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MAY 2011 This publication was produced for review by the United States Agency for International Development. It was prepared by Weidemann Associates, Inc.
Contracted under TO-OAA-10-00017 Task Order 32 Work Assignment 05 Energy in Agriculture and Food Security
DISCLAIMER The authors views expressed in this publication do not necessarily reflect the views of the United States Agency for International Development or the United States Government.
CONTENTS
Executive Summary...............................................................3 SECTION ONE: INTRODUCTION................................................8 SECTION THREE: ENERGY IMPACTS ON INDIVIDUAL CROPS.....16 SECTION FOUR: RENEWABLE ENERGY....................................34 Recommendations............................................................................................38
ACKNOWLEDGEMENTS
The study team gratefully acknowledges the assistance received from all the individuals without whom this study would not have been possible. In particular Jeffrey Humber, Senior Energy Advisor and Andrianne Konstas of USAID/AFR/SD/EGEA are thanked for being principle advocates of this work and providing instrumental and valuable guidance in the development of the analysis and the final report. Barry Schaeffer is appreciated for his research and analytical work on agriculture production as well as his contributions to the text. The Weidemann Associates, Inc. Team included Wes Weidemann, James Hochschwender, Paul Fengler, and Lillian Rosen.
EXECUTIVE SUMMARY
This Desk Study examines the potential of energy including renewable energy -- to improve the productivity of African agriculture, and in so doing, transform the lives of millions of people living in poverty. As demonstrated by this study, increases in the use of renewable energy in agriculture, even in small increments, could support distressed populations in feeding themselves and raise living standards without the negative effects of fossil fuel. USAID currently has two major ongoing initiatives: Feed the Future (FTF) and Global Climate Change (GCC). The objectives of FTF are to address the root causes of hunger that limit the potential of millions of people, improve agricultural productivity and output, increase farmer incomes, increase competitiveness and regional trade. A key pillar of the GCC program is the advancement and promotion of clean energy technologies which promotes the use of renewable energy technologies supports national energy independence, stabilizes energy and fuel prices, and supports low emission economic growth. Close coordination between the FTF and GCC programs has the potential for significantly increasing agricultural productivity and constitute an exciting new direction in development. The urgency could not be greater, especially since agricultural food production in Africa has actually fallen 10 percent since 1960.1 The goals of this Desk Study are to: 1) identify and define major strategic linkages between energy and links in the food production chain; 2) highlight to USAID Washington and Mission management that this relationship exists and can have a beneficial impact on their achieving their FTF objectives, and 3) through for further investigation more clearly identify this role and possible opportunities for future forms of USAID program support.2. To accomplish the first goal, this study investigates the importance, role, and relationship of energy to the development of modern agriculture. Secondly, and more critical to the argument, the study establishes the potential impact of energy on Africas agricultural sector. Africa lags significantly behind the rest of the world in agricultural productivity. For example, rice yields in Africa average 1.4 MT per hectare versus Asias average of 4 ton/ha and Chinas more than 6 ton/ha. In addition, as much as 50 percent of horticultural crops rot because of the lack of processing to convert produce into a storable, marketable form. To demonstrate these impacts and identify opportunities for effective USAID support, this Desktop Study undertook a quantitative analysis, examining both the base line and energy-supported steps of prevalent African agricultural value chains. The farm products examined were rice, corn (maize), milk and tomatoes (horticulture). For each product, three main levels of farming systems were examined: traditional, smallscale mechanized and modern. Partial crop and enterprise budgets were developed for each type of farming, using traditional methods as the base case and semi-mechanized as the improved case. Modern agricultural budgets are included to illustrate both the potential and the distance between Africa and the developed world. The third goal, a course of action, supposes the feedback of others as well as additional, more detailed research into the preliminary findings of this study. Next steps include a more in-depth attempt to identify
1 2
The New Harvest: Agricultural Innovation in Africa, Calestous Juma, Oxford University Press December 2010. It should be noted that this study represents only an initial survey that highlights the role that energy plays in agricultural and food production processes, and it is not meant to be a comprehensive analysis nor statement of this relationship. More information regarding this relationship will be discovered in future work. The Importance of Energy in Agriculture and Food Security 3
and maximize the synergies that can exist between FTF and GCC through a review of relevant experience both within and outside of USAID. The proposed detailed report would identify and rank possible interventions according to impact.
Modern agriculture systems, with modest increases in energy usage, have allowed the majority of the developed countries to provide food and fiber with only 2 -3 percent of the population engaged in production agriculture. The American farmer in 1940 could feed 20 people. Today, with increased and more efficient energy utilization, that capacity has grown to 156 people. The internal combustion engine and the rapid expansion of electrical grids to rural areas facilitated the tremendous achievements in agricultural production and marketing. In modern agricultural systems, machines have largely replaced humans in the production equation, and a persons role now is to allocate capital to its most productive advantage.
It is largely due to increased and improved utilization of energy that land productivity in the U.S. has increased 3.6 times while labor productivity has increased 18 times since the turn of the twentieth century. Thus U.S. agriculture today produces 65 times more product per acre for the same amount of time invested. In 1900 it took 36 hours of work to plant, harvest and process one acre of corn. Today just three hours are required. We may draw two main conclusions: By effectively utilizing energy, agricultural productivity increases dramatically, and a little bit of mechanized energy input goes a long way.
the difference it allows a better quality of product, higher yields and more revenue for any given hectare (or dairy farm) harvested. This study also found much promise in substitution of renewable energy where fossil-based energy sources are currently in use. The first major finding is that many of the renewables are already lower cost and more reliable sources of energy than fossil-based power. The second is that the opportunity to replace polluting fossil fuel with more climate friendly technology already exists and is financially and economically feasible. At the same time, switching to clean energy technology will reduce the negative impacts that volatile and rising oil prices have on food costs. Thus, renewable energy is versatile and more reliable in allowing remote communities the benefits of off-grid energy.
types of renewable energy could be highly competitive, 3) opportunities for cost-effective fuel substitution, 4) the utilization of farm wastes and cogeneration, 5) the utilization of multi-functional energy platforms, and 6) possible uses of bio-energy fuels. Also, this task might weigh the costs and benefits of electrifying central rural processing centers as opposed to supporting specific renewable energy opportunities on individual farms. Develop The FTF and GCC programs are poised to make a remarkable difference in Africa. The recommendations enumerated here are first steps in facilitating the adoption of energy-based systems that will improve productivity, quality, lower losses and better storage, and marketing.
