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Policy Analysis of Sudans Irrigated Subsector:
The Case of Gezira Irrigation Scheme

presented by

Sam Lemison Laki

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POLICY ANALYSIS OF SUDAN’S IRRIGATED SUBSECT OR:

THE CASE OF GEZIRA IRRIGATION SCHEME

By

Sam L. Laki

A DISSERTATION

Submitted to
Michigan State University
in partial fulfilment of requirements
for degree of

DOCTOR OF PHILOSOPHY

Department of Agricultural Economics

1992

ABSTRACT

POLICY ANALYSIS OF SUDAN’S IRRIGATED SUBSECT OR:
THE CASE OF GEZIRA IRRIGATION SCHEME

by
Sam L. Laki

This study analyzes changes in resource use, enterprise mix and farm income on
a typical Gezira tenancy, and assesses the impact of government policy on farm
productivity. The study has five objectives: 1) describe the Gezira farming system; 2)
identify main constraints facing tenants; 3) evaluate the viability of the Gezira Scheme;
4) evaluate alternative policies designed to raise productivity; and 5) draw policy
implications from the study’s results.

The study was based on both primary and secondary data. Secondary data was
obtained from published reports and studies. Primary data was obtained from a survey of
96 Gezira farm households for 1989/90 cropping season. Information collected on farm
operations and socioeconomic characteristics of the farm households was used to develop
farm enterprise budgets, descriptive statistics and domestic resource cost ratios. A static
linear programming model was formulated to maximize total gross margin subject to
minimum sorghum consumption requirements of the tenant households. Optimum farm
plans were generated using the farm survey data. Sensitivity analysis was used to
determine the impact of alternative technologies, policies, and resource levels on
cropping pattern, resource use, farm productivity and farm income.

The results showed that: Sudan has a comparative advantage in production on
the Gezira Scheme of long-staple cotton, medium-staple cotton, wheat and groundnuts,
and a comparative disadvantage in production of sorghum. The optimum base plan

includes medium-staple cotton, wheat and sorghum, and excludes long-staple cotton and

Sam L. Laki
groundnuts. Both long-staple cotton and groundnuts face high costs of production and
groundnuts lacks an adequate market infrastructure.

Labor, capital and water were binding during the peak production periods.
Sensitivity analyses indicate that increases in crop yields and prices, improved supply of
irrigation water, and elimination of the mandated cropping pattern will result in higher
resource productivity, and higher output and farm income.

Government policy should focus on the design and improvement of crop
marketing, input supply and utilization; elimination of the mandated cropping pattern;
reduction of production costs; efficient water distribution; provision of credit, research
and extension services; and the formulation of monetary, fiscal and trade policies that

will spur economic development.

ACKNOWLEDGMENTS

I wish to express my sincere gratitude to Professor Eric W. Crawford, my
academic adviser and thesis Director for his patient guidance and encouragement during
the preparation of this dissertation. I would like to thank members of my thesis
committee; Drs. Steve B. Harsh, Milton H. Steinmueller and John H. Goddeeris for their
contribution and assistance.

I am indebted to Professor Richard H. Bernsten who served as my adviser before
going on sabbatical leave to the University of Zimbabwe; and Drs. David J. Campbell
and Tim Lane who served on the guidance committee before going on sabbatical leaves.

Thanks to Professor Abdel M. Yassin, Director; training and publications,
Agricultural Research Corporation, for allowing me the use of the Corporation’s
resources; Dr. Hamid H. Faki, my field advisor; Mr. Cesar A. Guvele; and all the
colleagues at Agricultural Research Corporation for their valuable assistance.

Thanks to the members of the Socioeconomic Unit, Sudan Gezira Board; Mr.
Abrahim Bedawi, Director; Mr. Alias K. Malik, Statistician; and all the 13 enumerators
who provided invaanble assistance during the data collection.

I am very grateful to the Government of Sudan and United States Agency for
International Development (USAID) for financing my graduate studies at Michigan State
University, the Rockefeller Foundation for financing the field work in Sudan and; the
Ford Foundation for financing the dissertation analysis and write up at Michigan State
University.

I owe much gratitude to my brother Henery Lasu who provided all the much
needed support throughout my education; my wife Josephine, daughter Kujang and sons

Lomoro and Lemi for their patience and understanding during the preparation of this dissertation.

iv

DEDICATION
To my dear parents Estere Mude and Elisa Lemi

Who laid the foundation for my Education.

TABLE OF CONTENTS

Page

LIST OF TABLES .................................................... x

LIST OF FIGURES ................................................. xiii

CHAPTER I INTRODUCTION ....................................... 1

1.1 Background ................................................ 1

1.2 Problem Setting ............................................ 3

1.3 Research Objectives ......................................... 4

1.4 Related Studies ............................................. 5

1.5 An Overview of the Research Approach .......................... 9

1.6 Organization of the Study ..................................... 9

CHAPTER II RESEARCH METHODOLOGY ........................... 12

2.1 Conceptual Framework ...................................... 12

2.1.1 Domestic Resource Cost Ratios ........................ 13

2.1.2 Linear Programming model ........................... 15

2.2 Research questions ......................................... 16

2.3 Choice of the Study area ..................................... 17

2.4 Sampling Techniques ....................................... 17

2.5 Data Collection ............................................ 18

2.6 Data Utilization ........................................... 19

CHAPTER III NATIONAL POLICIES .................................. 21

3.1 Framework for Policy Analysis ................................ 21

3.2 Macroeconomic Policies ..................................... 22

3.3 Agricultural Policies ........................................ 26

3.4 Agricultural Sector ......................................... 31

3.4.1 Traditional rainfed Subsector ' .......................... 31

3.4.2 Mechanized rainfed Subsector ......................... 31

3.4.3 Irrigated subsector .................................. 33

3.5 The Nile waters ............................................ 36
CHAPTER IV CHARACTERISTICS OF AGRICULTURAL PRODUCTION

