programmed results cover the practical range of variability

in management skill, the information presented in Figure 2 may show the

probable gains or losses from different levels of management employed on

various farm family unit sizes. For the next 15 years, farm sizes in the

Cordoba II Project area will be fixed. Any increases in farm family in-

come will come from increased productivity or efficiency.

Results of programming high, average, and low yields indicated that

when labor was fixed to the family production unit, increases in farm

size increased utilization of family labor, increased family income, and

also provided enlarged returns to superior management skills.







19





Hectares
of land




12 ....... High yields
Average yields
Low yields



10 -



6/
/
//
/





/ o








4 -
/
/


/ *
6/ /



















5,000 10,000 15,000 20,000 25,000

Net income in pesos


Figure 2.--Hectares of land required to produce specified net incomes
with high, average and low yields on average quality land.
p/ 0**
'9^


4
/ 9
9,x

'9--

2


0 ^ '
5,0 1000 1,00 2,00 2,0


Ne ncm n eo










Area Implications of Yield Variations

The economy of an area can be greatly affected by a 10 percent in-

crease or decrease in area yields. Increasing area yields by 10 per-

cent can increase area farm income by approximately 7 million pesos

(Table 6). Total economic activity in the area would be increased by

7 million pesos times the multiplier effect. It is apparent that non-

farm businesses as well as farmers can benefit from improved agricul-

tural technology, such as new crop varieties, water management, chemical

inputs, and improved management systems that increase yields. The re-

verse is true if these improved technologies are not adopted in the

study area and if other areas of Colombia adopt output increasing

technologies which cause prices to decline because of increased supply.

Net returns are practically a linear function of the number of

hectares in the farm unit. The increase or decrease in area income

caused by how farms are organized is relatively small compared to the

increase or reduction in income caused by higher or lower yields.

Though the specific income level and activity mix selected for

each farm unit does not materially affect total farm income of the area,

it does have a direct effect on the number of farm family units the

area can support. The number of farm families and their income levels

are important for decisions concerning schools, social institutions,

markets and communications.

The number of cooperative farms, family units and the area income

for alternative levels of farm family income are shown in Table 6.

High yield levels increase both area farm income and the number of

family units that can be established in the project area by an average

of about 21 and 26 percent, respectively, for both income levels. The











Table 6.--Effect of high, average, and low yields on numbers of farms and
area net farm income for specified income levels, Cordoba II
Project, Lower Sinu River Valley of Colombia


Yields Item


Area cooperative
farms
Change
Family units
Change
Area income
Change


Income level

15,000 25,000
pesos pesos


Number


Percent
Number
Percent
Pesosd
Percent


2,258
25.9
40,572
20.6


-11.3
1,250
26.9
38,063
20.7


-----------------------------'---------------------------

Area cooperative Number 119 141
farms

Average Family units Number 1,794 985
Area income Pesos 33,638 31,539
-------------------------------------------------------

Area cooperative Number 132 101
farms
Change Percent 10.9 -28.4

Low Family units Number 1,320 707
Change Percent -26.4 -28.2
Area income Pesos 26,508 24,400
Change Percent -21.2 -22.6


aThe number of cooperative farms and family units is calculated from
the estimated 7,000 hectares in the study area and the minimum land re-
quirements given in tables 1 through 3.
bThe percent change is based on the number of cooperative farms and
family units the area can support at average yields.
cArea income used here includes only returns to operator and family
labor, a 4 percent return on land capital, a 9 percent return on crops
and livestock operating capital, 11 percent return on machinery capital,
and real estate taxes.
These units are in thousands.
eThe percent change is based on the area income at average yields.


High










number of area cooperative farms remains unchanged at the lower income

level and declines by about 11 percent at the higher income level. This

decline is due to the increase in the number of families that comprise

the commercial unit and the associated increase in the hectares of land

in the commercial unit.

The number of farm families and the per farm income are also impor-

tant for evaluating future levels of demand for inputs and consumer goods

within the area. If development results in larger family units with a

larger per farm income, the aggregate demand schedule for products in

the area will differ from that under a situation of lower incomes per

farm and more family units. The actual aggregate demand will depend on

individual tastes and preferences and the income elasticity of demand

for a particular good.

Effects of Increases in Interest Rates

The optimum organizations for a 15,000 and a 25,000 peso income level

and four levels of interest rates are considered in this section. Higher

interest rates increased the minimum farm size, decreased the total oper-

ating capital used and slightly increased the total labor required. Al-

though the kinds of crops and livestock produced did not change, there

were shifts to more labor intensive methods of producing these activities.

Because of increased emphasis on activities which used labor during one

peak period, a near doubling of the interest rates decreased the area's

aggregate farm income by only 1.9 million pesos or 7.5 percent.

The effects of higher interest rates on farm organizations and size

of enterprises were small (Appendix Tables 16 and 17). As interest rates

increased, there was an increase in partially mechanized rice production.

Double cropping of corn entered the programming solution at the highest










interest rates for the 25,000 peso income level. There was a decrease

in the pasture management level and in the size of the livestock activities.

As the interest rate increased, the number of hectares in the mini-

mum size unit for specified incomes increased as shown in Table 7. Each

1 percent increase in interest rate required about a .9 percent increase

in land area.

Increased interest rates had a decreasing effect on the total oper-

ating capital requirements. Resources were shifted to less capital in-

tensive methods of producing the enterprises. The magnitude of the effect

of interest rates on total operating capital requirements decreased as

interest rates increased. Labor requirements increased only slightly with

higher interest rates.

Interest rates had no effect on the optimal mix of enterprises for

the area, although increasing capital costs encouraged use of more inten-

sive levels of management. Area farm income and the number of family

units in the area decreased slightly as interest rates increased.

Effects of Increases in Hired Wage Rates

The optimum organization of farm family units for the 15,000 and

25,000 peso income levels and four different wage rates are considered

in this section. Increasing wage rates had negligible effects on land

requirements. A moderate increasing effect on operating capital re-

quirements occurred. A shift to enterprises that more fully utilized

operator and family labor occurred as the wage rate for hired labor was

increased.

Increasing the wage rate affected organization by encouraging addi-

tional use of farm family labor and reducing hired labor. The quantity

of total labor required increased as the hired wage rates were increased










Table 7.--Resource requirements for a 15,000 and 25,000 peso net income
for alternative levels of interest rates and average yields
and land quality, Cordoba II Project, Lower Sinu River Valley
of Colombia


Land Hectares 3.9 7.1
Basea Operating capital Pesos 18,778 36,611
Total labor Man-days 291.2 391.0


Land Hectares 4.0 7.3
Change Percent 2.6 2.8
+ 3% Operating capital Pesos 16,973 33,397
Change Percent -9.6 -8.8
Total labor Man-days 292.5 394.0
Change Percent .4 .7
----------------------------------------------------
Land Hectares 4.1 7.5
Change Percent 5.1 5.6
+ 6% Operating capital Pesos 17,396 34,264
Change Percent -7.4 -6.4
Total labor Man-days 295.1 399.3
Change Percent 1.3 2.1


Land Hectares 4.2 7.7
Change Percent 7.7 8.5
+ 9% Operating capital Pesos 17,842 35,209
Change Percent -5.0 -3.8
Total labor Man-days 297.9 405.1
Change Percent 2.2 3.6


aBase interest rates are 9 percent on crop and livestock operating
capital and 11 percent on machine capital.
Change from base interest rates.










until a rate of 19 pesos per day was reached. The quantity of hired la-

bor remained almost constant for wage rates of 15 and 17 pesos per man-

day. At a wage rate of 19 pesos and 20 pesos per man-day, hired labor

was eliminated from the production units for the 15,000 peso and 25,000

peso income levels, respectively. Changes in hired wage rates had little

effect on farm size. As wage rates were increased, more efficient use of

operator and family labor held the area income loss to about 1.4 percent.