Many factors affect food prices, including energy costs, weather, political instability, changing trends in demand, and the host of actors who touch food as it goes from farms to mouths. As Figure 2 illustrates, there has been a steady increase in oil prices since 2000, with price spikes related to the unrest within oil producing countries, most recently in Libya, and the rapid economic ascension of the two largest populations in the world India and China. The net result is ever-increasing fossil fuel prices. The impact of increases in the price of fuel on food prices varies significantly. At the farm gate the effect of rising energy prices lags since most farm inputs are produced up to a year ahead and purchased six to nine months in advance. However, further into the food value chain, energy price increases are felt immediately. The energy needs of food processing are both more intensive and more immediate than at the farm gate. For example, beef, poultry, and milk must be processed, transported, and refrigerated immediately to maintain shelf life. To maintain quality, most fruits and vegetables have to be kept in some type of interim cold storage or be processed immediately (dried, cooked, or pasteurized) to maintain quality. Finally, there are the transportation costs to deliver the product from the farm to the warehouse or processing plant and then to retail centers. The immediate impact on the agriculture supply chain of an increase in fuel prices is felt every time a trucker pulls his rig into a gas station. Although farm gate prices rise slowly in response to increasing energy costs, the price of food rises quickly due to downstream requirements for energy.
There is little doubt that Africa needs substantial assistance to produce, process, and deliver more food and more energy to consumers. Typically, traditional assistance programs have focused on either agriculture or energy, ignoring the role energy plays in agriculture. This is understandable given that energy projects most often focus on urban areas with concentrated populations while on the other hand, agricultural development projects are aimed at less densely populated rural areas where both electricity and fuel are scarce. In simple terms the paths of these two kinds of projects rarely cross. As a result the agriculture projects have often worked to expand production within the confines of a more limiting economic environment where energy alternatives such as solar, small hydro, and wind are undeveloped and overpriced. This situation is shifting as increasing oil prices have brought world focus to alternative energy. In turn, the economics of oil has both brought the price of renewable technology down and improved the technology to the point where it is now becoming commercially viable. In an attempt to maximize the effectiveness of its approaches, USAIDs Africa Bureau, through the RAISE Plus Set Aside IQC Task Order #32 Agricultural Knowledge and Program Support (AKPS) initiated this investigation into the links between energy and agriculture. The objective of this study is to research and document the connection in modern agricultural development between energy and agriculture and to examine other potential patterns of energy consumption available to Africans. Toward that end, this study describes and quantifies, to the extent possible, the importance of energy in agriculture at three distinct levels: traditional, small-scale mechanization, and modern technology. It also tries to quantify the effects of energy on production and on efficiency of food and fiber and to provide a concrete framework for further exploration of how the introduction of energy could improve agricultural production, food security, and the welfare of poor people in Africa.
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While Figure 3 illustrates the increased productivity of American farmers, what is not evident is that the quality, variety, and convenience of food is improved to the consumer as well. These increases and improvements are due to the introduction and expansion of energy within the food production value chain system. The question that remains in this success story is how it was achieved.
FIGURE 4: Plowing with Horses circa 1930 FIGURE 5: Plowing with Tractor circa 1990 In 1930, a man with two horses and a single bottom plow could cultivate an estimated three acres working a ten-hour day (Figure 4). Today, a man driving a 760 hp tractor pulling a 32 bottom plow can cover more than 250 acres a day, expending around 150 gallons of diesel fuel (Figure 5). Additionally, changing the tillage equipment from a plow to an eighty-foot-wide chisel plow increases the acreage to up to 900 acres a day. Such impressive achievements in efficiency could not have been achieved without the transformation of fossil energy into work. Gains to efficiency due to energy utilization are not limited to the fields. Modern poultry, pork, beef, and dairy farmers utilize electricity to improve the health and productivity of their farms. The change in the technology for milking cows is one example. Prior to the availability of electricity in rural areas, dairy farmers performed the task by hand (see Figure 6, below). This labor intensive, slow, and tedious process severely limited production capacity to the number of pairs of hands available to perform the task morning and evening, which takes twelve to twenty minutes per animal. Thus prior to the widespread use of electricity and modern milking equipment, a farm would be limited to eight to ten cows, requiring one person to spend two hours, twice a day, on milking.
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Figure 7 illustrates the modern milking methods that became possible with the widespread availability of electricity. Pictured is a modern thirty two stall herringbone milking parlor. Most striking is the sheer size of the operation. The step-by-step efficiency that electricity introduced to the dairy industry is astonishing. First, the milking machine reduces the time to milk a cow from up to twenty minutes to five. Second, the introduction of automatic take-off units allows the operator to manage upwards of thirty two cows, whereas four would be the maximum an operator could manage without such sensing devices. Thus, with capacity of this magnitude, the farmers individual labor is no longer the factor limiting how many animals he can effectively manage.
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Source: Energy Use in Agriculture: Background Issues (Congressional Research Service) November 19, 2004.
The major point is that energy costs represent approximately 14.7 percent of total farm expenses. Direct costs include fuel and electricity, which account for 5.2 percent of total expenditures, while indirect costs, such as fertilizers and chemicals, account for 9.5 percent. From a farmers standpoint, a 10 percent rise in the cost of energy directly increases total operating costs by 1.5 percent. The food value chain cost breakdown by function in Figure 8 below allows us to determine where changes in energy prices have the biggest effect on the retail price of food. FIGURE 8: DISTRIBUTION OF A DOLLAR SPENT ON FOOD
13
Source: Energy Use in Agriculture: Background Issues (Congressional Research Service) November 19, 2004.
As Figure 8 illustrates, for every dollar spent by a consumer, the farmer receives 19 cents (19 percent). Examining the food value chain further we see that packaging, transportation, and energy, which are sensitive to energy price fluctuations, represent 15.5 percent of the cost of food delivered. Thus, a 10 percent change in energy prices could impact food prices by 1 percent or more almost immediately. Whereas an increase in energy prices does not translate into an immediate increase in the farm gate price for food that farmers receive, the higher final cost due to increases in energy prices comes from increases further down the value chain.