IN THE GEZIRA ..................................... 38

4.1 Historical Development ..................................... 38

4.2 Current situation and organization ............................. 39

4.3 Climate and soils ........................................... 44

4.4 Land tenure .............................................. 46

4.5 Cropping Pattern .......................................... 47

4.5.1 Crop Rotation ...................................... 47

vi

Page

4.5.2 Cropping Calendar ................................... 48

4.6 Production Relations ........................................ 49

4.7 Agriculture Production ...................................... 53

4.7.1 Input supply ....................................... 55

4.7.2 Cost of production .................................. 55

4.8 Water Resources .......................................... 58

4.8.1 Distribution System .................................. 58

4.8.2 Demand for irrigation water ........................... 60

4.9 Labor input .............................................. 65

4.10 Production Credit ......................................... 66

4.11 Agricultural Research ...................................... 68

4.12 Produce Marketing ........................................ 70
CHAPTER V CHARACTERISTICS OF THE SURVEY TENANT

HOUSEHOLDS ....................................... 73

5.1 Representative farm ........................................ 73

5.2 Land use ................................................. 75

5.3 Water use ................................................ 77

5.4 Farm labor force ........................................... 80

5.4.1 Household structure ................................. 80

5.4.2 Family Labor ...................................... 81

5.4.3 Hired Labor ....................................... 82

5.5 Farm Capital .............................................. 83

5.6 Production Technology ...................................... 86

5.7 Enterprise Budgets . . . . . . . . . . ............................... 87

CHAPTER VI COMPARATIVE ADVANTAGE FOR GEZIRA CROPS ...... 95

6.1 Comparative Advantage ..................................... 95

6.2 The effects of Policy ........................................ 97

6.3 Review of comparative advantage Studies ........................ 98

6.3.1 Sattar, 1982 ........................................ 98

6.3.2 Youngblood and Leonard, 1983 ........................ 100

6.3.3 Jansen, 1989 ....................................... 100

6.4 Domestic Resource Cost Ratios ............................... 106

CHAPTER VII LINEAR PROGRAMMING MODEL FOR THE GEZIRA ..... 114

7.1 Overview ................................................. 114

7.2 Mathematical Representation ................................. 117

7.3 Assumptions of Linear Programming ......................... q. . 118

7.4 Objective function .......................................... 119

7.5 Activities in the model ...................................... 120

7.5.1 Crop production activities ............................. 120

7.5.2 Labor hiring activities ................................ 123

7.5.3 Irrigation water activities ............................. 125

vii

Page

7.5.4 Capital borrowing activities ............................ 125
7.5.5 Crop selling activities ................................ 127
7.5.6 Sorghum buying activities .................. . ........... 128
7.5.7 Capital transfer .............................. ' ....... 129
7.6 Model Restrictions ......................................... 130
7.6.1 Land constraints .................................... 130
7.6.2 Labor constraints ................................... 130
7.6 3 Water constraint .................................... 130
7.6.4 Operating capital constraints ........................... 131
7.6.5 Minimum sorghum consumption constraint ................ 131
7.7 Derivation of the Righthand Side values ......................... 131
7.7.1 Available Land ..................................... 132
7.7.2 Available Labor .................................... 132
7.7.3 Available Water .................................... 134
7.7.4 Available operating Capital ............................ 134
7.7.5 Family subsistence needs ............................. 134

CHAPTER VIII RESULTS OF THE LINEAR PROGRAMMING ANALYSIS . . . 135

8.1 Base Run Analysis ......................................... 136
8.1.1 Level of enterprises in the base run ........ -. ............ 136
8.1.2 Shadow prices in the base run .......................... 139
8.1.3 Cost of forcing excluded activities into the base run ......... 141
8.1.4 Resource range coefficients in the base run ............... 143
8.2 Sensitivity Analysis of the Gezira model farm .................... 144
8.2.1 The effect of relaxing the mandated cropping pattern ........ 144
8.2.1.1 Level of enterprises in the solution ............... 144
8.2.1.2 Shadow prices in the optimum solution ............ 147
8.2.2 Changes in crop yields ............................... 149
8.2.2.1 Level of enterprises in the solution ............... 149
8.2.2.2 Shadow prices with 15 percent increase in yields . . . . 149
8.2.2.3 Cost of forcing excluded activities into the solution . . 150
8.2.3 Changes in crop prices ............................... 152
8.2.3.1 Level of enterprises in the solution ............... 152
8.2.3.2 Shadow prices with 25 percent price increases ...... 153
8.2.3.3 Cost of forcing excluded activities into the solution . . 154
8.2.4 Changes in the levels of water and labor ................ 156
8.2.4.1 Level of enterprises in the solution ............... 156
8.2.4.2 Shadow prices with 25 % more available water and
labor ..................................... 157
8.2.4.3 Cost of forcing excluded activities into the solution . . 157
8.2.5 Level of activities without borrowing .................... 158
8.3 Summary ................................................ 160

viii

Page
CHAPTER IX SUMMARY, POLICY IMPLICATIONS, AND

SUGGESTIONS FOR FURTHER RESEARCH ............. 162

9.1 Summary ................................................. 162

9.1.1 The design of the Study .............................. 163

9.1.2 The results of the Study .............................. 166

9.2 Policy implications ......................................... 168

9.3 Limitations of the Study ..................................... 173

9.4 Further Research .......................................... 174
APPENDICES

Appendix A Gezira tenancy Ordinance, 1927. ....................... 175

Appendix B Standard Practices on the Gezira Research Farm .......... 183

Appendix C Explanation of abbreviations used in LP matrix ............ 1.87

BIBLIOGRAPHY ............................. _ ...................... 190

ix

IflI-E

Table 1.1
Table 2.1
Table 3.1
Table 3.2
Table 3.3
Table 3.4
Table 3.5
Table 3.6
Table 3.7
Table 4.1
Table 4.2
Table 4.3
Table 4.4
Table 4.5
Table 4.6
Table 4.7
Table 4.8

Table 4.9

Table 4.10
Table 4.11
Table 4.12

Table 4.13

Table 5.1

LIST OF TABLES

Page
Land utilization in the Sudan 1975 and 1985 ...................... 2
Sample selection in the main Gezira ............................ 18
Percentage share of GDP by sector, 1984/5-1988/90. ............... 23
Balance of payments, 1984/85-1988/ 89. ......................... 25
Operations of the Agriculture policy and food system .............. 29
Total crop area, output and average yields ....................... 32
Total area, output and yield of irrigated crops .................... 34
Major irrigation Schemes in the Sudan .......................... 35
Nile waters agreement 1929 and 1959 ................ , ........... 37
Meteorological data for Wad Medani, 1941-75. ................... 45
Development of crop rotation in the Gezira ...................... 49
Research recommended sowing and harvesting dates ............... 51
Percentage distribution of net revenues ......................... 52
Crop area, output and yield in the Gezira Scheme ................. 54
Water rates based on actual cultivated areas, 1988 ................. 56
Cost of production per feddan, 1981-1990 ....................... 57
Land and water rates per feddan .............................. 57
Actual expenditure and recovery rates .......................... 58
Water distribution network in the Gezira Scheme ................. 60
Monthly water releases from Sennar dam ....................... 61
Crop water requirement factors by Penman method. ............... 62
Cotton picking labor, 1979-1989 ............................... 67
Land use of an average Gezira tenancy, 1989/9O .................. 76

X

Table 5.2
Table 5.3
Table 5.4
Table 5.5
Table 5.6
Table 5.7
Table 5.8

Table 5.9

Table 5.10
Table 5.11
Table 5.12
Table 5.13
Table 5.14
Table 5.15

Table 5.16

Table 6.1

Table 6.2

Table 6.3
Table 6.4
Table 6.5
Table 6.6
Table 6.7

Table 6.8

Page

Crop yields under Research and tenant conditions ................. 78
Average yields per feddan for survey farms, 1989 / 90 ............... 78
Water requirements by a 20-feddan gezira tenancy ................. 79
Monthly crop labor requirements, Md/Fed 1989/90 ................ 84
Cash expenses of a Gezira model farm, 1989/ 90 .................. 85
Farm gate prices in the Gezira, 1987/88 - 1989/90 ................. 87
Average crop yields in the main Gezira ......................... 87
Board and tenant responsibilities on farm operations ............... 89
Enterprise budget for medium-staple cotton ..................... 89
Enterprise budget for long-staple cotton ........................ 90
Enterprise budget for wheat .................................. 91
Enterprise budget for groundnuts .............................. 91
Enterprise budget for local sorghum ............................ 92
Enterprise budget for hybrid sorghum ........................... 93
Crop costs, revenue and net incomes, 1989/90 .................... 94
Coefficients of dependence, competitiveness and profitability,
1980/ 1981 ................................................ 100
Domestic resource cost, value added, dependence, profitability
coefficients, 1983 ........................................... 101
Summary of economic value calculations, 1988/ 89 .................. 102
Domestic resource cost ratios for Gezira crops .................... 105
Border and producer parity prices, 1989/ 90 ....................... 109
Domestic and traded cost components, 1989/ 90 ................... 109
Domestic resource cost ratios for cotton, 1989/90 .................. 110
Domestic resource cost ratios, 1989/90 .......................... 111

xi

Table 7.1
Table 7.2
Table 7.3
Table 7.4
Table 7.5
Table 7.6
Table 7.7
Table 7.8
Table 8.1
Table 8.2
Table 8.3
Table 8.4
Table 8.5
Table 8.6
Table 8.7
Table 8.8