Varying the wage rates of hired labor had a very minor effect on

farm organization (Appendix Tables 18 and 19). At the highest wage rates

double cropping of corn replaced some cotton and thus used operator and

family labor more fully.

The minimum quantity of land required for the specified income level

was only slightly affected in an upward direction as shown in Table 8.

At the 15,000 peso income level no effect of increased wage rates on land

requirements was apparent from the programmed results. This was because

of the high utilization of the operator and family labor on the farm units.

Capital requirements increased slightly in an almost linear relation with

the increased wage cost.

As wage rates increase, managers will need to reallocate present re-

sources to take advantage of unused family labor. An example of this is

indicated by the introduction of a double cropping system.

The change in hired wage rates had no effect on the number of family

units or area income for the 15,000 peso income level. This was because

the units relied almost entirely on operator and family labor. At the

25,000 peso income level, area income and the number of family units in

the area decreased slightly when the wage rate on hired labor was increased

to 17 pesos per day. For further wage rate increases, no change occurred

in the number of family units or area income.










Table 8.--Resource requirements for a 15,000 and 25,000 peso net income
for alternative wage rates and average land quality and yields,
Cordoba II Project, Lower Sinu River Valley of Colombia

Income level
Wagea Item Unit 15,000 25,000
pesos pesos

Land Hectares 3.9 7.1
Base of Operating capital Pesos 18,778 36,611
15 pesos Total labor Man-days 291.2 391.0



Land Hectares 3.9 7.2
Changeb Percent 0.0 1.4
17 pesos Operating capital Pesos 18,810 36,982
Change Percent 1.7 1.0
Total labor Man-days 291.4 393.1
Change Percent 0.0 0.5
-----------------------------------------------------------------
Land Hectares 3.9 7.2
Change Percent 0.0 1.4
19 pesos Operating capital Pesos 18,846 37,377
Change Percent 3.6 2.1
Total labor Man-days 291.5c 395.0
Change Percent 0.1 1.0


Land Hectares 3.9 7.2
Change Percent 0.0 1.4
20 pesos Operating capital Pesos 18,846 37,643
Change Percent 3.6 2.8
Total labor Man-days 291.5c 385.0
Change Percent 0.1 -1.5


aRate paid for one man-day of labor.
bChange from base hired wage rate.
CNo labor was hired with wage rate of 19 pesos per day.










Effects of Reductions in the Price of Cotton

Cotton was included in the farm enterprise mix of all the program-

ming solutions. Therefore, the price of cotton was varied to determine

its effects on farm size, capital requirements, labor requirement, en-

terprise mix, area income and number of family units in the area. This

analysis is particularly relevant for future decisions concerning the

price support program for cotton in Colombia.

In the programming analysis, the gross revenue from cotton was

varied downward at 500 peso increments until cotton did not enter the

optimum enterprise mix for the 15,000 peso and 25,000 peso income levels.

The effects on farm organization of decreasing the revenue from cotton

are shown in Appendix Tables 20 and 21. As the price of cotton decreased,

production was shifted to a double-cropped corn enterprise. A small in-

crease in pasture also occurred. When cotton was dropped from the enter-

prise alternatives, corn replaced cotton an all the land formerly used

by cotton. A decrease in the price of cotton increased the quantity of

land required to obtain the specified income levels. The total opera-

ting capital requirements tended to increase as the price of cotton was

reduced. Total labor requirements increased slightly as long as cotton

was still included in the enterprise mix, but dropped when it was ex-

cluded. Hired labor was eliminated after the first price drop in all

solutions. A 500 peso decrease in gross returns per hectare is equiva-

lent to a price decrease of .2 pesos per kilogram. Thus, with only a

slight decrease in the price of cotton, the optimum enterprise combina-

tion excludes cotton production in the area. This result points to the

importance of maintaining price support programs for cotton if its pro-

duction is to be encouraged in the area.










As farm size increased, the number of family units possible in the

area decreased, and the range of an individual farmer's possible income

increased because of the increased size of unit required for a specified

income level.

The minimum resource requirements for the two specified income

levels are shown in Table 9. The minimum land required increased for

each incremental decrease in cotton price until cotton was eliminated

from the enterprise mix. Total operating capital requirements also in-

creased with each reduction in the price of cotton. Labor requirements

increased only slightly and even dropped when cotton was withdrawn from

the enterprise mix for the 25,000 peso income level.

Price reductions reduced the overall area farm income and the num-

ber of farm family units that can obtain the specified income. The

elimination of cotton also reduced the overall employment in the area.

However, the elimination of cotton permitted making greater use of

operator and family labor.

Effects of Reductions in the Price of Rice

The optimum solutions for the specified income levels all included

some level of rice production. Rice is especially well adapted to the

heavy humid soils of the area and will likely become increasingly im-

portant in the area. Changes in price levels will affect the optimum

size unit required to utilize operator and family labor and attain the

specified income levels.

The optimal organization of enterprises for the 15,000 and 25,000

peso income levels at different price levels for rice and one without

rice:production were programmed. The effect of decreasing the price of

rice was to increase the size of unit required to obtain the specified











Table 9.--Resource requirements for a 15,000 and 25,000 peso net income
for variable cotton prices and average land quality and yields,
Cordoba II Project, Lower Sinu River Valley of Colombia

Income level
Cotton
Cotton Item Unit 1,0
price 15,000 25,000
pesos pesos

Land Hectares 3.9 7.1

Base Operating captial Pesos 18,778 36,611
Total labor Man-days 291.2 391.0


Land Hectares 4.3 7.6
Change Percent 10.3 7.0

500 peso Operating capital Pesos 20,892 39,681
decrease Change Percent 11.3 8.4

Total labor Man-days 302.1 395.1
Change Percent 3.7 1.0
----------------------------------------------------------------

Land Hectares 4.6b 8.0
Change Percent 17.9 12.7
1,000 peso Operating capital Pesos 24,640 42,772
decrease Change Percent 31.2 16.8

Total labor Man-days 298.8 396.7
Change Percent 2.6 1.5
---------------------------------------------------------------

Land Hectares 4.6 8.0
Change Percent 17.9 12.7
No Operating capital Pesos 24,640 44,105
cotton Change Percent 31.2 20.5

Total labor Man-days 298.8 372.5
Change Percent 2.6 -4.7



aChange from base price of cotton.
bNo cotton entered the solution at a gross return 1,000 pesos below
the base gross return per hectare.










income levels. Operating capital requirements varied directly with the

size of the farm unit in the case of a 15,000 peso income level. For

the 25,000 peso income level, operating capital requirements increased

due to an increase in farm size and a readjustment of the optimal en-

terprise mix when rice was eliminated. The labor requirements generally

increased as the price of rice declined except in the case of no rice at

a 15,000 peso income where shifting to livestock enterprises reduced the

total labor requirement. The optimum organizations for the 15,000 and

25,000 peso income levels with a declining price for rice are shown in

Appendix Tbles 22 and 23. The basic solution and the effects of varying

the price of rice and of excluding rice are shown in Table 10.