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International Perspective
In the context of world food and fiber production, energy is a prerequisite to achieve both maximum and efficient production. Almost every production operation in modern agriculture either requires energy directly such as the operation of modern tractors and equipment for drying commodities for storage, or indirectly such as the electricity used to operate various motors and the electronic equipment needed in food processing or for the production of inputs like the fertilizer and chemicals that allow todays farmer to produce abundantly. FIGURE 9. ENERGY IN THE DEVELOPMENT PROCESS
Figure 9 illustrates the strong correlation between the per capita use of energy and food production. Clearly, the more energy a society expends, the more food is available for the population to consume. With more food available, the living standards and health of the population can improve. Looked at from a different perspective, the more that is spent on energy, the more developed an economy becomes. Figure 9 also illustrates that where almost no energy is expended, food production reaches a meager 2,000 calories per day per person. Without energy, populations fail to meet their basic human needs for food.
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Rice Production
Importance
When all developing countries are considered together, rice provides 27 percent of the dietary energy supply and 20 percent of dietary protein intake. Rice cultivation is the principal activity and source of income for millions of households in Asia, Africa, and Latin America. In addition, over the last decade, rice has become the most rapidly growing food source in Sub-Saharan Africa and the region has had to increase rice importation to satisfy demand. Given the demand for rice, the question remains: Why are rice yields in Africa the lowest in the world? 1.4 ton/ha compared to Asias average of 4 ton/ha and Chinas more than 6 ton/ha. The simple answer is that Africa lacks the investments in energy needed to improve rice yields. Fertilizer use in Africa is less than 10 percent the world average. Fertilizer costs in Africa are two to six times the average world price due to both the cost of importing and transporting the bulk commodity. In Africa rice production is dominated by smallholder farmers who have no equipment other than hand-held tools, make limited use of inputs like fertilizer, and have limited access to markets. Many are subsistence farmers with energy resources insufficient to pull themselves out of poverty. According to USAIDs Global Food Security Response for West Africa, In both Liberia and Ghana, lack of reliable electricity is a major constraint for [rice] milling that must be addressed before investing in new milling infrastructure. During periods of high diesel prices, rice mills in many rice-growing countries such as the United States, Thailand, India, and China have adopted technology that converts rice
16
husks to energy as a substitute for diesel fuel.3 There is no technical reason to prevent many areas of Africa from adopting a model for rice and other grain mills using rice husks or similar wastes as fuel for cogeneration plants to provide electricity and drying heat.
Modern Farming
In the rice farms of the southeastern U.S., the steps are almost the same as found in Africa; however, the magnitude of what becomes possible with modern mechanization is staggering. The fields are plowed with a 200 hp tractor pulling a 12 bottom plow, disked by the same tractor pulling a 30 foot-wide leveling disk, planted with a grain drill that ranges from 12 to 30 feet, harvested by a combine that travels six to seven mph with a 30-foot platform, cutting, threshing, and cleaning the grain in one operation, with the grain loaded on a truck that can haul 22 tons. As for irrigation, two different forms exist: flooding and sprinkler system. Each can cover upwards of 160 acres at a time. Drying is normally performed within a
3
processing plant that can dry and polish 4,000 tons of rice a day and store it in bulk or package it for distribution.
Quantitative Assessment
Appendix 1 Table 1.1 contains the summary budget analyses of energys impact in each step of the rice production process. Table 2 below summarizes the major findings. There are two lessons borne out by the findings. The first is the dramatic increase in productivity that results from the introduction of energy to the production and processing system for rice. The second is the additional return in revenue that energy produces for each hectare that is cultivated. Table 2 indicates the steps in rice production and processing that could be influenced by energy introduction. Using one function plowing as an example, using traditional farming methods it takes five days to plow a hectare with no out-of-pocket energy costs. By introducing the walk-behind tractor, the time required is reduced to two days and requires the expenditure of $10.94 in energy costs. The gain in productivity from energy would be 2.5 times over manual methods. The first of two significant points to note is the overall efficiency gained by the introduction of mechanization. The line Total in Table 2 indicates that processing a hectare of rice using traditional methods requires 61 manual labor days. With the introduction of a very low level of energy, the total drops to just seven days. The gain in efficiency from semi-mechanization is nine times over traditional methods. The total cost to achieve such dramatic gains is $74.42, and that is valuing the energy at very high levels of 70 cents per kWh and $1.76 per liter ($6.70 per gallon) of fuel. These dramatic increases in productivity allow an individual to manage more land or more intensely manage the same ground. Using modern agriculture the increase in efficiency over manual labor is 338 times. In simple terms this means that 338 hectares can be farmed using modern methods in the time it takes a farmer using traditional methods to farm only one hectare.
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19
Phase
Unit
Traditional 1
Modern
Yields
Kg Per Hectare
3,245
6,453
Plowing Days per Hectare Cost of Energy (US$ per Ha) Increased Productivity over Traditional Planting Days per Hectare Cost of Energy (US$ per Ha) Increased Productivity over Traditional Harvesting Days per Hectare Cost of Energy (US$ per Ha) Increased Productivity over Traditional Threshing Days per Hectare Cost of Energy (US$ per Ha) Increased Productivity over Traditional Winnowing Days per Hectare Cost of Energy (US$ per Ha) Irrigation Days per Hectare Cost of Energy (US$ per Ha) Drying Days per Hectare Cost of Energy (US$ per Ha) Fertilizer Total Days per Hectare Cost of Energy (US$ per Ha) Increased Productivity over Traditional 61 7 $40.30 9 0.2 $56.30 338
4
5.0
2.0 $10.94 2.5 0.7 $6.25 21.4 1 $10.94 40.0 0.2 $1.00 18.5
14.3
20.0
4.0
10
Economic Analysis Value of Human Labor Days Per Hectare Labor Value Per Day Total Labor Cost Per Hectare Revenues Per Hectare Price Per KG Total Revenue Per Hectare Labor and Energy Cost Per Kg Produced Revenue Per Dollar of Energy Invested
1 2 3 4
61 $1.00 $61.29
7 $2.00 $13.68
African Rice Center (http://www.warda.cgiar.org) Appendix 8. University of Arkansas Extension Service, Crop Budgets (http://www.aragriculture.org/crops/rice/budgets) Total fertilizer cost times the assume energy component of 25%.