Table 8.9

Table 8.10
Table 8.11
Table 8.12
Table 8.13
Table 8.14
Table 8.15

Table 8.16

Page

Crop production activities .................................... 121
Labor hiring activities ....................................... 124
Irrigation water activities ..................................... 126
Capital borrowing activities ................................... 126
Selling, buying and consumption activities ........................ 128
Transfer activities .......................................... 129
Family and hired labor in man-days per feddan .................... 132
Monthly water to a 20-feddan tenancy ........................... 133
Level of enterprises in the Gezira model ......................... 137
Shadow prices for the resources in the base run ................... 140
Cost of forcing excluded activities into base run ................... 142
Resource range variations in the Gezira model .................... 145
Enterprise levels without mandated cropping pattern ............... 146
Shadow prices without mandated cropping patterns ................. 147
Cost of forcing excluded activities into the plan .................... 148
Level of enterprises with 15 % increase in yield ................... 150
Shadow prices with 15 percent increase in yield .................... 151
Cost of forcing excluded activities into solution .................... 152
Level of enterprises with 25 percent price increases ................ 153
Shadow prices with 25 percent price increases .................... 154
Cost of forcing excluded activities into solution .................... 155
Increasesinavailablewaterandlaborby25%156
Shadow prices with 25 % water and labor increase ................. 158
Cost of forcing excluded activities into solution .................... 159

xii

F IGURE
Figure 4.1

Figure 4.2
Figure 4.3
Figure 4.4

Figure 4.5

LIST OF FIGURES

Page
Main irrigation networks in the Gezira ........................ 40
A typical irrigation schedule layout ........................... 42
Organization of the Gezira Scheme ........................... 43
Organizations of hawashas in a 90 feddan number ................ 44
Gezira cropping calendars .................................. 50

xiii

CHAPTER I

INTRODUCTION

1.1 BACKGROUND

Sudan has an area of 2.25 million square kilometers, a population of 25.8 million
people growing at the rate of 2.8 percent per annum, and an inflation rate of 56 percent
per annum (1991). Sudan is heterogenous in climate, geography, history, peoples and
religions. Table 1.1 reveals that there are 84 million hectares of arable land but only 9
million hectares are under production. The high potential remain underutilized because
of counterproductive macroeconomic policies, government mismanagement, drought and
civil war.

The Sudanese economy is dominated by the services sector which contributes 50
percent to GDP. Agriculture contributes 35 percent to GDP, generates 60 percent of
government revenue, 81 percent to export earnings and 75 percent of the economically
active population is engaged in agriculture. Livestock contributes about 11 percent and
forestry about 3 percent. Secondary production contributes about 16 percent:
manufacturing 9 percent, construction 5 percent and public utilities 2 percent (World
Bank, 19903).

The performance of the Sudanese economy has been very disappointing; declines
in per capita income and output, stagnation in exports, deterioration in infrastructure,
health and education, services; and a mounting external debt. The economy can be
characterized by 1) production below capacity in both agriculture and manufacturing with
much variability due to the influence of weather in agriculture; 2) stagnation in real

exports due to low productivity and inappropriate trade policies; and 3) an expanding

2

financial imbalance. Foreign debt, including payment of arrears, and government deficits
have both increased sharply. The mounting arrears on foreign debt have reduced Sudan’s
access to foreign finance; and the monetization of the government deficits have
contributed to high and rising domestic inflation. Because of the above mentioned
factors; savings and investments have been very low, and productive and supportive
infrastructure have been decaying from the lack of maintenance that makes it difficult
for the country to maintain production and export sectors.

GNP grew at the rate of 2.1 percent a year. With the population growing at the
rate of 2.8 percent a year, the poor performance of the GNP implies an 11 percent
reduction in real per capita GNP over a 20-year period. The slow trend growth in GDP

reflects a uniformly slow growth in all sectors of the economy. Value added in agriculture

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TABLE 1.1 LAND UTILIZATION IN THE SUDAN 1975 AND 1985.
LAND USE 1975 1985
TOTAL AREA 250,540 250,540
Land Area 237,560 237,560
Area under water 12,980 12,980
AGRICULTURAL AREA 84,200 84,200
Cultivated 7,848 9,600
Cropped: 7,008 8,800

irjgated ( 1,565) (1,680)

Med (5,443) (7,120)
Fallow 840 800
PASTURE LAND 22,740 ZOQOO
FORESTS 91,500 7QL000
OTHER UNCULTIVATED 38,100 63,369
Area in hectares ’000’ 1 Feddan (Fed) = 0.42 (Ha) = 1.036 Acres
Source: Brandt et al” 1987.

 

 

3

manufacturing and services grew at 1.5, 4.5, and 2.3 percent a year, respectively. The
overall growth in GDP mirrors the extreme variability in the agriculture sector. Export
volumes have varied annually with a grth trend of -l.4 in the 1980’s; cotton exports
declined at the rate of 0.4 percent a year. Gum arabic exports also fell. Sorghum exports
have been erratic with a trend growth rate of 1.5 percent a year. Sudan’s total world

market share in merchandise exports fell by about 46 percent over the ten year period.

1.2 PROBLEM SETTING

In the last 20 years, Sudan has been experiencing economic crises. The major
causes of these crises include: poor economic policies, drought and civil war. External
factors also aggravated the impact of the bad domestic policies. Per capita income
decreased by an annual rate of 1.9 percent. Balance of payments deficit has been
increasing at the rate of 9 percent per annum. The external debt has risen from $3.8
billion in 1978 to $15 billion in 1992.

In the 1970s, Sudan was viewed as the Bread Basket of the middle East. Its vast
agricultural potential coupled with the petro dollars from the Gulf states were thought to
be an ideal combination to supply the food needs of the Middle East. Development
projects were based on the ”Breadbasket strategy". However, rapid declines in the
second half of the 1970’s led to concentration on the rehabilitation of the existing
schemes rather than opening new ones. There was a sharp decline in the volume of
Sudan’s traditional cash crops: long-staple cotton, sesame and groundnuts.

In 1983-1985 Sudan experienced its worst food crisis as a result of drought, bad
agriculture policies, civil war and high oil prices. These problems are closely linked to the

performance of the irrigated subsector which is oriented towards the production of

4

cotton for export with the government being an active participant. The irrigated
subsector has demonstrated a high productivity potential that can only be realized
through the use of good government policies.

Major problems that plague the irrigated subsector since the 1970’s include poor
maintenance, bad management, high administrative costs, shortage of skilled manpower,
price controls, shortage of equipment, late delivery of inputs and lack of proven
technology for wheat, groundnuts and sorghum. The irrigated subsector faces the most
government intervention, including mandating of enterprise mix and crop rotation,
provision of irrigation water, land preparation, fertilizer application, and setting of input
and output prices.

This study will examine resource allocation in the Gezira Scheme in order to
determine resource use, crop productivity and farm income; and an evaluation of
financial profitability for cotton, wheat, groundnuts and sorghum in the Gezira. The key
research questions are: I) do government policies encourage efficient resource allocation;
2) does the present incentive structure stimulate high productivity; and 3) what policy

changes can facilitate further development of the irrigated subsector?