Reducing the price of rice decreased the number of family units in

the area and decreased area net farm income. Elimination of rice from

the enterprise mix decreased area farm income by 3.5 and 4.5 million

pesos for the 15,000 peso and 25,000 peso income levels, respectively.

The large potential for expansion of rice production presents im-

portant considerations for INCORA policy makers. Rice production could

easily be tripled with only small increases in inputs. This could have

a tremendous effect on area output and area income, and cause consider-

able reallocation of production resources.


SUMMARY AND CONCLUSIONS

A number of optimal farm organizations, employing the minimum hectares

of land required to produce a net farm income of 15,000 pesos and 25,000

pesos, were developed for the Cordoba II Project area. Different organi-

zations resulted from different assumptions regarding yields, interest

on borrowed capital, costs of hired labor, and prices received for cotton

and rice.











Toble 10.--Resource requirements for a 15,000 and 25,000 peso net income
for variable rice prices and average land quality and yields,
Cordoba II Project, Lower Sinu River Valley of Colombia


Price Income level
Price
of rice Item nit 15,000 25,000
pesos_ pesos

Land Hectares 3.9 7.1
Base Operating capital Pesos 18,778 36,611
Total labor Man-days 291.2 391.0


Land Hectares 4.2 7.8
Change Percent 7.7 9.9
1,000 Operating capital Pesos 20,665 35,752
peso Change Percent 10.0 -2.3
decrease
Total labor Man-days 301.8 412.3
Change Percent 3.5 5.4


Land Hectares 4.6 8.3b
Change Percent 17.9 16.9

2,000 Operating capital Pesos 29,014 51,967
peso Change Percent 54.5 41.9
decrease
Total labor Man-days 317.1 447.8
Change Percent 8.9 14.5


Land Hectares 4.7 8.3
Change Percent 20.5 16.9

No Operating capital Pesos 35,958 51,967
rice
rice Change Percent 91.5 41.9

Total labor Man-days 262.9 447.8
Change Percent -9.7 14.5


aChange from base price of rice.
No rice entered the solution at a gross return 2,000 pesos below the
base gross return per hectare.









When yields on crops and livestock were increased from average to

:.0 percent abcva avernge, the minimum hectares of land required to pro-

Cuce a net farm income of 15,000 pesos declined from 3.9 to 3.1 hectares.

For a 25,000 peso net income the decline was from 7.1 to 5.6 hectares.

A reduction of yields by 10 percent from the average level increased

minimum land requirements by 1.4 hectares for the 15,000 peso net income

and by 2.8 hectares for the 25,000 peso net income.

Since participants in the Cordoba II Project possess very little

capital, INCORA provides to them investment capital and operating capital

at interest rates substantially below those existing in the private cap-

ital market. Interest rates were increased from the base level of 9 per-

cent on crop and livestock operating capital and 11 percent on machinery

capital to levels consistent with the private capital market. Each 1.0

percent increase in the interest rate on borrowed capital resulted in

about a .9 percent increase in the minimum hectares of land required to

obtain the specified income levels.

Cotton and rice were major enterprises in the optimal organizations

developed in this analysis, and both require large amounts of labor.

Consequently, it was believed that substantial variations in the price

of hired labor would greatly affect the hectares of land needed to pro-

duce the given levels of net farm income. However, when the wage rate

on hired labor was increased from the base level of 15 pesos per man-

day up to 20 pesos, there was practically no change in the minimum farm

size. This resulted from shifts to enterprises that more fully utilized

operator and family labor.

A very small reduction in the price of cotton, about .2 to .4 pesos

per kilogram, resulted in its elimination from the optimum enterprise










combination on the programmed farms. This result emphasises that cotton

production in the area is dependent on maintaining the current level of

price support programs.

Implications for Farm Planning

The motives and objectives of INCORA and those of farm operators

and the area resources available must be considered in evaluating the

potential farm organization for the area. The potential number of co-

operative farms and the number of families for the area as given in

Table 6 has no meaning unless a single development criterion is selected.

The minimum resource requirements presented should be more useful for

evaluating the type and size of farm units to establish in the study

area if consideration is given to characteristics of the peasant producer.

The characteristics of the peasant farmer groups are:

(a) The 15,000 peso income level represents the return to operator
and family owned resources which is about equivalent to the
national average per capital income for a family of nine per-
sons. The peasant operator has little or no capital, has low
levels of knowledge of technical production, displays poor
marketing skills, and possesses limited entrepreneurial ex-
perience. INCORA will need to provide technical assistance,
credit, marketing assistance, land, and some physical production
inputs. The operator and his family must provide the majority
of the labor requirements. The inputs required for this income
level are 3.9 hectares of average land with average yields and
a total of 18,778 pesos of operating capital.

(b) The 25,000 peso income level represents the return to operator
and family owned resources of a more highly motivated family.
This family may have a very small amount of capital, some
knowledge of technical production, limited marketing skill or
knowledge of markets, and some entrepreneurial ability. The
minimum resources required for this income level under condi-
tions of average yields are 7.1 hectares of average quality
land and 36,611 pesos of operating capital.

Implications for Area Planning

At present, most peasant operators fall into one of the two above

groups. The potential for adjustments over a period of time is greatly






34


influenced by which class will dominate the area.

Some other limits on the adjustments that peasant operators can

make over extended time are implied by equity levels, land transfer

requirements, market potentials, limits on farm size, and family con-

sumption levels. In the future, increases in equity for owned resources

will allow farm incomes to increase. Technological improvements and

efforts to increase individual entrepreneurial abilities will greatly

influence area income.










REFERENCES


1. Bustanente, Heliodoro, J. L. Espana, and Adolfo Correa. 1967.
Clasificaci6n de Tierras Para Obras de Irrigaci6n y Drenaje;
Sector Monteria Cerete. Bogota: Instituto Geografico Agustin
Codazzi.

2. Economic and Engineering Study, Marketing and Storage Facilities
for Grain and Tuberous Crops in Colombia. 1965. Kansas City:
Department Administrativo de Planeacion through the Banco de la
Republica, Weitz-Hettlelsater Engineers.

3. Havens, A. Eugene, Eduardo L. Montero, and Michel Romieux. May,
1965. Cerete Un Area de Latifundio, Estudio Economico y Social.
No. 3. Bogota: Universidad Nacional de Colombia.

4. Meyer, Neil Larry. "Minimum Resource Requirements for Specified
Levels of Income on Crop-livestock Farms in the Sinu River Valley
of Colombia," (unpublished M.S. Thesis, University of Florida,
1969), pp. 166.





