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A second and equally important aspect is the Return on Investment in Energy. At the bottom of Table 2 is the calculation Revenue per Dollar of Energy Invested. For the semi-mechanized version of African agriculture, for every $1.00 invested in energy, $16.10 of additional revenue is generated.
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(a)
(b)
(c)
(d)
(e)
(f)
Energy
Unit
Diesel fuel for tractor operation Electricity for the mill Diesel used in transport (50 km) Drying paddy Total energy cost per ton rice Percentage of world price of rice per ton
U.S. gallon kWh (purchased) kWh (selfproduced) U.S. gallon U.S. gallon diesel Kg of rice husk
Ton
$500
11.9%
4.9%
(2) RE costs assume mill builds its own cogeneration plant and internally allocates cost of electricity as $0.15/kWh, a typical value for this type of plant.
Corn Production
Importance
By the last decade of the twentieth century, a tidal wave of corn (maize) had engulfed African production. Corn has supplanted historical African food grains like sorghum, millet, and rice within basic diets except in the driest of years. In southern Africa maize has become the most important staple, accounting for more than 50 percent of calories in local diets; in Malawi alone, maize occupies 90 percent of cultivated land and supplies 54 percent of Malawians total calories. TABLE 4: CORN PERCENT OF DIET VARIOUS COUNTRIES
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Source: McCann, James. Maize and Grace: History, Corn, and Africas New Landscapes (Society for Comparative Study of Society and History), 2001.
According to Table 4, Zambia has the worlds highest percentage of maize consumption in the national diet (58 percent of total calories). In South Africa, maize comprises 60 percent of all cereal crops planted and 40 percent of total calories consumed. Moreover, the top three countries on this list are all in Africa (Zambia, Malawi and Lesotho), and surpass even Guatemala and Mexico, the homeland of maize. In East Africa, maize accounts for 30 percent of all calories.
Mechanized Farming
As with rice, the introduction of energy power opens a whole range of possibilities to increase production and efficiency. There are five main steps in corn production where a direct power source would enhance
The Importance of Energy in Agriculture and Food Security 23
production. The first is seedbed preparation when the ground is plowed to loosen the soil and allow moisture to penetrate more easily. It also turns the residue of the previous crop under the soil for decomposition. The second stage for intervention would be planting. Corn seeding lends itself to mechanization as maximum production is achieved by precise spacing of the seeds. The third step where introduction of energy would mean major gains is harvesting and the ability to transport large quantities faster to the grain separation process. Although mechanical harvesters are available and have been since 1850, these machines are very large and expensive and do not lend themselves to small-scale agriculture. The fourth step would be the introduction of mechanical threshers for grain separation from the cob. The fifth step is the introduction small grain mills for the grinding of the grain into flour. The addition of fertilizer (mainly nitrogen) also represents the introduction of energy to the process, albeit less directly. Corn is very responsive to nitrogen, and small applications of 50 to 100 lbs. of urea per acre dramatically increase yields.
Modern Farming
The steps in modern farming of corn are very similar to those in traditional agriculture, but the scale of U.S. large-scale commercial farming that we see in the Midwest is unparalleled. In places like Iowa, Nebraska and Illinois, states famous for the amount of corn produced per acre and in total, fields are plowed with a 200 hp tractor pulling a 12 bottom plow, planted with a machine ranging from 16 to 32 rows (40 to 80 feet wide), and harvested by a combine that travels 6 to 7 mph with 16 to 32 rows processed at once. The combine threshes and cleans along with cutting as a single process. The grain is hauled by a truck or grain cart that hauls 22 tons at a time. The dryers can process 2,400 bushels an hour to be stored in grain bins reaching 66,000 bushel capacity.
Quantitative Assessment
Table 5 below summarizes the major findings of Appendix 1 Table 1.2, which provides budgets for and analyzes the impact of energy in each step of the corn production process. Once again there are two main conclusions to be drawn from the findings. First, introduction of energy in the production and processing systems results in increased productivity, and second, for each hectare that is cultivated using energy, there is an additional return in revenue. As with Table 1.1 relating to rice, each function of the production process is analyzed according to productivity as well as the cost of energy to improve the efficiency of the function. Modern technology is included mainly as an illustration of the potential. What becomes clear in examining Table 5 are the various steps in corn production and processing that can be made more efficient through the introduction of energy. These include plowing, planting, harvesting and threshing. Although drying methods are utilized in the U.S., the traditional method of storing corn in an open air crib works quite effectively for the quantities produced even with an expanded level of production. Implied in the yields is the use of fertilizer. Mechanization again plays a leading role in increased production. The line Total in Table 5 provides the essential information on the potential to improve African corn production. To process a hectare of land for corn using traditional methods requires 35 process days. With the introduction of a very low level of energy, the total drops to just four days a gain in efficiency of 9.5 times over traditional labor intensive methods. In fact, the total cost to achieve such dramatic gains is $51.63, and that is valuing the energy at the same very high levels of 70 cents per kWh and $1.76 per liter ($6.70 per gallon) of fuel as for rice. The increase in efficiency of modern agriculture over hand labor is 292 times. In simple terms, for every 292 hectares farmed using modern methods, a farmer using traditional methods can farm only one.
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25
26
Unit
Traditional 1 1,000
Modern 3 4,073
Time Required to Process One Hectare Plowing Days per Hectare Cost of Energy (US$ per Ha) Increased Productivity over Traditional Planting Days per Hectare Cost of Energy (US$ per Ha) Increased Productivity over Traditional Harvesting Days per Hectare Cost of Energy (US$ per Ha) Increased Productivity over Traditional Threshing Days per Hectare Cost of Energy (US$ per Ha) Increased Productivity over Traditional Winnowing Days per Hectare Cost of Energy (US$ per Ha) Fertilizer 4 Energy Component Cost per Hectare Total Days per Hectare Cost of Energy (US$ per Ha) Increased Productivity over Traditional 35 4 $64.13 9.5 0.12 $57.90 291.7 $12.50 $25.00 10 10 0.2 $1.75 58.9 5 1.0 $28.00 5.0 0.02 $20.30 300.0 5 0.5 $10.94 10.0 0.02 $5.10 250.0 5 2 $10.94 2.5 0.08 $7.50 60.0
Economic Analysis Revenues Per Hectare Price Per KG of Corn Total Revenue Per Hectare Value of Human Labor Days Per Hectare Labor Value Per Day Total Labor Cost Per Hectare Revenues Per Hectare Price Per KG Total Revenue Per Hectare Labor and Energy Cost Per Kg Produced Revenue Per Dollar of Energy Invested
1
$0.16 160
$0.16 407
$0.16 652
35 $1.00 $35.00
2 3 4
Xu Zhiying , Jones Govereh, J. Roy Black, T. S. Jayne. Maize Yield Response and Profitability of Fertilizer Use Among Small Scale Maize Producers in Zambia (August 2006) Appendix 8 Iowa State University Extension: Ag Decision Maker (http://www.extension.iastate.edu/agdm/crops) Total fertilizer cost times the assume energy component of 25%.