1.3 RESEARCH OBJECTIVES

1. To describe the farming system of the Gezira Scheme.

2. To identify the main economic constraints facing the tenants in increasing food
production and farm income in the Gezira Scheme.

3. To evaluate alternative policy scenarios which can lead to more efficient resource

use in the Gezira Scheme.

5

4. To evaluate the economic viability and Sudan’s comparative advantage of the
crops grown in the Gezira.

5. To draw policy implications for raising crop productivity in the Gezira Scheme.

1.4 RELATED STUDIES

Technical aspects of the irrigated subsector have been extensively analyzed but
very little research has been done on economic aspects.

Acharya (1979) examined the role of a wide range of policy interventions in
determining the overall incentive framework influencing the allocation of resources in
the Sudan. He concluded that the incentive framework confers widely divergent rates of
effective protection to different agricultural activities and that the overall incentive
framework is biased against agriculture in favor of industry and is also biased in favor of
import substitution and against exports. Acharya advocated a set of policy reforms in
favor of comparative advantage. The study did not pay much attention to the
implications of the incentive structure for resource allocation within the irrigated
subsector where most of the exports originate.

Faki (1982) built a linear programming model to examine the economics and
management of irrigation water in the Gezira Scheme. Faki’s model had 85 activities and
the main constraints were land, water, labor and machinery. He ran the model at varies
canal capacity levels and found: 1) an irrigation water deficit in October and November;
2) high returns to irrigation water; 3) cotton realized the highest benefits, followed by
sorghum and groundnuts, while the net benefit for wheat was negative; 4) maximum

cropping intensity was only 65 percent as compared to the planned 75 percent; and 5) an

6

increase in canal capacity increases demand for seasonal labor. Faki suggested a water
rate system which would differ by the crop.

Sattar (1982) presented estimates for the 1980/81 cropping season of foreign
exchange dependence, international competitiveness, and private profitability for all
crops grown in rainfed and irrigated subsectors. This study did not incorporate the
effects of variations in world and producer prices, yields, input costs on resource
allocation decisions. The study showed that concentrations on investments on the
rehabilitation of existing projects was a step in the right direction, and there were
relatively high profits on rainfed crops. The study emphasized the need for agricultural
research on cultural practices and new production technology.

Youngblood et al. (1982) examined the structure of incentives facing Sudanese
rainfed farming. They analyzed the effect of policy changes in tax structures, the
exchange rate, agricultural pricing and marketing, and government intervention on
productivity in the rainfed subsector and its potential for improving the economy. They
concluded that whereas the policy reforms have led to gains in the rainfed subsector,
much remains to be done in the area of tax reform, agricultural research, and
improvements in the marketing system. They did not estimate the impact of policy
changes on the irrigated subsector.

The Youngblood and Leonard (1983) study builds on the cost of production data
in Sattar’s (1982) study as a basis for sensitivity analysis. They analyzed the sensitivity of
several indicators for crops grown in the Gezira to changes in yields, input costs, border
and producer prices and exchange rates. These indicators are foreign exchange
dependence, value added, domestic resource cost coefficients; and private profitability.

The study concluded that under current cost levels and yields, all crops are unprofitable

7

to the producers most of the time. The production and export of cotton would generate
the most foreign exchange, and wheat would generate the least. Irrigated groundnuts has
the greatest comparative advantage and wheat has the greatest comparative disadvantage
most of the time.

Chhibber and Hrabovsky (1983) examined several aspects of agricultural prices
and investment policy in the Sudan using a linear programming framework. They
concluded that: l) the price elasticities of supply for important agricultural products in
the Sudan are very low ranging from 0-0.5 except for sorghum; 2) rates of return for
major purchased agricultural inputs were well above their market value; and 3) plans for
the expansion of irrigated land were adequate. They made no attempt to include a
subcomponent into the linear programming model to deal with the impact of policy
changes on the irrigated subsector.

D’Silva and McKaig (1985) focused on the effects of the Blue Nile flow during the
1984 drought by analyzing alternative crop production scenarios and their implications for
water use and food crop production in the Gezira scheme. The analysis shows that
reducing the area under cotton by 200,000~ acres could lead to increases in cereal output
of between 240,000 and 390,000 tons depending upon the assumptions. Reallocating
areas would also lead to savings in water on both an annual and seasonal basis.
Reduction in cotton production would have little effect as Sudan had not been able to
market all its cotton. They concluded that the increase in grain production would lower
domestic prices, increase consumer’s purchasing power, while at the same time reducing
food aid needs.

D’Silva (1986) examined policy issues in the irrigated subsector and its role on

Sudan’s agricultural economy. He contended that the present system of production leads

8

to an inefficient utilization of scarce resources like fertilizer. D’Silva proposed an
evaluation of changes in cropping patterns, institutions and production technologies to
help generate foreign exchange, government revenue and farm income.

Brandt et al. (1987) examined the prospects of the Gezira scheme’s contribution
towards strengthening the overall national gain supplies through import substitution of
wheat and/or production for local consumption and export of surplus sorghum. They
concluded that whereas it is feasible to intensify wheat production with seed and
fertilizer application; an increase of sorghum production beyond subsistence is not
economical.

Jansen (1986) provided a framework for the analyses of crop profitability for
major crops in the Sudan. Her analysis of Sudan’s comparative advantage in the
production of the different crops can be of a tremendous use to policy makers in their
establishment of support prices and the formulation of agiculture policy for all crops
gown. The agricultural policy making considerations can determine the crops the
Government should encourage. For instance, if the government wishes to encourage
goundnuts production, it can do so by the alteration of subsidy, an increase in price or
subsidization of the costs of production.

Plusquellec (1990) focused on the extent to which the design of the Gezira
irrigation system fosters effective water management and provides equitable, reliable,
timely water distribution to farms. He analyzed water efficiency, effectiveness of
maintenance and cost recovery; and concluded that water distribution from the Gezira

system to the field is efficient, timely and reliable as long as the canal system is

adequately maintained.

9
1.5 AN OVERVIEW OF THE RESEARCH APPROACH

The study uses both primary and secondary data. The secondary data on the
macroeconomy, agiculture sector and the irrigated subsector is used to assess the
possible effects of government intervention on agicultural production and trade. Studies
on Sudan’s comparative advantage in the four crops gown in the Gezira will be reviewed
thoroughly on the basis of the domestic resource cost ratios calculated by Youngblood
(1983) and Jansen (1989). Domestic resource cost ratios will be calculated for the
1989/90 survey season.

Primary data was collected for the 1989/90 cropping season. The information
collected on the socioeconomic conditions of the tenants and their farming environment
will be used in the development of a linear progamming model for the ”representative
farm” (Model farm) in the Gezira. The cropping activities in the model include medium
and long-staple cotton, wheat, goundnuts and local and hybrid sorghum, and the
resources are land, labor, irrigation water and operating capital

The Gezira model attempts to evaluate whether the production resources are
allocated optimally and the prospect of policy reforms that would create a favorable
incentive structure so as to stimulate high productivity and foster further development of

the Gezira Scheme and the irrigated subsector in general.

1.6 ORGANIZATION OF THE STUDY
Chapter II deals with the methodological approaches to the research, it outlines

the conceptual framework, research questions, choice of the research area, sampling

procedures, data collection and data utilization.