APPENDIX






























Footnotes to Appendix Tables 1 through 8

aTons are metric units (2205 lbs.).
This estimate is the return to land, capital, labor, management
and risk. All return estimates implicitly include a return to over-
head capital. Seasonal hired labor costs, interest on operating
capital, and annual cost of land is determined by the programming
procedure.
cIncludes a 6% shrinkage during hauling to market.
AUM is Animal Unit Months of grazing.











Appendix Table 1.--Cotton (partially mechanized): Estimated production requirements and income per hectare,
Lower Sinu River Valley of Colombia


(1) Total income Cotton fiber and seed

(2) Specified variable expenses


Clipping
Plowing
Disking
Planting
Seed
Cultivating
Chilling
Fertilizer
Fertilizer
Spraying
Insecticides
Toxefeno-DDT (40-20)
Methyl-Parathion 40 (48%)
Sevin 80
Ekatin (25%)
Sacks
Farm transport
Transport to gin
Unload at gin
Technical assistance


Custom (MF165-72" clipper)
Custom (MF165-4 disk)
Custom (MF165-9' tandem)
Custom (MF165-4 row)
Adapted variety
Custom (MF165-4 row)
Custom (MF165-4 row)
14-14-14 (with planting)
Urea (46% N)
Custom (airplane)






Custom (tractor and wagon)
Custom (tractor and wagon)


ha.
ha.
ha.
ha.
kg.
ha.
ha.
kg.
kg.
ha.

gal.
gal.
lb.
liter
each
ton
sack
sack
ha.


3,700.00



70.00
200.00
70.00
70.00
2.50
60.00
60.00
1.68
1.90
25.00

45.30.
75.45
16.30
35.00
6.00
12.00
1.50
.30
90.00


Value
or
cost
Pesos
9,250.00


1
2
4
1
30
1
1
200
100
10

1
2.55
25
.3
72
2.5
72
72
1


(3) Total specified costs

(4) Net return over specified costs


70.00
400.00
280.00
70.00
75.00
60.00
60.00
336.00
190.00
250.00

45.30
192.40
407.50
10.50
432.00
30.00
108.00
21.60
90.00


3,128.30

6,121.70


Footnotes cited on page 37.











Appendix Table 2.--Rice (mechanized): Estimated production requirements and income per hectare, Lower
Sinu River Valley of Colombia
Price or Value
Item Description Unit cost per Quantity or
unit cost
-- -- -----------------~~ --------"" ~ ~ T rtr/^^P* ortO


(1) Total income


Rice paddy


tons 1,800.00


3.75 6,750.00


(2) Specified variable expenses
Plowing Cu
Disking Cu
Planting Cu
Seed Ad
Fertilizer 10
Fertilizer Ur
Spraying Cu
Spraying Cu
Fungicide An
Herbicide St
Herbicide Fe
Insecticides
Toxefeno-DDT (40-20)
Sevin 85-
Ekatin (25%)
Aldrin (0
Combining Ct
Sacks
Farm transport Ci
Transport to market Ci
Technical assistance

(3) Total specified costs

(4) Net returns over specified costsb


stom (MF165-4 disk)
stom (MF165-9' tandem)
stom (MF165-drill)
apted variety
-10-10 (with planting)
*ea (46% N)
istom (MF165-sprayer)
stom (airplane)
Ltraco (with seed)
:am F-34
sde-Arroz 500




Jith seed)
istom

istom (tractor and wagon)
istom (tractor and wagon)


Footnotes cited on page 37.


1
3
1
150
200
75
2
3
5
2.5
.67

1.28
5
.3


ha.
ha.
ha.
kg.
kg.
kg.
ha.
ha.
lb.
gal.
gal.

gal.
lb.
liter
kg.
sack
each
sack
sack
ha.


200.00
70.00
70.00
4.37
1.63
1.90
30.00
25.00
1.00
161.00
107.00

45.30
16.00
35.00
2.25
10.00
4.00
.30
1.50
60.00


200.00
210.00
70.00
655.50
326.00
142.50
60.00
75.00
5.00
402.50
71.69

57.98
80.00
10.50
11.25
750.00
300.00
22.50
112.50
60.00

3,622.92


3,127.08












Appendix Table 3.--Rice (partially mechanized): Estimated production requirements and income per hectare,
Lower Sinu River Valley of Colombia


(1) Total income Rice paddy


1,800.00


Pesos
3.75 6,750.00


(2) Specified variable expenses
Plowing
Disking
Planting
Seed
Fertilizer
Fertilizer
Spraying
Spraying
Fungicide
Herbicide
Insecticide
Toxefeno-DDT (40-20)
Sevin 85.
Ekatin (25%)
Aldrin (with seed)
Sacks
Transport to market
Technical assistance

(3) Total specified costs

(4) Net return over specified costs


Custom (MF165-4 disk)
Custom (MF165-9' tandem)
Custom (MF165-drill)
Adapted variety
10-10-10 (with planting)
Urea (46% N)
Custom (MF165-sprayer)
Custom (airplane)
Antraco (with seed)
Stam F-34






Custom (tractor and wagon)


Footnotes cited on page 37.


ha.
ha.
ha.
kg.
kg.
kg.
ha.
ha.
lb.
gal.

gal.
lb.
kg.
kg.
each
sack
ha.


1
3
1
150
200
75
2
3
5
2.5

1.28
5


200.00
70.00
70.00
4.37
1.63
1.90
30.00
25.00
1.00
161.00

45.30
16.00
35.00
2.25
4.00
1.50
60.00


200.00
210.00
70.00
655.50
326.00
142.50
60.00
75.00
5.00
402.50

57.98
80.00
10.50
11.25
300.00
112.50
60.00


2,778.73

3,971.27











Appendix Table 4.--Corn (mechanized): Estimated production requirements and income per hectare, Lower
Sinu River Valley of Colombia

Price or Value
Item Description Unit cost per Quantity or
unit cost


Shelled corn


(2) Specified variable expenses
Plowing
Disking
Planting
Seed
Fertilizer
Fertilizer
Herbicide
Spraying
Spraying
Insecticides
Aldrin
Cebicid
DDT
Sacks
Farm transport
Shelling
Transport to market
Technical assistance


Custom (MF165-4 disk)
Custom (MF165-9' tandem)
Custom (MF165-4 row)
H-104 variety
14-14-14 (with planting)
Urea (46% N)
Gesaprin (80%)
Custom (MF165-sprayer)
Custom (airplane)


Granular (2.5%)
(35%)

Custom (tractor and wagon)
Custom (MF165-sheller)
Custom (tractor and wagon)


(3) Total specified costs

(4) Net return over specified costsb


Footnotes cited on page 37.


(1) Total income


tona


Pesos
1,300.00


200.00
70.00
70.00
4.50
1.68
1.90
62.25
30.00
25.00

2.25
3.12
33.00
4.00
.30
49.00
1.50
50.00


3.5


1
3
1
25
200
100
2.5
1
1

. 1
25
1.6
70
134
3.5
70
1


Pesos
4,550.00



200.00
210.00
70.00
112.50
336.00
190.00
155.62
30.62
25.00

2.25
78.00
52.80
280.00
40.20
171.50
105.00
50.00

2,108.87

2,441.13


kg.
kg.
gal.
each
sack
tona
sack
ha.