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The bottom of the table notes the Revenue per Dollar of Energy Invested. For the semi-mechanized version of African agriculture, for every dollar invested in energy, $6.35 of additional revenue is generated.
Milk Production
Importance
To evaluate accurately milks contribution to nutrition we need to be aware of the traditional role of milk in the diets of various communities within a region or country. In rural areas, consumption patterns depend on the degree of pastoralism within a community. Therefore, depending on the geographic distribution of traditional cattle herds in a given country, milk and milk products may constitute a major component of the diet in pastoral communities; while in non-pastoral communities, consumption may be non-existent. Generally, as the number of cattle kept per person decreases so does the dependency on milk as a source of dietary energy. At an average yield of 1 kg of milk per day containing 700 kcal, it takes four milking cows to meet the energy requirements of an adult person requiring 2,700 kcal/day. Only with large numbers of cattle can these levels be achieved in strictly pastoral communities. Households with fewer cattle have to rely on other foodstuffs apart from milk and meat to satisfy their nutritional requirements. Whereas the majority of the urban and semi-urban populations consume purchased milk (and in many cases milk that is imported), the majority of the rural population (who form at least 80 percent of the total global population) consume home-produced milk.
Mechanized Farming
Because of the sanitary requirements of dairy farming to reduce spoilage and avoid transmission of disease through milk, dairy is technically more advanced than other types of food production. This study identified three useful energy interventions that would both permit herd expansion and allow the farmer to engage in more specialized animal husbandry. The first intervention would be mechanical milking technology to eliminate the need for hand milking, allow for faster milking of each animal, and ensure greater hygiene. Milking mechanization would allow more cows to be milked in the same time as the traditional four animals. With automation the four cows could easily be increased to 15 to 20 animals.
The Importance of Energy in Agriculture and Food Security 28
The second energy intervention would be the ability to cool and store the milk. This would require 24 hour electric power to operate some type of cooling unit to safely store the milk. With increased shelf life, the milk could accumulate for a couple of days and be delivered to market for sale to the final consumer or a processing plant. The final intervention would be some form of transportation, such as a pickup to drive the milk to the next step. Since milk is time sensitive, a reliable delivery system is essential to upgrade from home use to commercial production. The cost of such a vehicle could be spread across a few producers who opt to become more specialized. With refrigeration, milk can last up to a week if its final use is for secondary products like butter, cheese, ice cream or other products requiring further processing. Finally, if a farmer opts to specialize, the need to maximize each animals production becomes essential. As a result, the feed given to the animals must be upgraded to include a small amount of cereal grain (corn) as well as higher quality forage.
Modern Farming
Modern dairy farms are high tech at every stage, with a typical farm having 150 dairy cows averaging 28 liters of milk a day in production. They are milked in a double 12 herringbone parlor, which costs around $300,000 to build and equip. The milk is stored in a 13,150 liter stainless steel refrigerated tank costing around $35,000. To support the animals in feed requires at least 250 acres of productive land along with a $350,000 investment in equipment. As for labor, the minimum is three people working 15 hours a day, seven days a week to maintain high production standards.
Quantitative Assessment
Appendix 1 Table 1.3 contains the summary budgets analyzing the impact of the introduction of energy on the steps of dairy farming. Table 6 below summarizes the major findings. You need energy to milk the cows, to keep the milk cold, and to get the milk to the final consumer. Table 6 illustrates two points. Mechanization is again important to gain some efficiency in the process. To move from subsistence feed the family levels to something resembling a small commercial operation requires expansion of the herd from four cows to 20. The increase in the labor required resulting from that expansion means that the cows will need to be mechanically milked. Second, the product has to be cooled to maintain its shelf life, meaning that a consistent power supply is required. This energy can be stationary (as in the developed world), and thus renewable energy sources such as solar, small hydro, or biomass would be ideal to the situation.
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$0.09 $3.68
$0.05 $7.85
Upton, Martin. The Economics of Tropical Farming Systems (Wye Studies in Tropical Farm Development) 2006 East African Dairy Improvement Program (October 2008 (http://mahider.ilri.org) University Of Wisconsin Exttension Center for Dairy Profitability (http://cdp.wisc.edu) Rwanda Value Chain Analysis for Dairy
To increase production requires higher indirect energy inputs through increased feed. Mechanization cannot be justified for typical current milk yield. Like their owners, the animals survive in a subsistence model, grazing on grasses and the leftover fodder of rice and corn. Note also that cattle are kept for the multiple purposes of meat and labor as well as milk production. The cow as an all-around animal is a counterproductive model as the energy a cow needs to pull a plow cannot go into making milk, and the feed required to produce an ideal beef cow is totally different than what is needed for the ideal dairy cow to convert feed to milk. Even at the high costs of energy from a diesel generator set, the cost is only five cents a kg of milk produced. It is another instance where a little goes a long way, and it is an essential input to move beyond subsistence to commercial production. The second point is to look at return from energy invested. The return of $3.68 for the introduction of energy is one half the returns resulting from improved crop production through application of energy. If the goal is to maximize the impact of investment dollars across the entire spectrum of African agriculture, the funds would be better spent on crop programs.