10

Chapter III outlines Sudan’s national policy failures that have had deleterious
effects on the important irrigated subsector on which Sudan’s economy depends. It
attempts to trace the workings of the agricultural policy instruments and their impact on
the agiculture sector and food system. It ends with an examination of the allocation of
the Nile water resource under the 1929 and 1959 Nile waters ageements between Sudan
and Egypt.

Chapter IV outlines the socioeconomic, physical and policy environment of the
Gezira Scheme. With a special attention being paid to climate, land tenure, cropping
pattern, production system, resource use, agicultural research and crop marketing
services.

Chapter V describes the household characteristics and constraints facing the
survey tenants. It places a lot of emphasis on the utilization of land, labor, water, capital
and production technology, and ends with a discussion of crop enterprise budgets for
long-staple cotton, medium-staple cotton, wheat, goundnuts, local sorghum and hybrid
sorghum.

Chapter VI provides a framework for the analysis of crop profitability, reviews
studies on comparative advantage in the production of crops in the Gezira, and presents
domestic resource cost ratios for medium-staple cotton, long-staple cotton, wheat,
goundnuts and sorghum for the 1989/ 90 survey season.

Chapter VII presents the structure of the linear programming model for the
Gezira that employs land, labor, irrigation water and capital resources for the production
of medium-staple cotton, long-staple cotton, wheat, goundnuts and sorghum. The
discussion includes mathematical representation, model assumptions and the model

components: objective function, activities, restrictions and the righthand side.

11

Chapter VIII discusses the results of the Gezira model applicable to resource use,
cropping patterns, farm profitability and farm income. It includes an evaluation of
information on the objective function, enterprise mix, shadow prices, cost of forcing
excluded activities into the model and the stability limits.

Chapter IX summarizes the research findings, draws conclusions and policy
implications, indicates the limitations of the study; and gives suggestions for future

research.

CHAPTER II

RESEARCH METHODOLOGY

2.1 CONCEPTUAL FRAMEWORK

The agicultural sector is particularly sensitive to macroeconomic policies, and
many food and agicultural policies are inextricably linked with macro policies since the
Sudanese economy is predominantly agricultural. The important policy issues comprise:
the tax system, exchange rate policies, production policies, input and output policies and
trade policies.

The single most important agiculture policy issue is: how to resolve the demands
of both rural producers and urban consumers. A healthy agricultural sector should be
able to provide a basic supply of food at prices within reach of urban consumers while at
the same time generating adequate levels of income, employment and foreign exchange.
But Sudan’s weak agiculture sector does not produce sufficient quantities of agricultural
products to support the population. Shortfalls are then met through imports while prices
are controlled through subsidies. Food rationing and the attendant hardships. are the
norm. The policies that favor consumers tend to reduce the incentives to producers for
increased gowth in agricultural production. Decreased growth in food production
exacerbates the food shortage problem thereby causing an increase in imports of food
and fiber. Depending upon the international price levels for the imported goods,
subsidies may also be needed to make the food affordable. Balance of payments and
external debt problems could become more severe. The net effects of monetary, fiscal,

trade and agicultural policies could produce net positive/ negative protection rates.

12

13

Subsidies will lower farm incomes as well as reducing incentives to adopt improved
techniques of production. Macroeconomic distortions in the economy can impose an
implicit tax on agriculture leading to the distortion of resource allocation and loss in
economic welfare.

The theoretical approach in this study is to employ: 1) domestic resource cost
(DRC) ratios to review and evaluate the comparative advantage of crop production in
the Gezira, and 2) linear progamming (LP) model of the Gezira Scheme to obtain
optimum farm plans under the existing resources constraints. This information is central
to developing production and trade strategies for the irrigated subsector in general and
the Gezira in particular.

21-1 W

The domestic resource cost ratio is the ratio of the factor costs to value added in
economic prices. Because this ratio includes domestic factor costs, it measures not only
policy effects on tradable inputs and outputs, but the opportunity costs of using domestic
factors in production and can therefore serve as a measure of comparative advantage.
The costs of domestic factors are essential in determining economic profitability and the
domestic resource cost mesurement allows economic profitability to be compared across
commodities. An economically profitable commodity will produce more than enough
value added to remunerate labor and capital and reimburse capital owners (Jansen,
1989).

Bruno (1972) brought the concept of domestic resource cost ratios into common
use for the purpose of measuring comparative advantage. A product has a comparative
advantage if, at equilibrium domestic prices, the domestic resource cost ratio is equal to

or lower than the prevailing exchange rate. For a given country one product would be

14

more competitive in international markets than another product because the first
requires fewer domestic resources per unit of foreign exchange earned or saved.
Domestic resource cost ratios apply to goods that are tradable or potentially tradable.
The domestic cost items have to be distinguished from the imported ones. Net foreign
exchange earnings or savings are defined by netting out the cost of imported inputs from
the value of the output. The net foreign exchange cost per unit of output is then divided
into the sum of the domestic costs of production to give an expression for the cost in
"domestic resources" of earnings or savings of foreign exchange. If the domestic resource
cost ratio is less than one, it means the country has a comparative advantage in the
production of a particular commodity because it can exchange domestic resources for
foreign exchange at a rate below that at which the economy as a whole converts the
domestic resources into foreign exchange. If the domestic resource cost ratio is greater
than one, it implies that the country has comparative disadvantage in the production of
the particular commodity for export or as an import substitute.

The domestic resource cost ratio has a useful interpretation. It tells how much of
the economy’s domestic resources are being spent to earn or save a dollar of foreign
exchange. If this number is greater than the exchange rate for a given product then it is
evident that the product should not be promoted for export or import substitution. The
policy usefulness of the domestic resource cost arises in practice because in many
occasions when there is a violation of the above rule, pointing it out in an objective,
quantative terms will highlight the need for policy change. When the domestic resource
cost indicates comparative advantage in more than one product, other factors should
enter the deliberations about which product to promote. These important factors include

profit margins and distributional effects of policy (Norton, 1988).

15
2.1.2 LINEAR PROGRAMMING MODEL

Linear progamming deals with the problem of allocating limited resources
among competing activities in the most optimal way possible. One must select the level
of alternative activities that can compete for the scarce resources. Linear progamming
has been applied to answer questions in agiculture policy in the less developed countries
for the last twenty years. Linear progamming will be used to find the optimal
combination of farm activities to maximize farm income for given prices, input-output
coefficients and resource constraints. Less binding constraints that reflect incentive
effects can then be introduced into the model to find the plan that indicates optimal
changes in the cropping patterns, resource productivity and farm income.

Producers tend to maximize profits within some given constraints. The farmer’s
objective function could be to maximize profits subject to obtaining a plentiful supply of
food for the family for the entire year. The mathematical formulation of linear
programming has three main features: 1) an objective function to be maximized or
minimized; 2) resource constraints; and 3) the activity set. The expressions of the
equations are given below in matrix notations.

The objective function is in the form:

Max. Z - C’X
where Z represents the returns to be maximized, and X are the decision variables. C’
measures the marginal contribution of each decision variable.

The linear restrictions are of the form are:

aX _<_ b
where: a represent how much of a resource is required for each unit of activity, X are

the decision variables and b represent the total amount of resource available.

16
X30

specifies that only non-negative levels of each decision variable will be subject for
examination.

Linear progamming provides the means to find the levels of decision variables
that would maximize the objective function subject to the fixed conditions on the farm

and non-negativity requirements.

