Lecture notes on Agricultural Production economics

how agricultural production can be increased, what is agricultural production management, how has technology increased agricultural production
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Published Date:21-07-2017
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LECTURE NOTE ON AGRICULTURAL PRODUCTION AND OPERATIONS MANAGEMENT (AED 606 and 610) BY PROF. NICODEMUS OCHANI AGBULU AGRICULTURAL EDUCATION DEPARTMENT UNIVERSITY OF AGRICULTURE, MAKURDI. 1 THE FARMER AND HIS MANAGEMENT FUNCTIONS At the outset the study of management has to be recognized that whilst farms must be planned and run on business lines, the biological nature of agriculture, together with an inherent variability and uncertainty, frequently requires decisions to be taken and implemented on the basis of incomplete information. However, it is important to obtain as much information as possible to increase the chances of success. THE PROCESSES OF MANAGEMENT Each farmer has effective for his business. Management is concerned with ensuring that these objectives are attained. Every business has three primary sources; capital, which is used to obtain other resources; land (including building), and labour. Supposed on these is what might be termed the key factor in management ability after identification of objectives, every farmer has to consider the organisation of his resources into a suitable plan. At each stage, he must take particular article of the amount of capital required and the possibilities of obtaining it. Neat the plan h as to be put into operation and managed; hence organisation and management is frequently used interchangeably. Once the plan is in operation, the results have to be recorded. These are then analysed and appraised to establish what they indicate. Such results could be used as a basis for control of the plan. The results must suggest that modifications are desirable to exploit strengths and remove weakness. Any changes have then to be put into operation it deemed appropriate. Sometimes minor amendments to the plan are insufficient to enable the business to comply with the objectives. It may then be necessary to undertake a complete replanning exercise for the whole farm. In practice, once the plan is operating most of the above processes are going on at the same time and are closely inter-related. These processes include: capital, land, labour, crop, stock and machinery. 2 Environmental factors which include physical, economic, political and sociological may influence management. To run a business effectively, an additional prices must be added. This involves forecasting both the performance of the management suggests and the influence of the environment. Thus; there are five main processes; (1) forecasting (2) Planning (3) Implementation (4) recording and (5) Controlling. Functions of Management The function of management is primarily concerned with the decisions making processes. The functions include: (1) Planning: Planning encompasses short and long term. This will guide the farmer in making divices in respect of what and how to produce. When the plan is operating, the farmer has to take tactical decisions in whoming things like timing of operations (e.g) sowing in relation to soil conditions, and time of year; techniques of operation, (e.g.) sowing method and depth of sowing; adjustments within production processes (e.g) fertilizer levels or concentrate usage; and adjustments of production processes, (e.g) if the price of bacon pigs falls relative to that of pork, the bacon producer may decide to change to pork production for a limited time. In essence, the farmer, having formulated his plan, has to put it into action. He has to control his resources and exercise his judgement to ensure that the production processes are carried out with a little function as possible between the different activities in the demand for resources at the one time and to ensure that production takes place to comply with the plan and the objectives for the business. (2) Financing: With regard to financing, at the planning stage it is necessary to examine all the sources of capital to decide how much capital is required, when it is wanted and which source should be used, how and when it has to be repaid. At the operation stage, the capital has to be deployed in 3 accordance with the plan and allocated to those activities which produce greatest benefit to the business. It is necessary to ensure that money is available to meet the demands for continuing production, to see that there is sufficient finance for living expenses, taxation and interest plus repayment of capital. At the same time the farmer must consider the future needs for capital to develop the business. The farmer lives to keep within his borrowing limits and he has to ensure that the capital is put to work effectively. This requires a great deal of skill in timing production and marketing to ensure hat money is available when required. (3) Marketing: Successful marketing both buying and selling is one of the key functions of management. At the planning stage it is essential to ensure that the markets are, and will remain, available. At this point cognizance must be taken