Appendix Table 5.--Corn (partially mechanized): Estimated production requirements and income per hectare,
Lower Sinu River Valley of Colombia


Pesos Pesos

(1) Total income Shelled corn tonsa 1,300.00 3.5 4,550.00

(2) Specified variable expenses


Plowing
Disking
Planting
Seed
Fertilizer
Fertilizer
Spraying
Cultivating
Insecticides
Aldrin
Cebicid
DDT
Sacks
Farm transport
Shelling
Transport to market
Technical assistance


Custom (MF165-4 disk)
Custom (MF165-9' tandem)
Custom (MF165-4 row)
H-104 variety
14-14-14 (with planting)
Urea (46% N)
Custom (airplane)
Custom (MF165-4 row)


Granular (2.5%)
(35%)

Custom (tractor and wagon)
Custom (MF165-sheller)
Custom (tractor and wagon)


(3) Total specified costs

(4) Net return over specified costs


Footnotes cited on page 37.


ha.
ha.
ha.
kg.
kg.
kg.
ha.
ha.

kg.
kg.
gal.
each
sack
a
ton
sack
ha.


200.00
70.00
70.00
4.50
1.68
1.90
25.00
60.00

2.25
3.12
33.00
4.00
.30
49.00
1.50
50.00


1
3
1
25
200
100
1
1

1
25
1.6
70
134
3.5
70
1


200.00
210.00
70.00
112.50
336.00
190.00
25.00
60.00

2.25
78.00
52.80
280.00
40.20
171.50
105.00
50.00

1,983.25

2,566.75











Appendix Table 6.--Purchased fattening bulls: Estimated production requirements and
Lower Sinu River Valley of Colombia


income per head,


Price or Total Value
Item Unit Rate Number cost per y or
quantity
unit cost
Pesos Pesos

(1) Livestock investment
Feeder bull head 360 kg. 1 1,750.00 1 1,750.00

(2) Production
Fat bull head 441 kg.c 1 2,400.00 1 2,400.00
Less 3% death loss 72.00
Total income 2,328.00

(3) Inputs
Salt and mineral kg. .58 .72 7 5.04
Veterinary and medical peso/head 1.0 4.72 4.72
Equipment depreciation peso/head 1.0 27.95 27.95
Transport to market peso/head 1.0 150.00 2328 150.00
Market commission peso 2% 46.56

(4) Total specified costs 1,984.27

(5) Net return over specified 343.73
cost


Footnotes cited on page 37.











Appendix Table 7.--Beef cows (best management): Estimated production requirements and
herd and per cow unit, Lower Sinu River Valley of Colombia


income for a 100-cow


Price or Total Total value Value or
Item Unit Rate Number cost per uantitor cost cost per
quantity or cost
unit cow unit
Pesos Pesos Pesos


(1) Livestock investment
Mature cows
Breeding bulls
Replacement bull
Replacement heifers
Heifers (over 2 yrs.)
Heifers (coming 2 yrs.)
Heifers (coming 1 yr.)
Beef bulls (over 2 yrs.)
Beef bulls (coming 2 yrs.)
Beef bulls (coming 1 yr.)
Total investment

(2) Production
Cull cows
Fat heifers
Fat bulls
Total income

(3) Inputs
Salt and minerals
Cows and bulls
Heifers and bulls
(over 2 yrs.)
Heifeis and bulls
(coming 2 yrs.)
Heifers and bulls
(coming 1 yr.)


head
head
head
head
kg.
head
head
kg.
head
head


head
kg.
kg.





kg.

kg.

kg.

kg.


400 kg.
625 kg.
375 kg.
325 kg.
411
325 kg.
243 kg.
437
325 kg.
243 kg.


386
411c





15.0

12.0

10.2

7.2


1,400
800
5,500
1,400
3.61
1,400
800
4.44
1,700
825


15
24
43





104

86

87

89


1,900
4.61
5.44





.72

.72

.72

.72


100
4
1
18
9,864
43
44
18,791
44
45


15
9,264
17,673





1,560

1,032

887.4

640.8


140,000
32,000
5,500
25,200
35,609
60,200
35,200
83,432
74,800
37,125
529,066


28,500.00
42,707.07
96,141.12
167,348.19




1,123.20

743.04

638.93

461.38


5,290.66


1,673.48


Continued











Appendix Table 7.--Beef cows (best management):
herd and per cow unit, Lower


Estimated production requirements and income for a 100-cow
Sinu River Valley of Colombia--Continued


Price or Value or
Total Total value
Item Unit Rate Number cost per quanticost per
t quantity or cost
unit cow unit
Pesos Pesos Pesos


Veterinary and medical
Cows
Breeding bulls
Beef bulls and heifers
(over 1 yr.)
Beef heifers
(coming 1 yr.)
Beef bulls
(coming 1 yr.)
Equipment depreciation
Bull depreciation
Transport to market
Market commission


peso/head
peso/head

peso/head

peso/head

peso/head
peso
peso
peso
peso


100
5

172


16.64
6.64


6.64

9.70


6.10
3,932.00
1,313.00
150.00


167,348.19


(4) Total specified costs

(5) Net return over specified costsb


1,664.00
33.20

1,142.08

426.80

274.50
3,932.00
5,252.00
12,300.00
3,346.96

31,338.09

136,010.10


Footnotes cited on page 37.


313.38


1,360.10











Appendix Table 8.--Para pasture: Estimated production and annual costs per hectare for improved management
and best management practices, Lower Sinu River Valley of Colombia

Price or Improved management Best management
Item Unit cost per Quan- Value or Quan- Value or
unit tity cost tity cost
Peso Peso Peso

(1) Production
Grazing (Dec.-Mar.) AUMd 6 8
Grazing (Apr.-Nov.) AUM 32 44

(2) Specified variable expenses
Annual charge for establishment ha. 109.00 1 109.00 1 109.00
Fence depreciation peso/meter .50 60 30.00 60 30.00
Urea (46% N) kg. 1.90 200 380.00

(3) Total specified costs 139.00 519.00


Footnotes cited on page 37.