2.2 RESEARCH QUESTIONS

The lack of adequate research and an appropriate technology suitable to the local
environment, as well as inappropriate economic development policies, have impeded
increased agiculture production and the provision of adequate food supplies. Sudan
attempted to mobilize revenue for economic development through high taxes on
agicultural output and income, especially on export crops whose prices are easily
subjected to official controls. The misguided belief was that an increased government
role in production and development would improve the economy. In the Gezira Scheme,
excessive government involvement in production and input procurement decisions
hamper the ability of the tenants to produce efficiently. The government preference for
controls prevents the private sector to compete with or complement the inefficient state
monopolies.

The excessive state controls have depressed the prices of domestic agiculture
commodities relative to manufactures, discouraged increased agiculture production and
reduced farmers incentives to produce. The stagiant agiculture has failed to generate
foreign exchange, cheap food supplies and aggregate savings that can be used to spur the

gowth of the domestic markets and the economy.

17

The specific issues this study seeks to address include the following:-

The excessive government controls of cropping pattern, resource use, production
and marketing decisions that hamper the ability of the Gezira tenants to produce
efficiently.

Lack of technology suitable to the Gezira environment has impeded increases in
agicultural productivity.

Lack of support services has contributed to the decline in agicultural production

at the Gezira Scheme.

2.3 CHOICE OF THE STUDY AREA

The following factors were instrumental in selecting the Gezira irrigation

Scheme as a study area:

1.

2.

It is the backbone of the Sudanese economy.

It is the oldest and largest irrigation Scheme in the Sudan.

It is the basis of the design of the other irrigation Schemes.

Many of the irrigation problems facing the Gezira Scheme are similar to those

of the smaller Schemes.

2.4 SAMPLING TECHNIQUES

The main Gezira tenants are organized into 7 goups, 51 blocks, 48,350 tenancies

and an average farm size of 20 feddans each. A sample of 96 tenants were selected at a

random. Table 2.3 presents the sample selection procedures where four blocks were

randomly selected from the seven groups. Wad Numan from the South group, Tayba

from the Elmesselemia goup, Turis from the Wad Shair goup and Loata from the

18

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

.=======Ll
TABLE 2.1 SAMPLE SELECTION IN THE MAIN GEZIRA.
GROUP\TENANT’ NUMBER NUMBER SELECTED NUMBER SAMPLE
BLOCKS TENANTS BLOCKS TENANTS SIZE
1 South 7 6,577 Wad Numan 879 24
2 Center 8 5,640
3 Elmesselemia 9 5,121 Tayba 1,011 24
4 Mad Habouba 6 7,009
5 Had Shair 6 6,803 Turis 1,233 24
6 North 7 7,902 Loata 1,661 24
7 Northwest 8 9,298
TOTAL .51 48,350 4 4,784 96
Source: Sudan Gezira Board. l

 

 

 

 

North goup. The total number of tenants in the four administrative blocks is 4,772. Two
to three minor canals were selected at random from each block and a sample of 24
tenants was selected systematically taking into consideration the position of the tenancy
along the minor canal. The sample of 96 tenants was deemed adequate for the planned

study given the financial and logistical limitations.

2.5 DATA COLLECTION

Data were collected from both primary and secondary sources. Primary data
were collected by interviewing the 96 tenants in the four blocks. The purpose was to
obtain information on the socioeconomic characteristics, and farm and non-farm
activities. The information sought was on the socioeconomy and kinds of farm
operations: number of household members, age, level of education, farm work, frequency

of irrigation, timing of different cultural operations, costs of production, available labor,

19
available capital, subsistence requirements, yield history, farming strategies, farm
profitability, land, labor, capital and water constraints and government policy on the
farm.

The field data collection was from June 1989 to May 1990. Eleven experienced
Socioeconomic Unit, Sudan Gezira Board enumerators who reside 2-3 persons in each of
the four selected blocks filled in the questionnaire. They obtained the information on
monthly basis throughout the whole 1989/90 cropping season. The main difficulty faced
was translation of questions from English to Arabic and vice versa. Shortages of vehicle
spare parts and gasoline as well as rains in August and September prevented the

researcher from making frequent visits to the research sites.

2.6 DATA UTILIZATION

The cropping activities include medium-staple cotton, long-staple cotton, wheat,
goundnuts and sorghum; and resources and their constraints include land, labor, capital
and irrigation water.

The information collected from the field together with the secondary information
from Agricultural Research Corporation, Sudan Gezira Board, Ministry of Agiculture
and Ministry of Irrigation was used to develop crop labor requirements per month,
average labor and crop prices per season, supply and demand for irrigation water, and
enterprise budgets.

The data was used in the development of a linear progamming model to obtain
optimal farm plans in the Gezira Scheme under the existing resource constraints.
Postoptimality analyzes were conducted where less binding constraints that reflect

incentive effects were then introduced into the model to determine their impact on

20

cropping patterns and resource profitability. The data was also used to calculate domestic

resource cost ratios for the crops grown in the Gezira in the 1989/90 survey season.

CHAPTER III

NATIONAL POLICIES

3.1 FRAMEWORK FOR POLICY ANALYSIS

The framework for policy analysis regards the goal of government as that of
maximizing social welfare, and it chooses target variables which it sets out to achieve in
the pursuit of this overall goal. Thus it selects the best policy instruments to achieve the
goals given constraints, uncontrollable factors and side effects that could be detrimental.
The major components are goals, constraints, instruments and side effects (Ellis, 1992).

The two major objectives are efficiency and equity. Efficiency deals with the
attainment of economic optimum levels of commodities and services from a set of given
resources. Equity deals with the distribution of the total output between individuals and
social goups within the society. Policy instruments designed to increase output will have
varying effects on income distribution and those designed with equity considerations in
mind will have direct or indirect effects on output. Efficiency is objective and equity
subjective, and the two may conflict.

Important constraints such as shortage of foreign exchange, budget deficit or low
world export prices are relative to existing technology that can improve resource
productivity or make new resources available. Policies that seek to accelerate
technological change directly or indirectly are necessary.

The government uses policy, instruments to implement its policies. A single policy
instrument could accomplish more that one objective or a set of policy instruments on a

set of policy goals. These policy instruments will have impact on the small farm systems.

21

22

Pareto optimum, Pareto criterion and compensation criterion are the key
concepts in welfare economics. Pareto optimum is defined for society as a whole in
which it is not possible to make one person better off without making another person
worse off. A Pareto criterion states that a policy change is desirable if no one is made
worse off by the change, and a compensation criterion states that a policy change may be
worth considering provides that the gainers could potentially compensate the losers and
still be better off than they were before the change.

The partial equilibrium analysis concepts of producer surplus and consumer
surplus enable the compensation criterion to be made operational. The change in the
economic variables and the knowledge of the elasticities of supply and demand in
markets affected by the policy changes are important for the measurements of the effects
of the policy. The gains and losses from policy are measured in financial and, economic
prices that represents the opportunity cost to society of farm inputs and outputs.
Domestic resource cost ratios can be used to measure the divergence between the
financial prices induced by policy intervention, and the economic prices represented by

world prices for tradable inputs and outputs.

3.2 MACROECONOMIC POLICIES
Sudan is plagued by macroeconomic policy failures apparent in high inflation,
overvalued currency, high unemployment, excessive bureaucracy, government budget
deficits, trade deficits, mounting international debt, and economic and related political
instability. '
Political instability has had an important impact on the economy. Political

factionalism has plagued the country for the most part since independence in 1956.