of the type and quality of the product which is intended to produce. Consideration must also be given to the timing of sales. At the operational stage, it is necessary to make use of every opportunity to market to best advantage. Marketing contracts may be negotiated. Produce has to be selected for sales and presented in the right condition, when it is in demand, at the right market. Equal care has to be taken in the purchase of goods required for production. (4) Staffing: When planning, it is necessary to consider the number of staff required, the skills that will be necessary, the availability of workers, the degree of authority and responsibility which will be given to each person and the wages and conditions which will be provided. Once the plan is in operation, quite apart from managing his own time, the farmer has to direct the staff he has selected, supervise their work, keep them motivated and maintain good labour relations. It is essential to recognize that farm staff can markedly influence the results obtained from a farm. The farmer may do all his recording but many staff are motivated by monitoring the progress of the enterprises that they work with. After recording has been undertaken, the 4 point may arise when it is necessary to consider changes in strategy or tactics so that the business in complies with its objectives. THE FARMER AND MANAGEMENT SKILLS The Source of Management On many farmers the owner of the business, or the person who carries the ultimate risk, provides most of the management skills either as tenant of his own land or of some one else. On other farms management staff are employed but the amount of authority delegated to them differs enormously from business to business. The success of management is very much determined by the quality of judgement in relation to the decisions that have to be taken. It is this factor which separates the good farmer from the bad if they are working under similar conditions. OBJECTIVES Clear objectives must be formulated for a business if it is to have positive direction. Many factors influence their selection, and in practice, most farmers modify what may be their initial objective, that of long term profit maximization. Present and future requirements for the business, policies for developments, age and the provision for successors, attitudes to risk and uncertainty. Personal preference, knowledge, judgment and ability, tradition, status as owner occupier or tenants, taxation and many other factors may be relevant. The first need of every farmer is to provide enough money to live on after his expenses, including taxes and servicing costs of borrowed capital have been deducted from his income. Farmers with limited area of land may be forced to aim for high profits per hectare to justify this need. Those with large farms can place more emphasis on 5 return on capital and can consider less intensive systems. It must be realized that profitability per hectare is not synonymous with return on capital. Once the basic needs are satisfied, more considerations can be given to long term growth of the business. Farmers differ in their resolve to do this, and some accept management pressures which others would not consider. Occasionally, farmers adopt plans which reduce profits in the short term but in the long run produce greater benefits. A typical example could be the purchase of extra land, partially with borrowed money. The essential point is to avoid insolvency by ensuring that there are sufficient funds to finance current activities until the benefits from increased outputs arise. Farmers who have high rents or expensive mortgages and those with large amounts of borrowed capital from other sources, at high interest rates, have particular pressure placed upon them. They may have less opportunity to indulge some of their personal preferences than more fortunate colleagues on similar farms. Visitors to farms must take care in farming judgments about the farmer‟s policy and objectives unless they know all the circumstances. Whilst it is frequently good advice to put as much money as possible into productive units such as cows, there comes a time, which is not always at the point of absolute necessity, when it is judicious to invest in buildings and machinery according to the particular financial and taxation position. This must not be confused with situations where investment is more a matter of prestige to keep up with these leading farmers, and where the investment is not always justified. Care must also be taken not to over emphasise one‟s own attitudes when considering another person‟s objectives. A farmer who is happy with his situation and can remain viable should not necessarily be forced into the management difficulties which might be attendant to profit maximization. 