Appendix Table 9.--Labor requirements for enterprises appearing in the optimal organizations

Cotton, Rice, Rice, Corn, Corn, Corn, Fatten- Beef Pasture Pasture
Month PB MB PB MB PA PB ing Cow,BM IM BM
1-hectare 1-hectare 1-hectare 1-hectare 1-hectare 1-hectare bulls 1-cow 1-hectare 1-hectare
1-animal unit
-- - --- - - -M-an-days - - - - -

January 40.0 -- -- .02
February 7.0 -- -- .02
March -- -- -- .08 .3 .3
April .07 .08
May -- -- .13 .07 .08 6.1
June -- -- 15.5 .07 .28 6.1
July -- .13 2.13 -- -- .07 .02 -- 6.1
August .13 2.0 12.0 2.63 12.0 .13 .07 .02
September 3.0 2.0 2.0 2.0 -- 5.5 .07 .02 -- 6.1
October 14.0 2.0 -- 5.25 -- .07 .04 6.1
November 8.0 1.0 1.0 5.0 -- 12.2 -- .04 .3 6.4
December 10.0 -- 112.5 12.25 -- 5.25 -- .22 -- -

Total 82.13 7.13 129.63 21.88 32.88 32.88 .49 .92 12.8 25.0


aOne man-day equivalent to ten man-hours. Explanation of
PB--partially mechanized production in Semester B
MB--mechanized production in Semester B
PA--partially mechanized production in Semester A
BM--best managed herd or pasture system
IM--improved management on pasture


the enterprise codes are as follows:











Appendix Table 10.--Power and
tions


machinery requirements for crop enterprises appearing in the optimal organiza-


Cotton, PB
1-hectare


Rice, MB
1-hectare


Rice, PB
1-hectare


Corn, MB
1-hectare


Corn, PA
3-hecarre


Corn, PB
1-hectare


.25

2.0

1.0


3.0

3.0

1.0


January

February


March

April

May

June

July

August


September

October

November

December

Total


1.0


192 25


1.25


2.25


aDoes not include machine time of custom combine.
PB--partially mechanized production in Semester
MB--mechanized production in Semester B
PA--partially mechanized production in Semester


Explanation of the enterprise codes are as follows:


Month


Hours


2.0

3.0

1.0

1.0


.25


7.25


1.25


7.75


8.25


8.25


- -~-----~-------


,


l


- 1,


_ .25


1 27 5.










Appendix Table 11.--Total investment, salvage
machinery and equipment


value, expected life, and estimated costs per hour for


Initial Salvage
Item
cost value

Pesos Pesos
Tractor
(65 HP) 69,000 17,250
Plow
(4 disk) 13,000 1,300
Disk
(9 ft. tandem) 16,000 1,600
Cultivator
(4 row) 16,500 1,650
Tractor mounted
sprayer 5,000 500
Planter
(4 row) 18,600 1,860
Drill
(10 ft.) 18,600 1,860
Rotary clipper
(72 inch) 14,500 1,450
Corn sheller
(4 ton/hour) 13,500 1,350
Combine
(14 ft. rice) 280,000 28,000
Wagon
(4 ton) 9,130 913

aEstimated on the basis of two-thirds available


i i


Ex- Repair cost Depreciation
pected as % of charges per
life initial cost hour
Hours Percent Pesos


12,000 108 7.76a


2,500 108 5.15

2,500 108 5.76


2,500 108 5.94


1,200 72 3.75

1,200 90 13.95


1,200 90 13.95


2,000 54 6.53


1,500 54 8.10


2,000 54 126.00


5,000 90 2.45a


time used in farm production.


Operating
Repair
costs
per hour
Pesos


9.32a


5.62


6.91

7.13


3.00

13.95


13.95


3.92

4.86


75.60

2.45a


costs
Fuel and
oil costs
per hour
Pesos


8.40a





















6.30


20.00










Appendix Table 12.--Estimated total power and machine days and hours available by months and periods,
Cordoba II Project, Lower Sinu River Valley of Colombia

Period I Period II Period III Period IV
Item Total
Jan. Feb. Mar. Apr. May June July Aug. Sep. Oct. Nov. Dec.

Power and
Machine daysa 22 19 21 16 16 14 13 14 18 16 20 18 207

Power and
Machine hours 220 190 210 160 160 140 130 140 180 160 200 180 2,070


aower and machine days based on six days per week with deletions for rain (20-50 mm. in one day or 60 mm.
in two consecutive days, delete two days, more than 50 mm. in one day, delete three days) and local, reli-
gious and national holidays.
bBased on 10 hours per day not including service and maintenance.










Appendix Table 13.--Definition of land resource situations and yield
levels by productivity class, Cordoba II Project,
Lower Sinu River Valley of Colombia


Land class


Definition


Light to heavy texture; deep topsoil; medium well-
drained to imperfectly drained; suitable for shallow
rooted crops.

Heavy texture; moderately deep, level topsoil; imper-
fectly drained; suitable for shallow rooted crops.

Lower elevation; heavy texture; moderately deep, level
topsoil, often high in organic matter; poorly drained;
suitable for rice and pasture production; with drain-
age can be transferred to Class II land.


Soils similar to Class III
drained; suitable only for
for water control.


land, but very poorly
pasture; limited possibility


e Te o Units of Yield by land class
Enterprise Type of
fertilizer yield I II III IV

Cotton 14-14-14 and tons/ha. 2.5 2.375 NR NR
Urea (46%N)

Corn 14-14-14 and tons/ha. 3.5 3.325 NR NR
Urea (46%N)

Rice 10-10-10 and tons/ha. 4.0 3.8 3.8 NR
Urea C 46%)

Para pasture (im-
proved management)

Dry season none AUM/ha. 6.0 6.0 6.0 6.0

Wet season none AUM/ha. 32.0 32.0 32.0 32.0

Para pasture (best
management)

Dry season none AUM/ha. 8.0 8.0 8.0 8.0

Wet season Urea (46%N) AUM/ha. 44.0 44.0 44.0 44.0

aTons are metric units (2205 lbs.); AUM is Animal Unit Months.
bNR--not recommended on these types of soils.
CNative Para pasture under traditional management yields 2.0 AUM's of
grazing during the dry season and 12.0 AUM's during the wet season.











Appendix Table 14.--Land class composition, valuation, and estimated
costs of ownership per hectare for average quality
land, Cordoba II Project, Lower Sinu River Valley
of Colombia

Land Value a Land class composition V
class per hectare Value
class _per hectare per representative hectare


Pesos Percent


22,000

17,000

14,000

2,000


Total value


Pesos

11,880

1,190

3,500

280

16,850


Prorated cost of Interest on Annual
Municipal
registration, transfer land cost of
and other legal fees ax capital land
- - - - Pesos - - - -

13 68 674 755


a
INCORA records in Monteria, Obres de Adecuacion-Costo, from legal
and engineering departments.
12 pesos registration and 1 peso transfer and other legal fees.
CBased on a rate of 4 pesos per 1,000 pesos value.
INCORA land loans have a 4 percent annual interest rate.










Appendix Table 15.--Man-equivalent days of labor available by months,
Cordoba II Project, Lower Sinu River Valley of
Colombia


Seasonal Other Total
time Months labor family man-days
periods labor per month


Period I


January
February


Period II


March
April
May
June


Period III


Period IV


July
August
September



October
November
December


Year


(47)
24
23

(94)
25
24
24
21

(69)
24
21
24

(72)
25
22
25

282


(57)


(90)


(104)


(184)


(66)


(135)


23

(81)


47

(153)


aOperator labor is based on six days per week
sickness, rain, and local religious and national


with deletions for
holidays.


Other family labor is based on .95 additional adult male in the
family helping on the farm plus .5 additional man equivalents of labor
from school age children during December and January.