Factionalism among the political parties paved the way for four military coups in 1958,
1969, 1985 and 1989. The civil war that erupted in 1983 not only cost much in human lives
and those displaced; it has also drained economic resources and manpower away from
economic development. High expenditures to finance the war contributed a great deal to
a large monetary expansion and an acceleration of inflation. Sudan has also been
affected by major exogenous shocks that include drought in 1983/85 and 1990, as well as
floods and locusts in 1988. These shocks have had a severe adverse impacts on

agicultural output, and consequently on GNP. Table 3.1 shows the percentage share of

GNP by sector.

 

23

TABLE 3.1 PERCENTAGE SHARE OF GDP BY SECTOR, 1984/5-1988/90.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SOURCE \ PERIOD 1984/85 1985/86 1986/87 1987/88 1988/89
W. 29.3 35.6 34.8 30.8 36.1
Agriculture 29.3 35.6 34.7 30.7 36.0
Mining 0.0 0.1 0.1 0.1 0.1
W. 16.3 15.2 15.2 15.8 14.5
Manufacturing 8.8 8.6 8.7 8.8 8.2
Construction 5.8 4.8 4.7 5.1 4.6
Public Utilities 1.9 1.8 1.8 1.9 1.8
W 54.4 49.2 50.0 53.4 49.4
Trans & Storage 8.6 9.5 10.0 9.9 9.4
Commerce & Hotel 22.7 13.0 13.9 16.2 13.9
Finance & Estate 13.2 12.1 12.7 13.4 12.7
Govt Services 8.2 12.8 11.6 11.9 11.6
Personal service 1.7 1.8 1.8 1.9 1.8
GDP-FACTOR COST 100.0 100.0 100.0 100.0 100.0

 

 

Source: Ministry of Finance, 1989.
W

 

 

24

Government performance in revenue collection has been very poor because of: l)
a narrow tax base structure -- the introduction of islamic tax (zakat) in 1985 for
conventional income taxes reduced revenue as well as eliminating excise duties on a
number of products; 2) price controls and exchange rate overvaluation; 3) poor
performance of the parastatal corporations; and 4) disruptive tax policies.

Twenty eight percent of the annual credit flows from the banking system goes to
the public corporations. The rapid gowth in money supply results in high inflation rates,
negative real interest rates and high commodity prices. Private savings average about 7
percent of GDP but government savings registered negative rates for all the 1980’s.
Remittances from the 350,000 Sudanese nationals working in the Gulf countries have not
helped because: 1) government exchange rates, trade, investment and financial policies
have not been conducive to attracting remittances; and 2) the large foreign interest
obligations on government debt reduces national savings on a commitment bases.
Investment has fallen from 22.8 percent of GDP in 1982 to a mere 9.1 percent in 1989.
New investment has been discouraged by cumbersome investment regulation processes
and lack of long-term finance from the domestic financial systems.

-. Table 3.2 presents Sudan’s balance of payments. Growth in imports have been
rapid, financed by foreign aid, Arab fund, remittances from Sudanese nationals working
abroad; and foreign commercial borrowing in the late 1970’s. Exports on the other hand
have declined due to; 1) over-regulation of irrigated agriculture; 2) inefficiencies in
parastatal monopolies in charge of export marketing; 3) excessive licensing requirements
and setting of minimum prices for exporters 4) unpredictable bans on exportation of
particular products eg. sorghum; and 5) inappropriate exchange rate policy. The

overvaluation of the exchange rate discriminates major export products (cotton, gum

25

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TABLE 3.2 BALANCE OF PAYMENTS, 1984/85-1988/89. 1
SOURCE \ PERIOD 1984/5 1985/6 1986/7 1987/8 1988/9
Exports & NFS 800 702 702 661 750
Imports & NFS 1,395 1,338 1,132 1,456 1,560
Deficit (-) -594 -636 -431 -795 -810
Net factor income 478 -556 -522 -649 -706
Curr Private Trans 430 350 250 445 297
CURR AC B C 642 -842 -703 -999 -1,216
Official Transfers 288 412 280 369 271
Bal curr Accounts -354 -430 -423 -630 -945
Net M&LT Loans -322 -477 -232 -230 -329
Errors & Omissions -189 -145 -191 -193- -36
W -865 -1,052 -846 -1,053 -1,309
Net reserve changes 100 -13 220 280 177
Capital flows 257 270 110 13 00
Net arrears changes 508 795 516 760 1,132
1/ Millions of US Dollars.
Source: World bank, 1990a. _r

 

 

arabic) while favoring cheaper imports into the country. This Shifts Sudan towards
negative balance of trade. The ratio of imports of goods and non factor services to GDP
in real terms increased from 18 percent in 1976 to 30 percent in 1983 while that of exports
decreased from 16 percent to 13 percent. The real ratio of imports to GDP fell from 30
percent in 1984 to 19 percent in 1989. External terms of trade increased at a trend gowth
rate of 0.6 percent a year from 1976 to 1982, and 2.6 percent a year from 1982 to 1989.

The external debt has risen from $3.8 in 1978 to $ 15 billion in 1992. Arrears

constitute about 60 percent of the outstanding debt, rising from $1.5 billion in 1985 to $8.4

26

billion in 1990. The external debt now stands at over 1,500 percent of exports of goods
and services, and about 150 percent of GDP. It represents $500 of debt to every
Sudanese, compared to the Sub-Saharan Africa per capita external debt average of about
$296. Sudan’s debt service for 1989 has averaged about 115 percent of the value of exports

of goods and services (World Bank, 1990a)

3.3 AGRICULTURAL POLICIES

Policy interventions attempt to alter the allocative position of farmers by
changing the relative prices of inputs and outputs; and the technical production frontier
by raising the productivity of existing resources. Price, marketing, input, credit,
mechanization, land tenure, research and irrigation are the most important agicultural
policy instruments.

W3 Farm prices allocate resources between outputs, distribute income
and determine the rates of return to agiculture. Governments do influence the three
roles that farm prices play. Price stabilization progams have been confined to a few
strategic crops, around a long run trend and on flexible import policies so as to
supplement buffer stocks.

W: Governments have the tendency to intervene in agicultural
marketing channels. Monopoly marketing parastatals tend to fail because of high
overhead costs, poor capacity utilization, poor performance, and residual producer price
determination. The main function of the state is to provide price monitoring and market
information services of a kind that the private sector cannot supply.

Mg: The state intervention has been in the form of price, subsidies and

delivery systems to replace the private sector in farm inputs. Subsidy on fertilizers can

27

increase its utilization. The quantity and the timeliness of farm input delivery can be
critical. Regulation of agricultural chemicals that can be hazardous and the transmission
of information on the use of new inputs in order to avoid mistakes and waste scarce
resources.

Credit poliggzz The traditional approach is to supply subsidized credit to farmers
at low interest rates. The main emphasis needs to be on the creation of viable private
and public credit institutions. These credit institutions should charge real interest rates
that reflect the opportunity cost of funds, thus encouraging savings and lending.

MW: Prices should fully reflect social opportunity cost. The pace
of mechanization should reflect the true underlying changes in resource scarcities in
agriculture, not the artificial lowering of machinery prices resulting in an inefficient
substitution of machines for labor. The role of the state is to ensure that machinery
prices are reasonable, encourage the development of a much wider range of mechanical
technologies at the labor using end of the range of technical alternatives.

w: Economists do recognize the rationale for both efficiency and
equity gains from equal size distribution of farms but may oppose the property rights
involved. Experiences with cooperatives, communal and state farms have not been
encouraging. The institution of freehold in place of previous village or community land
allocation is a continuing process. Successful land reform creates a freehold or leasehold
small-farm structure as a results of the reform.

mm: This is about the generation and diffusion of new technology to
farmers. Research policy is a public good to be funded and conducted by the state.