6 DIFFERENCES BETWEEN FARMERS Caution is necessary when judging the respective merits of farmers. Clearly some have greater ability than others to take decisions and there are differences in their knowledge, willingness to research techniques, their ability to evaluate and innovate. Attitudes to risk and uncertainty can be an important factor in influencing decisions. When a farmer is planning his knowledge of the future is imperfect. Although the finite differences between risk and uncertainty can sometimes be a little vague, where enough observations of some thing happening can be made to establish the chances, in quantitative terms of it arising again, the situation falls within the realms of risk. There are different degrees of risk. Thus a car insurance company knows from statistic that a student is more likely to have an accident than his more mature lecturer and charges him a higher premium accordingly. Uncertainty refers to situations where the probable outcome cannot be expressed in quantitative terms. Some farmers are prepared to take greater risks than others. The rewards for taking risks can sometimes, but by no means always be high. The penalties for failure can be serves. Examples range from basic aspects such as “hey making in changeable weather to major capital investment. The reason why high risk activities may be very profitable is that not enough farmers are prepared to operate them and if their products are in short supply relative to demand, prices can be high. MANY FACTORS INFLUENCING ATTITUDES TO RISK The farmer with well-established business in which he owns most of the assets, and which is making good profits, might be considered to be in a better position to take chances than his colleagues who is new to farming, and who has not achieved the same sale of business and profitability. Some established farmers are guilty of following tradition and are reluctant to adopt new techniques until they are confident that they can assess the risks. They may therefore, miss the opportunity for increased profits, although in some 7 cases they will be wise to avoid a technique just because it is new. There are farmers who feel that in a changing world, there is little point in planning for the future. They claim that there is too much uncertainty about prices and the availability of resources, quite apart from the difficulty of predicting crop and animal performance to make it worthwhile. DIVERSIFICATION AND SPECIALIZATION To avoid risks involved in “putting all eggs into one basket” many farmers maintain a diversity of enterprises. They hope that if some thing goes wrong with the performance or product price of one enterprise, the others will be able to cover the losses. Some farmers also assert that they are justified in diversifying because they need to select a range of enterprises to suit the different types of land found on their particular farm. Others point to advantages interaction effects between enterprises which result in higher production. Examples quoted include improved land fertility, which may be derived from livestock using a grass-break in a cropping rotation, the use of arable by products to feed stock, and in other cases better weed, diseases and pest control. Claims are sometimes made that it is easier to plan labour on a mixed farm because the demands for staff by the different enterprises can be made to dovetail if care is taken at the planning stage. Specialization and simplification can result in the concentration of management and other resources such as labour on to a limited range of activities, perhaps with greater productivity because of attention to detail. Farmers who specialize do, however, have to accept the risk that if things go wrong heave losses can result. Marketing may be easier in specialized situations because not only will the farmer be able to devote more of his time to one product, but the quantities of goods he sells or buys will be target, with the result that he may be able to obtain better terms. 8 THE REAL SIGNIFICANCE OF MANAGEMENT The truth is that successful management depends very largely on personal experience for the formation of sound judgments. The part academic knowledge can play varies from situation to situation. Management should be regarded as a skill which utilizes a wide range of abilities. Students of agriculture will found that it requires and indeed is a logical combination of all facets of their course, whether it be the farm practical, the husbandry or science classes, or the management and economic studies. They will have to realize, however, that successful management principally depends upon the efforts and ability of the individual to utilize his experience to fully analyse and interpret situations. Knowledge of a few facts and techniques alone cannot do this. Many farmers without formal academic training are exceptionally good managers. Years of experience, a good training from father, innate ability, luck, personal research or self-teachings, use of advisers, and many other factors play their part. When farming enters a difficulty period survival may become a problem for some and such people may have to consider whether they should “sell-up” and take some money from the business whilst they can. Farmers with a lot of borrowed capital generally must be efficient even in “good times” but they can face special problems in bad times”. All farmers would be wise to stand back from time to time and look objectively at their businesses to assess not only the reasons for their present performance but also their future viability; and at the same time allow the farmer to have a more satisfying life. The principles and techniques of management will not take decisions for anyone, but if properly applied should provide sound guidelines which will not only give some idea of the risks involved in particular courses of actions but at the same time promote an increased number of correct decisions. 