Volume 12, Number 16                                                 December 20, 2009

The Farmer

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The Consequences of following rules: farm vs garden

By Dr. Ridgely Abdul Mu’min Muhammad

As stated earlier there are a few rules that we have learned: 1. You must grow your crops within its proper season, 2. You must pay attention to and respond properly to weather conditions, 3. You must look at your crop or plants at least every other day, 4. After you see the condition of your crop or field and have the latest weather predictions, you must act immediately, if necessary, and do everything "right and exact".

These four rules are in effect whether you are gardening in a 50 by 50 foot plot or on a 1600 acre farm. The difference is a matter of time, logistics and power. There are negative consequences of not following these rules, but there is a cost that the farmer must pay to follow these rules.

For instance if you have a 50 by 50 foot garden and want to grow just say corn, you must plant the crop in due season. Let’s say that March is the best month to plant corn in your area. It should not be too difficult to go to your garden after working on your day job or on the weekends and get that 50 by 50 foot plot of land prepared for planting then planted. Or you can just take one eight hour day and get the job done. However, when you attempt to plant 200 acres of corn within one month, this is where time, logistics and power must be coordinated in a systematic manner to insure that you get the entire 200 acres properly planted in those 30 days. Let’s do the math to understand the magnitude of difference between the 50 by 50 foot plot and 200 acres.

Parameters: labor requirements 50 by 50 ft plot

Area (sq ft)

50x50

2500

Land prep, Planting

1 day per plot

1

30, 8 hr days with 1 man

30x2500 sq ft

75,000

30 day acreage

75,000 sq ft/43560

1.722

Hand labor needed

200 acres

200 acres/1.722

116.16

Labor cost

200 acres

116.16x30x8x$8

$223,027.20

 

 

We must start out by making a few assumptions. First of all we will assume that one man can prepare the land in a 50 by 50 foot plot and plant that plot with corn in one 8 hour day. We will assume that major land preparations like building the planting beds and bringing in the soil had been done earlier. So all that would be necessary would be to use a hoe and a rake to smooth out the soil and stick each corn seed in the ground with your finger. Therefore in one day you could theoretically plant 2500 sq ft. If you could work each day for 30 days, then you theoretically could plant 75,000 sq ft. Since there are 43,560 sq ft in an acre, then one man could plant 1.722 acres in that 30 day period. Now when we stretch this acreage out by adding on more hand labor, one could theoretically plant 200 acres in 30 days with 116.16 men/women. However, what is the probability of getting 116 people to work free of charge 8 hours each day for 30 days? At a wage rate of $8 per hour one would have to pay these 116.16 men/women $223,027.20. Now this is just to get the crop planted, but now you have to hoe the weeds out of your corn at least two times, then you have to harvest the crop.

Of course we are in modern times so we would have to get some equipment. However, equipment is not free and we must make sure now that we make enough money off of the crop to pay for it. So now let us compare a few scenarios to see how the farmer must look at his 200 acres of corn production.

Hand Labor Farm

Slave farm

Items

50 by 50 ft

200 acres

200 acres

Capital require.

Shovels and hoes

$ 40.00

$ 4,646.40

$ 4,646.40

$ 40.00

$ 4,646.40

$ 4646.40

Fixed costs

Equipment charge

$ 8.00

$ 929.28

$ 929.28

Prep/ plant labor

$ 64.00

$ 223,027.20

0

Cult/harv labor

$ 64.00

$ 223,027.20

0

Seed 4ac per bag

$ 0.72

$ 2,500.00

$ 2,500.00

Total var. cost

$ 128.72

$ 448,554.40

$ 2,500.00

Total prep, plant, cult, harv

$136.72

$ 449,483.68

$ 3,429.28

sales $4 per bushel

Yeild 100 bu per acre

Total revenue

$ 22.96

$ 80,000.00

$ 80,000.00

Profit/loss

$ (113.76)

$(369,483.68)

$ 76,570.72

Profit w/o labor cost

$ 14.24

 

 

 

However, first let us put up a projected budget for our 50 by 50 foot plot and the 200 acres of corn done with hand labor with the aid of a few shovels, hoes and rakes. We will say that the gardener can spend $40 on the required land preparation equipment. He may be able to keep those hand tools in workable condition for 5 years, therefore the depreciation expense or the allocated yearly equipment cost is $8.

Now even though he works without compensation, we must value the labor input with what is called “opportunity cost”. The gardener could have been doing something else with his or her time, so the economist would put in a value to that time to reflect what the gardener lost in income by playing around in his garden. So now we add $64 for that labor input.