Horticulture
Importance
Horticulture includes the production of fruits and vegetables that are sold either fresh or processed into preserved products such as jams, juices, canned products, and concentrate. The case for investing in
The Importance of Energy in Agriculture and Food Security 30
African horticulture centers on two major potential benefits. The first is the improvement of diets of the domestic population through the increased availability of fresh and canned vegetables. The second is that due to the comparative advantage of temperate climates and low labor costs, Africa could develop an export market to other regions of the world. One horticultural crop in particular tomatoes dramatically highlights the importance of energy use to the productivity and incomes in rural Africa. Of the five million tons of tomatoes produced in 2008, it has been estimated that half were left to rot or thrown away because of: 1) the absence of refrigerated storage, 2) unavailability of transport to market, 3) lack of plants to process the tomatoes into longer shelf-life products, and 4) lack of domestic canning skills. The same holds true for many other fruits and vegetable crops that could provide better nutrition and income for rural populations. The requirements for canning fruits and vegetables are neither high tech nor arduous; what is needed is the ability to boil water, a glass jar with a sealable top, and the energy to operate a pressure cooker. The processing of vegetables could be performed in villages and the product could be delivered to urban markets on an asneeded basis. Figure 10 illustrates all the equipment needed to process fresh vegetables into storable commodities. FIGURE 10: EQUIPMENT REQUIRED FOR HOME CANNING
Traditional Farming
The traditional practices for growing a small garden are the same the world over. The soil is tilled by hand using a shovel, small plough or other device that turns the soil over. Normally this process is performed in the fall to allow the dead organic matter to decompose. In the spring or prior to planting, the soil is smoothed, the seeds sown by hand with a little fertilizer (or manure), and the plants occasionally watered to insure moisture levels. When the plant matures, picking is manually performed.
Mechanized Farming
As with rice and corn, the introduction of energy technology comes in the form of a small walk-behind tractor. With the ability to harness mechanical energy, more land can be cultivated, planted, sprayed with chemicals to prevent damage from fungus and insects, and irrigated by an irrigation pump. This technology is basically the same as what the average large-scale gardener utilizes. Although not an absolute requirement, mechanization enables production to be staggered so that the harvesting of different crops comes at different times. In fact, even the same crop planted at different times would improve production and mean less waste farmers would be able to harvest smaller quantities over a longer period of time. The main issue with vegetables is not production, but processing. As stated above, fruits and vegetables can be processed right on the farm. The energy requirements are minimal. The key is a steady stream of power, the best option being some type of renewable-based source. For example, a solar panel could provide enough power to operate a small pressure cooker for sterilizing the contents and sealing the jars.
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Modern Farming
Modern horticulture has actually gone in two directions. Large truck farming operations utilize largescale equipment such as a 200 hp tractor with a 30 foot disk for seedbed preparation, tractor-driven transplanters to both speed the transplanting process and eliminate the back-breaking bending to plant seedlings, mechanical harvesting, large-scale sprayers for chemical applications, and tractors, wagons, forklifts and large trucks to move the product from the field to grading and packing tables, storage, harvesting, processing and shipping. Intensive greenhouse environments that totally rely on manual labor constitute the second direction. The key to their success is the ability to produce large quantities of premium grade tomatoes for the fresh retail market and to produce all year under climate-controlled conditions.
Quantitative Assessment
Appendix 1 Table 1.4 contains summary budgets analyzing the impact of energy on the steps where the introduction of energy would benefit tomato production. Table 7 below summarizes the major findings. As with the previous analyses, the tables lead to two conclusions. Mechanization would certainly improve basic operations such as tillage, planting of the seedlings, irrigation, and transporting the product from farm to the next step in the value chain. Of these four operations, only irrigation could utilize nonfossil fuel energy such as renewables. In addition, the introduction of energy would bring in several new technologies not being utilized under traditional agriculture. Such interventions would cost about $7.70 a hectare and increase yields 3.5 times (from 10 to 35 tons) while increasing the price three times, from $133 to $400 per MT. The total cost would be $43.45 per hectare, and the Revenue Return per Dollar of Energy Invested would be $322.20. Given the potential for such large returns, serious consideration of investment in energy for horticulture is warranted.
32
Phase
Unit
Time Required to Process One Hectare Yields Disking Hectare Per Day Cost of Energy (US$ per Ha) Transplanter Hectare Per Day Cost of Energy (US$ per Ha) Spraying Hectare Per Day Cost of Energy (US$ per Ha) Transport Hectare Per Day Cost of Energy (US$ per Ha) Irrigation Hours a Day Cost of Energy (US$ per Ha) Pesicides and Ferilizer Energy Component Cost per Hectare Total 0.2 0.5 $6.25 0.03 30 $7.50 1.50 $1.50 50.00 $25.50 50.0 $0.57 12 $1.32 $37 $73.39 MT Per Hectare 10 35 75
0.02
Economic Analysis Revenues Per Hectare Price Per MT Total Revenue Per Hectare Revenue Per Dollar of Energy Invested
$133.33 $1,333
2 3
Elizabeth J. Z. Robinson and Shashi L. Kolavalli. The Case of Tomato in Ghana (International Gfood Policy Research Institute) GSSP Working Paper Number 20. April 2010 Ibid Lowe, Marcy and Gary Gereffi. Value Chain of Selected California Crops (Center on Globalization and Governence). July 2008
33
34
FIGURE 11: COMPARATIVE COSTS FOR POWER SYSTEMS IN SUB-SAHARAN AFRICA (US$/KWH)
Adapted from: Underpowered: The State of the Power Sector in Sub-Saharan Africa, AICD, 2008 and Renewables 2010 Global Status Report
Replacing diesel with modern renewable energy resources could significantly lower energy costs. Microand mini-hydro schemes, solar thermal, solar electricity, wind and a wide range of biomass, including agriculture and forestry wastes (e.g., rice hull, animal excrement, peanut shells and wood chips) can provide locally sourced, reliable and relatively inexpensive electrical and thermal energy for post-harvest processing. The use of renewable energy could reduce the cost of electricity by up to 75 percent, based on the comparison of typical costs as shown in Figure 11. The use of renewable energy generated from agricultural wastes, such as fueling rice mills with rice husks or producing biogas fuel from cow dung, also has tremendous value, as the source of the energy is free. FIGURE 12: COMPARISON OF SOLAR AND DIESEL ELECTRICITY COSTS
Recognizing the cost savings possible through replacement of diesel with renewable energy, China has embarked on a major program to increase its use of solar photovoltaic (PV) technology over the next forty
The Importance of Energy in Agriculture and Food Security 35
years. Figure 12 compares the cost of diesel electricity, which is projected to rise 3 percent annually from a 2010 base of thirty cents per kWh, with the cost of solar electricity in China, which is expected to decrease during the same period to less than ten cents per kWh. Hence solar, which is well suited to small isolated grids and individual applications such as single water pumps, can provide reliable energy rapidly at a lower and virtually escalation-free long-term cost. Business as usual agricultural programs that depend on traditional energy sources encourage the installation of diesel generating plants and continued use of fossil fuels. Although this approach saves on initial investment costs, it burdens both farmers and processors with much higher long-term operating costs. It is worth considering certain trends in recent years: When renewable energy is substituted for diesel fossil fuels in paddy drying and rice milling, the cost of energy drops from 20 percent of the total cost of production to less than 5 percent. Post-harvest losses can be virtually eliminated with either some type of storage or rapid postharvest processing. When introducing renewable energy sources to meet those energy requirements, the total cost can be cut by up to 25 percent. At current high oil prices, replacing diesel energy with renewable energy for any food-related application decreases electricity costs by 5075 percent or more, not only reducing the final cost of that food, but also decoupling the price of electricity from future oil price fluctuations. A range of reliable sources of energy offering tremendous value exist, including micro-hydro, wind, solar heat and electric, biomass, and biogas. Introduction of fossil fuels would increase GHG emissions substantially. However, by introducing appropriate renewable energy, Africa can avoid increasing GHG emissions and potentially realize a value of $4 billion or more from sales of carbon emission reductions.