9 ENVIRONMENTAL FACTORS AND FORECASTING A farm business has to trade with agencies outside the farm gate and cannot operate in isolation. This means that quite apart from a consideration of the physical environmental factors of land, soil and climate, the farmer must consider economic, political and social influences that might affect agriculture and his business in particular. It is therefore, very important that farmers are fully aware of the factors affecting the agricultural industry. Supply and Demand In order to understand the full significance of the environmental factors, it is necessary to be aware of the inter relationship between supply and demand and the price of product. Here, the term „product‟ is used, but remember that one business product may become another business input e.g. barley sold for stock feed. It might be considered that he ideal price is that at which demand for a product equals the supply since that is the point at which price would be most stable. In practice, the amount demanded rarely equates with the amount supplied although, there are many forces which work to bring this about. In general, the demand for products increases as their price falls because people are prepared to buy more at lower price. By convention, the price is expressed on the vertical axis and quantity demanded at any given price long the horizontal axis (fig A) The supply of a product tends to rise as the price goes up because businesses are within to produce and sell more (fig B). If the supply and demand curves are now shown together, the point „E‟ (equilibrium) can be attained. This is the price which equates supply and demand (fig c). At prices above equilibrium (pe) surpluses develop due to supply exceeding demand, and at prices below (pe) shortages occur due to demand exceeding supply. 10 Supply and demand curves represent the change in amount supplied and demanded in response to a change in price. This type of change must be differentiated from a change in supply or demand caused by a movement of the demand or supply curve. The latter point can be illustrated by reference to a year which produces a poor cereal harvest, but is an average year for livestock. Assume that stock farmers are not prepared to alter their attitudes on the price that should be paid for barley. The aggregate demand curve for barley (DD) therefore remains the same (fig D). However, because of the poor harvest, total supplies of barley are lower. The supply curve (SS) for a normal barley harvest moves to the left and takes up the new position (S, S) shown by the dotted line. At this new position it can be seen that the price which equates the new supply and demand is pe2. Price pe2 is higher than pe, because cereal growers offer less barley than formerly or all price levels, whilst supply is less than demand, thus forcing prices upwards. As the prices stock formers demand less grain until or pe2 the amount demanded and supplied is in equilibrium. ALTERNATIVE FORGONE OR OPPORTUNITY COST It might be considered naïve to assume that in a time of shortage, the stock farmers would not be forced to change their attitude some what about the price they would pay for barley because their stock would still require to be fed. Remember, that many would look for alternative foods, some beef producers would adopt less-speedy methods of finishing, and others who forecast the increased price of barley might have reduced the number of cattle they bought or purchased barely in advance. Opportunity cost infact, is the alternative forgone. Dire quest for rice is the cost for not affording meat. 11 PRICE ELASTICITY The response in supply or demand to a change in price is called price elasticity. The percentage change in the quantity demanded of a given product relative to the percentage change in price gives a measure of its price elasticity of demand. If the percentage change in demand is less than the percentage change in the price, the demand is relatively inelastic i.e. “Ed‟ = more than I.O. When the percentage change in demand is bigger than that of the price, the demand is elastic, i.e. “Ed” = more than I.O. Question: What does this mean and how can it affect the farmer? Answer: Let fig (A) below show the demand for milk and fig (B) the demand for potatoes. If the price was to rise in each case from P to p , the response in 1 2 demand would be greater in the case of milk than potatoes, i.e. in (fig 1A) demand fall from Q , to Q units and in (fig iB) from Q to Q units. The different 1 2 3 4 in fall in demand between milk and potatoes is due to the difference in the slope of their demand curves. D P2 a P1 b O D O Q Q 2 1 Note the following pointers with reference to the demand for agricultural products. The demand for some products can be said to be a derived demand. This means that the requirement for them is derived from the demand for other 12 products (eg) the demand for feed barley depends upon the demand for beef, lamp