We also will assume that one worker can cultivate the corn twice and pick it over a span of time equaling one 8 hour day of hand labor. However, for comparative reasons we are growing field corn, not sweet corn. Field corn or corn grain must be picked and shelled and is then put into bushel baskets weighing 56 lbs, selling for $4 per bushel. Therefore the total revenue received by the gardener would be $22.97 based on 100 bushel per acre yields.

Therefore if the gardener had to pay someone to do the planting, weeding and picking, he would lose $113.76. Now of course the gardener would probably not pay any hired help so he could then realize a profit or savings of $14.24.

Now if we stretch this idea of hand labor to 200 acres, we immediately see that we are in trouble with the 116.16 hired hands receiving $446,054 for planting, weeding and harvesting. However, during slavery the white farmers did not have to pay his slaves, therefore under these same assumptions the slave plantation could receive a profit of $76,571.

Now let us look at modern mechanized farm. At the very least such a farm would have to have a tractor, a harrow, a planter, a cultivator and a grain combine. This equipment new would cost around $260,000 which is reflected in the equipment allocation (assuming a 5 year depreciation) cost of $52,000 per year.

 

Mechanized Farm

Items

200 acres

200acres

Capital requirements

new

used

1. Tractor

$ 70,000.00

25000

2. harrow

$ 25,000.00

7500

3. planter

$ 30,000.00

5000

4. cultivator

$ 15,000.00

2000

5. grain combine

$ 120,000.00

7500

6. Total

$ 260,000.00

47000

Fixed Costs

7. Equipment allocation (5 yr dep)

$ 52,000.00

9400

Variable inputs

8. 1 man 30 days 3 times p,c,h

$ 5,760.00

$ 5,760.00

9. Fuel 300 gal at 2.5

$ 750.00

$ 750.00

10. Seed 4ac per bag at $50

$ 2,500.00

$ 2,500.00

11. Total var. cost

$ 9,010.00

$ 9,010.00

12. Total prep, plant, cult, harv.

$ 61,010.00

$ 18,410.00

sales $4 per bushel

Yield 100 bu per acre

13. Total revenue

$ 80,000.00

$ 80,000.00

14. Profit/loss

$ 18,990.00

$ 61,590.00

 

Of course the labor costs go down from $446,054 for the hand labor example to $5,760 wages to our skilled tractor driver. The net profit is now $18,990 if everything goes on schedule and the weather cooperates. However, every time the worker misses a day or the equipment breaks down or it rains, you will be thrown off schedule substantially. Here in Southwest Georgia the rule of thumb is that you lose one day in the fields for every 1 inch of rain. As the farm manager of Muhammad Farms I know that I spend more time getting parts and fixing equipment than I spend riding the tractors. The larger the tractor the greater will be the repair bills. Also, as tractor size increases so does the damage to a wet or soggy field. Therefore, it becomes costly to make the mistake of rushing to the field too early after a rain.

We also showed the scenario of a mechanized farm that purchases used equipment instead of new equipment. If every thing goes as planned the farmer’s bottom line can increase from$18,990 to $61,590. However, the probability of equipment downtime due to repairs will increase. And if you have made the mistake of buying a piece of obsolete equipment for which there are no more repair parts, you might wind up losing a substantial amount of crop to weeds or not being able to harvest the crop at all. All of these factors must be weighed by the farm manager and he must decide how much risk he can afford. Buying new equipment puts you in a financial risk of bankruptcy due to a failure to make payments, while used equipment puts you at risk of losing the crop because of unexpected delays due to equipment failures.

Although buying used equipment may cause a problem with getting replacement parts for repairs, new equipment has its repair woes also. For instance, the newer model John Deere and International tractors that have engines of over 100 horsepower do not even allow you to open the hood over the engine. Any repairs to the engine or transmission must be done by an authorized dealer at a cost of $90 per hour and their mechanics do not work fast. On the other hand at Muhammad farms we have older tractors which we can do a lot of the minor to intermediate repairs. In fact I can call the dealership and speak to the mechanics that I personally know and get them to walk me through most procedures. Fortunately our tractors or not so old that we can not get parts, however sooner or later we will have to get knew tractors and be stuck with huge repair bills when anything goes wrong after the warrantee expires.

The larger highly capitalized farmers reduce their chance of breakdowns by leasing their tractors and pickers for no more than 5 years, then trading them back in and starting another 5 year lease on the latest models. Going back to our new equipment scenario, that $52,000 per year expense for equipment can be quite a burden, especially in years of either bad weather or low market prices. In farming there are always tradeoffs that the farm manager must face and he must face the consequences of his decisions, i.e. responsibility bearing. Of course white farmers have been able to shift some of this risk to the government and government subsidized crop insurance programs that we will discuss later. However, many black farmers were discriminated against and suffered the loss of their farm because they did not have the government to bail them out the way white farmers did.