Appendix Table 16.--Minimum land required to produce a net farm income
of 15,000 pesos on average quality land with average
yields and variable interest rates on operating cap-
ital, Cordoba II Project, Lower Sinu River Valley of
Colombia

Level of interest rate
Item Unit
Basic +3%b +6%c +9%

Total land in farm Hectares 3.9 4.0 4.1 4.2
Cotton (partially
mechanized) Hectares 2.4 2.4 2.5 2.6
Rice (mechanized) Hectares .3 .3 .4 .4
Rice (partially
mechanized) Hectares .7 .7 .6 .6
Para pasture (im-
proved manage-
ment) Hectares .6 .6 .6
Para pasture (best
managed) Hectares .5
Livestock
Beef cows (best
managed) Cow units .4 .3 .3 .3
Purchased fatten-
ing bulls) Head 1.9 1.4 1.4 1.4
Operator and family
labor Man-days 282.5 282.4 282.6 282.8
Hired labor Man-days 8.7 10.1 12.5 15.1
Total operating
capital Pesos 18,778 16,973 17,396 17,842
Land investment Pesos 65,715 67,400 69,085 70,770
Other investment
capital Pesos 2,891 2,414 2,427 2,439
Total income Pesos 33,389 32,675 33,376 34,116
Crop operating ex-
penses Pesos 10,393 10,630 10,884 11,151
Pasture and beef
operating expenses Pesos 4,116 2,876 2,938 3,003
Annual interest on
operating capital Pesos 804 997 1,270 1,664
Hired labor expenses Pesos 131 152 188 227
Returns to land Pesos 2,945 3,020 3,096 3,171


aInterest rate of 9 percent on crop and livestock operating capital
and 11 percent on machine capital.
bInterest rate of 12 percent on crop and livestock operating capital
and 14 percent on machine capital.
CInterest rate of 15 percent on crop and livestock operating capital
and 17 percent on machine capital.
dInterest rate of 18 percent on crop and livestock operating capital
and 20 percent on machine capital.










Appendix Table 17.--Minimum land required to produce a net farm income
of 25,000 pesos on average quality land with average
yields and variable interest rates on operating cap-
ital, Cordoba II Project, Lower Sinu River Valley of
Colombia

Im Ut Level of interest rate
Item Unit Baic 6
Basica +3%b +67C +97.


Total land in farm
Corn (partially
mechanized)
Cotton (partially
mechanized)
Rice (mechanized)
Rice (partially
mechanized)
Para pasture (im-
proved manage-
ment)
Para pasture (best
managed)
Livestock
Beef cows (best
managed)
Purchased fatten-
ing bulls
Operator and family
labor
Hired labor
Total operating
capital
Land investment
Other investment
capital
Total income
Crop operating ex-
penses
Pasture and beef
operating expenses
Annual interest on
operating capital
Hired labor expenses
Returns to land


Hectares

Hectares

Hectares
Hectares

Hectares


Hectares

Hectares


Cow units

Head

Man-days
Man-days


7.3



4.4
1.8


.7

3.4

289.1
102.0


.5

2.5

288.8
105.2


Pesos 36,611 33,397
Pesos 119,635 123,005


Pesos
Pesos

Pesos

Pesos

Pesos
Pesos
Pesos


5,157
61,057

19,981

7,527

1,658
1,530
5,361


4,124
59,896

20,468

5,273

2,065
1,578
5,512


aInterest rate of 9 percent on crop and livestock
and 11 percent on machine capital.


operating capital


blnterest rate of 12 percent on crop and livestock operating capital
and 14 percent on machine capital.
cInterest rate of 15 percent on crop and livestock operating capital
and 17 percent on machine capital.
dInterest rate of 18 percent on crop and livestock operating capital
and 20 percent on machine capital.


1.0


1.1


2.6


289.1
110.2

34,264
126,375

3,741
61,332

20,987

5,399

2,630
1,653
5,663


294.0
111.1

35,209
129,745

4,755
62,869

21,616

5,536

3,236
1,667
5,814







56


Appendix Table 18.--Minimum land required to produce a net farm income of
15,000 pesos on average quality land with average
yields and variable costs of hired labor, Cordoba II
Project, Lower Sinu River Valley of Colombia

Level of hired labor cost
Item Unit 15 pesos 17 pesos 19 pesos
man-day man-day man-day

Total land in farm Hectares 3.9 3.9 3.9
Total land utilized Hectares 3.9 3.9 4.1
Corn (partially
mechanized) Hectares .4
Cotton (partially
mechanized) Hectares 2.4 2.4 2.2
Rice (mechanized) Hectares .3 .3 .3
Rice (partially
mechanized) Hectares .7 .7 .7
Para pasture (best
managed) Hectares .5 .5 .5
Livestock
Beef cows (best
managed) Cow units .4 .4 .4
Purchased fatten-
ing bulls Head 1.9 1.9 1.9
Operator and family
labor Man-days 282.5 282.6 291.5
Hired labor Man-days 8.7 8.8 0
Total operating
capital Pesos 18,778 18,810 18,846
Land investment Pesos 65,715 65,715 65,715
Other investment
capital Pesos 2,891 2,891 2,906
Total income Pesos 33,389 33,438 33,439
Crop operating ex-
penses Pesos 10,393 10,410 10,558
Pasture beef oper-
ating expenses Pesos 4,116 4,122 4,126
Annual interest on
operating capital Pesos 804 811 810
Hired labor expenses Pesos 131 150
Returns to land Pesos 2,945 2,945 2,945


aBecause the corn enterprise is a double crop during the year, the
total land utilized exceeds the total land in the farm.











Appendix Table 19.--Minimum land required to produce a net farm income of
25,000 pesos on average quality land with average
yields and variable costs of hired labor, Cordoba II
Project, Lower Sinu River Valley of Colombia

e LLevel of hired labor cost
Item Unt 15 pesos 17 pesos 19 pesos 20 pesos
man-day man-day man-day man-day


Total land in farm Hectares
Total land utilized Hectares
Corn (partially
mechanized) Hectares
Cotton (partially
mechanized) Hectares
Rice (mechanized) Hectares
Rice (partially
mechanized) Hectares
Para pasture
(beef managed) Hectares
Livestock


7.2
7.2


7.2
7.7a


7.1
7.1


4.3
1.7


1.0


7.2
9.5a


2.2
1.6


1.0


Beef cows (best
managed)
Purchased fatten-
ing bulls
Operator and family
labor
Hired labor
Total operating
capital
Land investment
Other investment
capital
Total income
Crop operating
expenses
Pasture and beef
operating ex-
penses
Annual interest on
operating capital
Hired labor expense
Returns to land


Cow units

Head


Man-days
Man-days


Pesos
Pesos

Pesos
Pesos

Pesos


Pesos

Pesos
Pesos
Pesos


3.5


289.0
102


289.1
104


36,611 36,982
119,635 121,320


5,157
61,057

19,981


7,527

1,658
1,530
5,361


5,167
61,632

20,180


7,598

1,650
1,768
5,436


313.1
81.9


385.0
0


37,377 37,643
121,320 121,320


5,215
62,096

20,735


7,663

1,706
1,556
5,436


5,350
61,874

22,086


7,669

1,683

5,436


aBecause the corn enterprise is a double crop during the year, the
total land utilized exceeds the total land in the farm.