and other livestock products. The increase in demand for agricultural products tends to be slow because of the pattern of spending on food by consumers. Significant increases in demand can come with increases in the population. Where there is elastic demand for a product, demand will increase markedly if the price rises. Where there is inelastic demand for a product, total revenue will increase if a supply shortage occurs. Inflation apart, there is a tendency for the price and demand for many products to remain fairly static. This encourages farmers to introduce new technology to raise yields to increase their incomes. Increased yields tend to produce surpluses, which tend to push down prices, so the farmers have again to increase yields to maintain or increase their incomes. This produces what can be described as the „feed mill syndrome” PRICE ELASTICITY OF SUPPLY AND DEMAND The price elasticity of supply can be explained in much the same way as that for demand. Basically, it deals with the way in which supply changes in response to an increase or a decrease in price. One factor to note is that in farming there is frequently a time lag between the change in price and the response because of the length of the biological cycle needed to produce the product. Another point is that a farmer has to take care before deciding to reduce his production because many of his overhead costs, such as rent, may still exist irrespective of his level of production. “SUBSTITUTION” Farmers substitute when prices of inputs rise. (eg) if the price of rice is high, the farmer could result to potatoes etc. 13 PERFECT AND IMPERFECT COMPETITION The farmer should know who his competitors are and be aware of their strength. One of the main conditions for perfect competition is that no one business is big enough to have an effect on the market on its own. When a limited number of businesses can market sufficient produce to influence prices, imperfect competition occurs, and if there is a single seller, a monopoly exists. There are big dangers for consumers from monopolistic types situation because sellers can dictate prices for products. The severity or the situation depends upon the possibility of using substitutes for the particular product and upon the ease with which new producers may begin to supply it if its price rises to a high level. Farmers must be aware of the development of monopolistic situations in the feeding stuff fertilizer and farm machinery industries. Their ability to prevent them occurring is limited. COMPARATIVE ADVANTAGE The law of comparative advantage states that “a product tends to be produced in areas where its ratio of advantage over other areas is higher, or its disadvantages are lower, than any other products. Physical factors such as soil type, topography, attitude and ultimate can be important in this context. Other factors are biological, proximity to market. The key factor is that each farmer must loose to see if he has any advantages which he can exploit. They may enable him to produce a bett4er products to produce it at less cost, to produce more of it, or to sell it at a higher price than his competitors. POLITICAL AND ECONOMIC FACTORS These two factors have so many inter-related facets when affect farming, either directly or indirectly that they can be considered together. It has to be realized that government at the national level represents the interests of all branches of 14 the community and not just farmers. However, the strength of the farmers political vote, i.e. the number of farmers who can vote at parliamentary elections relative to people in other walks of life, can have a remarkable effect on many politicians decisions. In some countries, farmers have to produce their goods to sell in a force market situation. This means that the laws of supply and demand are allowed to operate freely to influence the level of production. In other countries, politically inspired economic action is taken to modify the normal supply/demand forces. There is, however, little point in confirming the study of politics. FARMERS EXPERIMENTATION WITH CASSAVA PLANTING IN INDONESIA Farmers carry out their own experiments with crops. In fact, before the start of institutional agricultural experimentation, new developments in agronomic practices almost completely depended on experiments by farmers. Indonesian farmers are said to be good experimenters. A clear example is the development of the Mukibal system of cassava growing. The Mukibat system is name after its investor, Mukibat, a farmer from East Java. He found that budding or grafting of tree cassava (Manihot glaziovil) onto a stock of ordinary cassava (M. esculenta) can lead to very high yields of tuberous roots. Tree cassava is a perennial, often growth in East Java and other parts of Indonesia, with support from the Agricultural Extension Service. But the system was not generally accepted. In the first 20 years after Mukibat started with his work no systematic scientific research in to the agronomy and economic feasibility of the system has been carried out. Some experiments were carried out by the Agricultural Extension Service and by research institutes. However, many trials, often very inventive, have bee done