36
rice, corn and milk all decrease rather rapidly with increased energy use and less manual labor. For rice the cost drops from eight to three cents a kg, for corn, from four to three cents, and for milk, 53 to 19 cents per kg. This result is not surprising. Using rice as an example, it takes one person 4 to 10 hours to thresh and winnow (clean) between 10 to 20 kg of rice. A machine can accomplish these two tasks in one step and time is reduced to a few minutes at a cost of a few cents for the energy.
Recommendations
There are three key points guiding our recommendations: First, a little energy goes a long way in agriculture; second, productivity gains can approach 700 percent in certain product value chains; and third, the introduction of simple mechanization allows small farmers to produce enough final product for a market and thus increase sorely needed income. The overall recommendation is to introduce and promote energy in agriculture towards supporting Africa in: 1) feeding itself, 2) reducing poverty, 3) producing products that can be marketed worldwide, and 4) achieving all of this while minimizing its carbon footprint. More in-depth research is critical in order to define the relationship and roles of energy in agriculture and the role that renewable energy can play in increasing returns to agriculture while minimizing GHGs. This study does not pretend to have fully established the exact role of energy in agriculture and the role that renewable energy can play therein. Applied research is being conducted across the world that was not uncovered in this desk study and that USAID needs to examine before deciding on a viable strategy for better integrating FTF and GCC activities and investment programming. This report was not designed to be a detailed study and is intended to create greater awareness, stimulate the thought processes of stakeholders, and bring FTF and GCC participants together to formulate joint solutions toward their respective goals. Some specific recommendations of how this report can be used are as follows: Project and program planning should distinguish the critical place of energy within agriculture, understand the role energy could play within the FTF as well as other development goals, and begin the process of integrating energy subcomponents within existing and planned FTF programs. As the first step toward production of a larger report that would outline the mechanics of planning and implementation, including specific areas to target. More work is required to define the optimal integration of FTF and GCC programs. However, such planning cannot be undertaken in a vacuum. USAID has a vast body of experience as well as some of the leading development professionals in the world, and their intimate knowledge of the development environment will be a critical component in further work. The research presented here will certainly stimulate many more ideas from those with intimate knowledge of countries and programs. From this broad overview, it is clear there are many opportunities for successful integration of the two programs, spanning an array of commodities as well as areas and climates. For example, irrigation, solar drying, threshing, cleaning, milking equipment, refrigeration, on-farm processing and canning, lighting, rice polishing, and grinding are all areas that could be serviced by renewable energy. In addition, the analytics presented in this study underscore the importance of small-scale mechanization and its role in improving productivity, including in the areas of plowing,
38
harrowing, seeding, harvesting, transporting from the field and to the market, input delivery and of course, fertilizers. Thus, a larger report is required to collect and consolidate all perspectives, experience, lessons learned and ideas for consideration of all stakeholders. While this desktop study was intended to introduce the role of energy in agriculture and highlight its potential in the African context, the larger report will provide more detail in terms of value chain analysis, past experience, and specific interventions as well as possible cooperative efforts between the FTF and GCC. The discourse, debate, and suggestions prompted by this report will inform the larger report, which will include a survey of internal and external resources of USAID professionals, with these specific goals: First and foremost the question of what is rather than what should be in African agriculture needs to be closely examined within the context of ongoing processes used in growing food and fiber and processing it for current or future consumption and market delivery. Past projects must be examined to determine what worked, what did not, and why. The large report will review the accumulated body of experience in terms of countries, regions and environments, including both successes and ideas to avoid, reasons why, and lessons to carry forward. Sources for this information would include experienced professionals and research into documents and relevant literature. The reports coming out of China of phenomenal rice yield increases clearly demonstrate change can happen rapidly. It would be important to examine how these changes were achieved and the role energy and, more specifically, renewable energy played. The report should include value chain analysis offering concrete evidence to support determination of priorities and propose a systematic, efficient means to determine which products have the greatest potential for rapid and large impacts from enhanced energy inputs. One possible output would be recommendations as to an AFR/SD 1 to 2 year programs of assistance that would target specific countries, areas, markets, and commodities. These interventions need an underlying economic basis to support high probability results. Other recommendations, such as technical support, joint pilot projects, and small interventions could evolve from a larger study. However, the main focus will be to integrate the FTF and GCC programs so that common ground can be exploited to benefit people receiving donor support. It has been demonstrated through the history of developed countries and highlighted within this overview that energy is the catalyst to improving food production as well as societys ability to move beyond subsistence. For Africa, this can mean a move in a direction that builds on momentum to alleviate hunger. The Missions will play a critical role by first understanding the relationship of energy and then building capacity for them to contribute as well. Both this preliminary assessment as well as the larger study will contribute to this direction.