Appendix Table 20.--Minimum land required to produce a net farm income of 15,000
pesos on average quality land with average yields and
variable prices of cotton, Cordoba II Project, Lower
Sinu River Valley of Colombia

Level of gross revenue from
cotton per hectare
Decrease No
Basic 500 pesos Cottona

Total land in farm Hectares 3.9 4.3b 4.6b
Total land utilized Hectares 3.9 4.6 7.4
Corn (partially
mechanized) Hectares .8 5.6
Cotton (partially
mechanized) Hectares 2.4 2.2
Rice (mechanized) Hectares .3 .4 .4
Rice (partially
mechanized) Hectares .7 .6 .8
Para pasture (best
managed) Hectares .5 .6 .6
Livestock
Beef cows (best
managed) Cow units .4 .4 .5
Purchased fatten-
ing bulls Head 1.9 2.1 2.2
Operator and family
labor Man-days 282.5 302.1 298.8
Hired labor Man-days 8.7 0 0
Total operating
capital Pesos 18,778 20,892 24,640
Land investment Pesos 65,715 72,455 77,510
Other investment
capital Pesos 2,891 3,018 3,780
Total income Pesos 33,389 35,438 39,094
Crop operating ex-
penses Pesos 10,393 11,811 14,655
Pasture and beef
operating ex-
penses Pesos 4,116 4,512 4,871
Annual interest on
operating capital Pesos 806 868 1,095
Hired labor expenses Pesos 130
Returns to land Pesos 2,944 3,247 3,473


aWhen gross revenue per hectare is reduced beyond 500 pesos from the
basic value, no cotton enters the optimal enterprise organization.
bBecause the corn enterprise is a double crop during the year, the
total land utilized exceeds the total land in the farm.











Appendix Table 21.--Minimum land required to produce a net farm income of
25,000 pesos on average quality land with average
yields and variable prices of cotton, Cordoba II
Project, Lower Sinu River Valley of Colombia

Level of gross revenue from
cotton per hectare
Item Unit Decrease Decrease No
Basic 500 pesos 1,000 pesos cotton


Total land in farm
Total land utilized
Corn (mechanized)
Corn (partially
mechanized
Cotton (partially
mechanized
Rice (mechanized)
Rice (partially
mechanized
Para pasture (best
managed)
Livestock
Beef cows (best
managed)
Purchased fatten-
ing bulls


Hectares 7.1
Hectares 7.1


Hectares

Hectares

Hectares
Hectares

Hectares

Hectares


4.3
1.7

.1

1.0


7.6b
10.1


2.2
1.7

.2

1.1


8.0
12.0


.8
1.7


Cow units

Head


Operator and family
labor Man-d;
Hired labor Man-d
Total operating
capital Pesos
Land investment Pesos
Other investment
capital Pesos
Total income Pesos
Crop operating ex-
penses Pesos
Pasture and beef
operating expenses Pesos
Annual interest on
operating capital Pesos
Hired labor expenses Pesos
Returns to land Pesos


ays
ays


289.0
102.0


395.1


396.7


36,611 39,681 42,772
119,635 128,060 134,800


5,157
61,057

19,981

7,527

1,659
1,530
5,360


5,461
63,856

23,336

8,053

1,729

5,739


6,162
66,889

25,572

8,419

1,858

6,040


aWhen gross revenue per hectare is reduced beyond
basic value, no cotton enters the optimal enterprise


1,000 pesos from the
organization.


bBecause the corn enterprise is a double crop during the year, the
total land utilized exceeds the total land in the farm.


8.0b
12.9
2.0

7.8


3.9


372.5


44,105
134,800

6,221
68,212

26,696

8,499

1,977

6,040







60


Appendix Table 22.--Minimum land required to produce a net farm income
of 15,000 pesos on average quality land with average
yields and variable prices of rice, Cordoba II
Project, Lower Sinu River Valley of Colombia


Level of gross revenue from
rice per hectare


Item


SDecrease Decrease
1,000 pesos 2,000 pesos


Total land in farm Hectares


Cotton (partially
mechanized)
Rice (mechanized)
Rice (partially
mechanized)
Para pasture (best
managed)
Livestock
Beef cows (best
managed)
Purchased fatten-
ing bulls


Hectares
Hectares

Hectares

Hectares


Cow units

Head


4.6

2.8


No
rice


4.7


1.3


.4

2.0


Operator and family
labor Man-days
Hired labor Man-days
Total operating
capital Pesos
Land investment Pesos
Other investment
capital Pesos
Total income Pesos
Crop operating
expenses Pesos
Pasture and beef
operating expenses Pesos
Annual interest on
operating capital Pesos
Hired labor expenses Pesos
Returns to land Pesos


282.5
8.7

18,778
65,715


283.3
18.5

20,665
70,770


2,891 2,982
33,389 35,217

10,393 11,408


4,116

804
131
2,945


4,477

883
278
3,171


287.2
29.9

29,014
77,510

5,910
39,807

10,222

9,493

1,170
449
3,473


228.3
34.6

35,958
79,195

11,880
43,194

8,976

13,858

1,292
519
3,549


aWhen gross revenue per hectare is reduced beyond 2,000 pesos from the
basic value, no rice enters the optimal enterprise organization.


i


I Decrease Decrease










Appendix Table 23.--Minimum land required to produce a net farm income
of 25,000 pesos on average quality land with average
yields and variable prices of rice, Cordoba II
Project, Lower Sinu River Valley of Colombia

Level of gross revenue from
rice per hectare
Item Unit B Decrease No
Basc 1,000 pesos rice

Total land in farm Hectares 7.1 7.8 8.3
Cotton (partially
mechanized) Hectares 4.3 4.7 5.1
Rice (mechanized) Hectares 1.7 1.9
Rice (partially
mechanized) Hectares .1
Para pasture (im-
proved manage-
ment) Hectares 1.1 3.2
Para pasture (best
managed) Hectares 1.0
Livestock
Beef cows (best
managed) Cow units .7 .6 1.7
Purchased fatten-
ing bulls Head 3.4 2.7 8.1
Operator and family
labor Man-days 289.0 290.1 301.9
Hired labor Man-days 102.0 122.2 145.9
Total operating
capital Pesos 36,611 35,752 51,967
Land investment Pesos 119,635 131,430 139,855
Other investment
capital Pesos 5,157 4,763 11,342
Total income Pesos 61,057 61,856 68,254
Crop operating
expenses Pesos 19,981 21,835 15,931
Pasture and beef
operating expenses Pesos 7,527 5,613 16,823
Annual interest on
operating capital Pesos 1,658 1,686 2,044
Hired labor expenses Pesos 1,530 1,833 2,189
Returns to land Pesos 5,361 5,889 6,267


aWhen gross revenue per hectare is reduced beyond 1,000 pesos from the
basic value, no rice enters the optimal enterprise organization.




University of Florida Home Page
© 2004 - 2010 University of Florida George A. Smathers Libraries.
All rights reserved.

Acceptable Use, Copyright, and Disclaimer Statement
Last updated October 10, 2010 - - mvs