by farmers. Some times in cooperation with the Extension Service. Publications were very scarce and written in Indonesia. A first description of the system in English was written by De 15 Bruijn and Dhamaputra (1974). In 1973 the Faculty of Agriculture, Brawuhata University, Malang, started a research project on the Makubat system, in cooperation with the Wageningon Agricultural University and supported y the Canadian International Development Research Centre, research results gave more insight into the possibilities of the system. In this paper a short description of the Mukibat system is presented, and some examples of farmer‟s initiatives in the development of the system are mentioned. The relevance of the system is considered and the necessity for studying the system further in close cooperation with farmers and researchers is discussed. The System According to villagers from Ngadiloyo, where Mukibat lived, Mukibat got the idea of combining tree cassava with ordinary cassava after following a course given by the Agricultural Extension Service in which participants had to do some individual grafting work. Though initially Mukibat budded the cassava tree onto the stock, grafting became more popular later on. Mukibat planted the budded cuttings in his farm yard on spots where organic mater had been put in the soil before planting. This creates a favourable situation for the cuttings to grow. At present the most common way of applying the Mukibat system is as follows: A scion of tree cassava, length 10-15cm, is grafted on a piece of stem of ordinary cassava, length 20-30cm, diameter 2-4cm, serving as a stock. Scion and stock, which have to be exactly of the same diameter, are cut slant wise. A thin piece of bamboo is put into the pith of both scion and stock to facilitate the connection, and both stem pieces are connected often with banana leaf fibre. The cuttings are put under shade and watered daily. After about 8 days sprouts start to grow. Sprouts are removed from the stock. When the sprouts from the scion are about 2cm long the grafted cuttings can be planted in the field. A hole normally is made before planting in which organic matter is mixed with the soil, after which the holes are filled up with soil and hilled up. The grafted cuttings, one per hill, are 16 planted in a vertical position. Plant care is rather similar to the way in which ordinary farmers protect their plants by supporting them with bamboo. Plant spacing is very variable, especially under intercropping conditions. But normally a spacing of 1.25m x 1.50m is quite common. The growing period may vary from 8 to 18 months; harvesting mostly takes place about 12 months after planting. More details about the system are given by De Bruijn and Dhamaputra (1974). Farmers Initiatives in the Development of the System It is impressive to see how many variation of Mukibat‟s original ideas have been developed by farmers, in cooperation with the Agricultural Extension Service or not. We mention a number of modifications developed during the first 20 years of application of the system. In various cases the physiological considerations in way farmers think are striking. Much attention has been given to the question of whether budding or grafting is to be preferred. Though the grafting method is currently the most popular budding is also fairly common. Budding is more difficult; its percentage of success is often very low. Alternative ways to make the scion-stock connection have been tried out in farm yards, like the one which was propagated as the „Kurkur‟ system (Kurniaatmadja, 1969). In this modification, cuttings of ordinary and tree cassava are planted separately. After 45 days young shoots of tree cassava are grafted on young shoots of ordinary cassava. For the scion material farmers distinguish original tree cassava stems and stems taken from a Mukibat canopy. It is not yet clear, however, whether the one is better than the other. Some farmers assert that the percentage of success from grafting can be improved by turning the graft units upside down for about five days, after which they are placed in the soil in normal position. Farmers found that after the first yield the grafted or budded cuttings can be replanted up to two or three times, on condition that the original stock is long enough. At the bottom end the stock is shortened by 5cm after harvest. The top end is cut at about 10 cm above the original scion. This method reduces the 17 effort of making planting material. It also eliminates the risk of breaking due to wind. Moreover, the yield from replanted cutting appears to be better, though roots may become too woody after using the same unit more than three times. In order to promote higher yield, farmers often try to increase the number of roots per plant by treating the bottom end of the cutting. This is done by cutting the end slantwise, by making a circular incision in the peel, or by splitting the cutting longitudinally by sawing in the centre up to about 10cm. The effectiveness of these methods is not known. Considering that the big tree cassava canopy is not in balance with the stock, Satrawl, another farmer experimenting in his backyard, managed to connect one scion of tree cassava