In the Nation of Islam the Three Year Economic Program is so important, because it allows us to purchase more land and equipment and cover some of the risks involved with farming. For now Muhammad Farms does participate in government programs that we are entitled to and we have crop insurance on our major cash crops, but not vegetables and navy beans. However, one day we will be completely independent and must have our own programs and insurance for our own farmers to help cover some of those risks, so the Three Year Economic Program will be needed long into the foreseeable future.

These scenarios were abstracted from reality to make some points:

1. a gardener has fewer financial and logistical worries than a farmer,

2. a gardener will spend a lot less time fixing equipment than a farmer,

3. a gardener will not have to deal with getting a loan to operate,

4. a gardener will not have to manage hired labor,

5. the gardener can pay closer attention to each of his plants, while the farmer must look after fields of crops then do necessary operations on a large scale,

6. the requirement for accuracy greatly increases for the farmer over the gardener.

Let me explain this point of differences in “margins for error” of the gardener and farmer. A gardener does not have to plant his crop in exactly straight rows, because he does not have to use any equipment to pull the weeds. He can use a hoe or a roto-tiller but if he has to, he can pull the weeds by hand with little chance of damaging his crops. However, the farmer must plant his crop in straight rows and each seed must not deviate by more than an inch off of that straight line. This is because when the farmer has to fight weeds, he must do it with a cultivator not hand labor. The farmer would like to cultivate within 2 inches on either side of his crop, so anything outside of these two inches of the “drill” will be killed along with the “weeds”. Now, of course the farmer can use chemicals to fight the weeds, but even then unless he plans to spray the weed killer with an airplane, he must still drive through his fields which need to be in straight rows so he does not run over his crop.

To get these straight lines the farmer would like to plant on as flat of a piece of land as possible. Every time he runs into a hill he must make adjustments in his steering so that the cultivator will not sway too far to one side and kill his crop.

Another reason for the need for flat land with a uniform soil type is the effect of rain. When you have flat land with a uniform soil type, the land dries out evenly after a heavy rain. However, if you have hilly land, the lower areas will be wet while the higher areas dry. This could cause you to make a mistake and wind up stuck in the mud in the middle of a field, because you thought it was dry throughout. Now, you have to bring in another tractor to pull you out or call a wrecker and pay that extra expense. You lose in terms of time and money paid out.

When you have hilly land, the top of the hill may become very dry and hard before the bottom land is ready to be cultivated or plowed causing your equipment to break when you try to plow too deep for the conditions. Plowing shallow will probably prevent your equipment from breaking, but may not kill the weeds or turn the soil in the manner that you would prefer and therefore, you still are wasting time and money.

Even if you have relatively flat land, but in one part of the field you have very sandy land and in another part you have heavy land like clay, the sandy soils will dry out before the clay soils. Therefore, you can make the mistake again of thinking that the entire field is dry and you wind up stuck again in some mud. This is why the large white farmers in Georgia have taken up the best flat land from the black farmers and left them with the hilly heavy clays. Even when the white farmers have some land that is too hilly to work with or too swampy or cannot fit under a circular irrigation pivot, they rent that land to the government and get a check each year for not utilizing this difficult to farm land.

It is also harder to use large multi-row planters, cultivators and harvesters if you have a rolling landscape. One part of a 12 row planter may be planting at two inches deep while another row is being planted at a depth of one inch. What may happen, depending on the temperature and soil moisture conditions, is that one set of rows could germinate before another. Now you may have one plant standing at 8 inches while another at only two inches. When you use a cultivator to kill the weeds, you want to run it at a certain speed according to the height of your crop. You can usually kill more weeds driving at a faster pass, but if your crop is to short, you may wind up killing it as well.

Now to grow rice on a commercial basis the land specifications increase dramatically. Fields for growing rice should be relatively level but gently sloping toward drainage channels. Generally, fields with less than one percent slope are suited for rice production. Ideally, land leveling for a uniform grad of .15 to .20 percent slope achieves necessary drainage and also reduces the number of required levees. On some fields using a land plane to construct the natural slope uniformly is sufficient.

If you already have land then there are some things that you may be able to do to enhance its quality. However, before you buy land, be sure that you know what you are planning to do with it or you may pay too much for something that will give you more trouble than benefit. You must get some type of experience under your belt before you buy land to farm. You can bring in new topsoil for a garden, but you can not afford to replace acres of land to farm. You can level hills and drain swamps to put up condos or shopping malls but should buy farm land that is ready to farm, because the returns per acre for farming are much less than for housing, retailing or industrial use.

The development of western society has reduced the value of what is produced naturally but increased the value of what is artificially manufactured. This change was produced as people made certain choices. Some made conscious and calculated choices, but most just fail into the “trends” of the time. “History rewards our research…” on these important issues of societal and economic transitions that made some sectors winners and other sectors losers.