39
Phase
Unit
Traditional 1
Direct Mechanized Intervention
Modern 3
Plowing
Hectares Per Day Use of Energy (Liters per Ha) Cost of Energy (US$ per Ha)
0.2
0.5 6.25 $10.94 1.5 6.25 $10.94 2 6.25 $10.94 1,500 1 $1.75 n.a. n.a. n.a. 11 0.70 $0.70 $7.70
10 7.5 $7.50 60 5.10 $5.10 45 20.3 $20.30 n.a. n.a. n.a. n.a. n.a. n.a. 0.02 441.60 $0.12 $7.53 1 3.00 $3.00 $9.00
Planting
Hectares Per Day Use of Energy (Liters per Ha) Cost of Energy (US$ per Ha)
0.07
Harvesting
Hectares Per Day Use of Energy (Liters per Ha) Cost of Energy (US$ per Ha)
0.05
Threshing
Kg per Man Hour Use of Energy (Liters per Man Hour) Cost of Energy (US$ per Ha) 4
20
Winnow
Kg per Man Hour Use of Energy (Liters per Man Hour) Cost of Energy (US$ per Ha)
10
Irrigation
Hours per Ha kWh Required Price Per Kwh Cost of Energy (US$ per Ha)
Drying
Hours per Ha kWh Required Per Hour Price Per Kwh Cost of Energy (US$ per Ha)
Fertilizer (N only)
Kg Urea per Ha (46% N) Cost per Kg Cost Per Hectare Yields Per Hactare (kg) Increased Productiveity (kg) Increased Productiveity (%)
800
1 2 3 4 5
African Rice Center (http://www.warda.cgiar.org) Appendix 8. Univeristy of Arkansas Extension Service, Crop Budgets (http://www.aragriculture.org/crops/rice/budgets) Number of Man Hours times $1.76 (price per liter of diesel in Africa)
1 hp motor blowing air through a solar tunnel, $60 per cwt in California
TABLE 1.2
Modern
Plowing
Hectares Per Day Use of Energy (Liters per Ha) Cost of Energy (US$ per Ha)
0.2
0.5 6.25 $10.94 2 6.25 $10.94 1 16.00 $28.00 1,500 1 $1.75 n.a. n.a. n.a.
12 7.5 $7.50 50 5.1 $5.10 60 20.3 $20.30 n.a. n.a. n.a. n.a. n.a. n.a.
Planting
Hectares Per Day Use of Energy (Liters per Ha) Cost of Energy (US$ per Ha)
0.2
Harvesting
Hectares Per Day Use of Energy (Liters per Ha) Cost of Energy (US$ per Ha)
0.2
Threshing
Kg per Man Hour Use of Energy (Liters per Man Hour) Cost of Energy (US$ per Ha)
10
Winnow
Kg per Man Hour Use of Energy (Liters per Man Hour) Cost of Energy (US$ per Ha)
10
Fertilizer (N only)
Kg Urea per Ha (46% N) Cost per Kg Cost Per Hectare Yields Per Hactare (kg) Increased Productiveity (kg) Increased Productiveity (%)
1,000
2 3
Xu Zhiying , Jones Govereh, J. Roy Black, T. S. Jayne. Maize Yield Response and Profitability of Fertilizer Use Among Small Scale Maize Producers in Zambia (August 2006) Appendix 8 Iowa State University Extension: Ag Decision Maker (http://www.extension.iastate.edu/agdm/crops)
TABLE 1.3
Herd Composition Number of Dairy Anima ls Production pe r Da y Pe r Cow (kg) Total Production per Day (kg) Milking Technology (Daily) Time Re quired to Milk (hours) kWh Hours Use d (per hour) Consumption of Ene rgy (kWh) Cost of Energy Pe r kW h Total Cost of Energy Other On Fa rm Energy Use (Daily) Time Energy Re quired kWh Hours Use d (per hour) Consumption of Ene rgy (kWh) Cost of Energy Pe r kW h Total Cost of Energy Transport (Daily) KM Per Day Lt pe r Da y (@ $1.76 per lt) Cost of Energy (US$) Cost Pe r Kg Produce d Indirect Input Intervention Grain Consumption (Daily) Kg Consumed Per Cow Cost per Kg of Grain Total Cost Per Cow Total Cost Per Farm Pe rcent Energy Energy Costs Fora ge Consumption (Da ily) Kg Consumed Per Cow Per Day Cost per Kg of Fora ge Total Cost Per Cow Total Cost Per Farm Pe rcent Energy4 Energy Costs 20 25 $0.04 0.80 16.00 20% $3 32 $0.04 2.40 144.00 20% $29 0 2 $0.20 $0.45 $9.09 30% $2.73 11.4 $0.20 $2.27 $136.36 30% $40.91 50 8.50 $10.35 $0.04 50 8.50 $10.35 $0.01 0 12 0.75 9 $0.70 $6.30 24 6.85 164 $0.12 $19.73 3.0 4.0 0.75 3 $0.70 $2.10 5.0 7.50 38 $0.12 $4.50 5 4.5 22.7 20 14 272.7 60 34 2,045.5
1 2 3 4
Upton, Martin. The Economics of Tropical Farm ing System s (Wye Studies in Tropical Farm Developm ent) 2006 East African Dairy Im provem ent Program (October 2008 (http://m ahider.ilri.org) University Of Wisconsin Exttension Center for Dairy Profitability (http://cdp.wisc.edu) Estim ated that 20% of the cost of feed is energy
TABLE 1.4
Phase
Unit
Traditional 1
Direct Mechanized Intervention
Modern
Disking4
Hectares Per Day Use of Energy (Liters per Ha) Cost of Energy (US$ per Ha)
0.2
Transplanter
Hectares Per Day Use of Energy (Liters per Ha) Cost of Energy (US$ per Ha)
0.02
Spraying
Hectares Per Day Use of Energy (Liters per Ha) Cost of Energy (US$ per Ha)
Transport
KM Per Day Lt per day Cost of Energy (US$)
Irrigation
Hours per Ha Price Per Kwh Increased Productiveity (%) Cost of Energy (US$ per Ha)
Fertilizers
Kg Urea per Ha (46% N) Cost per Liter Cost Per Hectare Increased Productiveity (MT)
0 10
20 0.55 35 25
60 0.55 75 65
Pesticides
Fungicides per Ha (lt) Cost per Liter Cost Per Hectare Percent Energy Increased Productiveity (%)
1 2 3 4
Maastricht School of Management. Value Chain Analysis of Tomatoes in Uganda and Kenya (September 2008) Ibid. North Carolina Cooperative Extension: Enterprise Budgets (http://www.ncmarketready.org/enterprise-budgets)
Hoe, Walk behind tractor with disk,1 passes with 200 hp engine, 30 foot disk