with three stocks of ordinary cassava (Anon., 1973). This system is quite laborious and often fails. But the yield capacity is said to be higher than that of the normal Mukibat system. Satrawal plants produce more and smaller roots, and the stocks are some times taken from different varieties, both having its own specific flavour. Showing his skill, Satrawal even managed to make combinations of one scion with five and even seven stocks. Some East Javanese farmers even claim that by simple perforation of the pith of ordinary cassava cuttings by a long bamboo stick, i.e. without using any scion, the yield of tuberous roots can be increased. This is called the „Masduku‟ system. It has not been clearly proven whether it works or not. Farmers have developed other different modifications. In our opinion the development of methodology of the Mukibat system in about 20 years clearly shows a dynamic way in which farmers are managing and modifying their technology. Relevance of the System The relevance of the Mukibat system has often been subject to discussion. Though the system has been used for many years in different regions of East java, one may well wonder why it is not more widely used and expanding in other countries as well. East Javanese farmers sometimes use both the ordinary and 18 the Mukibat system at the same time. A clear and general answer to the question of its relevance cannot be given. However, the general adoption of the system in some villages proves beneficial to the farmers. It appears that its relevance depends on a number of tractors. We shall consider some of those. In the first place, one should consider that the inputs to the system are quite high, mainly due to the grafting work and the digging of planting holes and filing them with organic matter. Comparing Mukibat and ordinary cassava, Soemarjo Poespodarsono et al. (1976) found that the input and output per hectare of the Mukibat way of planting was Rp. 152,700 and Rp. 295,230 respectively, and those of ordinary cassava Rp. 72,550 and Rp. 192,840 respectively. Thus the benefit margins of the two systems do not differ much, though they vary from one region to the other. It should be noted however that most inputs are local and consist mainly of labour. They yield benefit of the Mukibat system is often not so high as is sometimes suggested. Though the yield per plant may become more than 100 kgs in some cases, on a hectare basis with normal densities, yield per plant is much less. Experiments at Brawijaya University indicated that under comparable conditions the yield increase the Mukibat system is about 30%, though increases of more than 100% are claimed in some reports (Sitomput et al. 1982). The relevance of the system is highly dependent on local conditions. The system is very popular for growing cassava on sandy soils along the river Brantas. Experiments have shown that during the long dry season in East Java the leaf area of Mukibat plants is much less reduced than that of ordinary cassava (Bambang Guritno et al. 1981). This may be so because of the perennial character of tree cassava, causing a much faster and deeper rooting system. Thus water, and plant nutrients would be more available for Mukibat plants than for ordinary cassava plants. Farmers often use the Mukibat system to increase the yield of varieties with low production capacity but good taste. Research indeed indicated that the yield benefit in low yielding varieties is higher than that in high yielding varieties. 19 Conclusions: It is evident that under certain conditions the Mukibat system is beneficial for farmers. However, it is not quiet clear which considerations make farmers adopt or reject the system. There are still many open questions. Answers could be found by further study of what is more attractive or feasible for farmers. One labour intensive factor is the grafting work. The development of a simple grafting machine could reduce labour inputs. Another labour intensive factor is the holes digging. Research indicated that digging holes is not absolutely necessary; the application of organic matter in combination with normal soil cultivation is sufficient (Bambang Guritno et al., 1981). In our opinion further study should be carried out in close cooperation with farmers who have ample experience with the Mukibat system, thus mainly by on-farm experimentation. Intensive participation by farmers into further study of a system which they mainly developed themselves seems to be more than logical. Researchers, however, are in a position to compare experiences from different farmers and from different regions. A good interaction of activities of farmers and researchers certainly could help to bring more light in the complexity of the system. References: Anonymous, 1973 Ketela pohon „Satrawal. Issued by Dinas Pertanian Rakyat Malang. Bambang Guritno, S.M. Sitompul, Soemarjo Poepodarsono and Soetono, 1981. Casava Research Project. Progress Report X (Final Report). Faculty of Agriculture, Brawaijaya University Malang. De Bruijn, G.H. and T.S. Dharmaputra, 1974. The Mukibat System, a high yielding method of cassava production in Indonesia. Neth. J. Agric. Sci. 22:89- 100. 20

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