Higher returns to research call for strong emphasis being placed on participation and

28

interaction with farmers. It concerns with technical rather than allocative efficiency at the
farm level.

Iggigation polig: Irrigation policy is about the role of the state in promoting or
providing irrigation technology, management of large-scale irrigation schemes and ways
of charging the cost of water as an input to farmers. Canal irrigation is a public good, its
operation involves certain kinds of market failure. We need to improve the recurrent
operations and maintenance of irrigation canal. Income of water management agencies
should depend on service fees paid by farmers with mechanisms for increasing the
interdependence and trust between both parties.

Sudan’s agicultural policy goals include: the generation of employment and
income, government revenue, and the achievement of food security, political stability and
economic development. The poor performance of the agriculture sector could be an
indication that these policies may not be well articulated.

Table 3.3 presents the operations of agicultural policy instruments on crop
production, consumption and marketing. The production system of major cereals can be
characterized by low trend gowth rates and sharp annual fluctuations. Sorghum is
usually in surplus, wheat in deficit and millet in balance. Sudan has never been self-
sufficient in cereals since 1985. Production variability is high depending on weather, labor
availability, transport and storage infrastructure. Food insecurity is felt through
fluctuations in food availability, food prices and agicultural employment.

The consumption pattern is such that the urban high income goup show
preference for wheat and sugar in their diets. In the rural areas, the farmers derive
their income primarily from farming; and landless laborers and pastoralists depend on

wages. The demand for food crops is differentiated by income goups as well as by the

29

 

W5 ms nu:

l1

GRICUITUR

E

POLICY AID FOOD SYSTEM

 

AGRIC POLICY INSTRUMENTS

 

COTTON

 

WHEAT

 

PEANUTS

 

SORGHUM

 

PRODUCTION

 

Credit Subsidy

 

Exchange rate Subsidy

 

Fixed Price

 

Floor Price

 

 

 

 

 

CONSUMPTION

 

Consumer Subsidy

 

Ration System

 

 

 

 

 

. MARKETING

 

Government Monopglyg,

 

Strategic Reserve

 

Buffer Stock

 

Trade Controls

 

 

 

 

 

PRODUCTION - FOOD SYSTEM

 

Traditional Farmers

 

. Mechanized Farmers

 

Irrigated Farmers

 

 

 

 

 

CONSUMPTION - FQOD SYSTEM

 

Urban High Income

 

Urban Middle Income

 

Urban Low Income

 

Rural High Income

 

Rural Low Income

 

Rural Landless

 

Rural Pastoralists

 

 

 

><><><><><

 

><><><><><><><

 

MARKETING - FOOD SYSTEM

 

Segmented Markets

 

Formal Markets

><><

 

Informal Markets

 

 

 

 

 

 

quqnh-

 

30

type of commodities they consume. Wheat is consumed by all classes of urban
consumers, while sorghum and millet are mainly consumed by rural households. The bulk
of peasant consumption is met from their own production; while urban consumption is
met through surpluses from large farms of the mechanized subsector. Most of the surplus
is transported and marketed by private sector merchants. Trade flows are from the
surplus areas to the food deficit urban centers but this movement is constrained by high
transport costs such that many households lack access to food when they need it. The
Sudanese gain market is divided into two sectors; an open market and a government
run concessional food supply system. However, most of the wheat under the government
distribution system goes to the urban population. Approximately 75 percent of the rural
population have no access to the government subsidized food. Thus they are not served
by the system.

Two policy issues are excessive government control and an inappropriate
exchange rate. Sudan maintains a dual exchange rates; an official exchange rate of LS
4.5/S and a commercial exchange rate of LS 12/$. These rates are used to value
different commodities eg. agicultural inputs are valued at the official rate and cotton
exports at the commercial rate. This affects decision making on imports, and provides a
disincentive to producers and exporters. The government extracts surplus through low
crop prices, marketing monopolies, export taxes and duties.

Excessive government involvement in production and input procurement hampers
the ability of the tenants to function efficiently. They should be free to combine the
resources at their disposal to produce the goods and services for which local and external
markets exist. Improvements in the entrepreneurial and management ability of the

tenants, adjustment in the structure of incentives plus improvements in extension,

31

marketing and credit facilities can lead to an expansion of personal enterprises leading to
an increase in productivity. The government preference for control means that the
private sector cannot compete with the overstretched inefficient monopolies. There is
need to replace the controls with a minimum core of regulations on production and
exports; and an exchange rate policy that truly reflect the scarcity of foreign exchange in
the economy and actual production costs on exports.

High producer prices lead to increases in domestic production, consumer prices,
reduces consumption and increases imports. Consumer prices and government revenue

will increase.

3.4 AGRICULTURAL SECTOR

The Agiculture sector consists of three subsectors (traditional rainfed,
mechanized rainfed, and irrigated) each of which produce both food and export crops.
3.4.1 The traditional rainfed subsector of 9.8 million feddans produces sorghum, millet,
sesame and goundnuts mainly for subsistence and gum Arabic for export. Cattle, sheep,
goats and camels are raised on the vast pastures of this subsector. The bulk of the small
farmers are found in the traditional subsector. The smallholders lack access to inputs,
credit, markets, proven technology and transport. The traditional subsector uses no
modern inputs such as fertilizers, insecticides, herbicides and machinery; and production
is oriented towards meeting subsistence needs.
3.4.2 The mechanized rainfed subsector of 9 million feddans and LOGO-1,500 feddan
individual holdings is operated by the private sector with the government providing
inputs and credit. Sorghum and sesame are the major crops gown for both domestic

consumption and export. Sorghum contributes 4 percent and sesame 7 percent to export

 

TABLE 3.4 TOTAL CROP AREA, OUTPUT AND AVERAGE YIELDS.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CROP\PERIOD 1984/85 1985/86 1986/87 1987/88 1988/89
COTTON

Area 876 807 851 772 792
Output 4,016 2,881 3,931 3151 3494
Yield 4.6 3.5 4.6 4.1 4.4
M

Area 115 397 282 343 393
Output 79 186 157 181 247
Yield 687 469 557 528 628
GBQQNQNQIS

Area 1,758 951 1,290 1,629 1,625
Output 386 274 364 432 587
Yield 220 288 282 265 361
SORGHUM

Area 8,159 13,155 . 11,805 8,069 13,279
Output 1,097 3,595 3,277 1,363 4,421
Yield 134 274 289 169 311
MILLS]

Area 1,853 2,474 2,233 2,285 2,795
Output 133 132 216 233 195
Yield 72 53 97 102 70
GUM C

Output 16 18 25 26 35

 

Area: ’000’ Feddan; Output: ’000’ Mt; Yield: Kg per Feddan

 

Cotton: Output ’OOO’Kantars; Yield: Kantars per Feddan.

 

 

Source: Ministry of Agriculture, 1990.

 

 

33

earnings. The farmers face yield variability, input scarcity, low level of cultural practices,
and lack of improved technology. Shifting cultivation and cultivation of fallow land not
only degade the soil but also encroach on land for traditional farming and livestock
raising; monocropping of sorghum also worsens the situation. Pastoralists and small
farmers are being pushed to the marginal lands. Pastoralists could gaze their livestock
on crop residues and the small farmers provide the seasonal labor but the
marginalization of the pastoralists outweighs the benefits.

3.4.3 Irrigated subsector covers 4.4 million feddans comprising of the large scale
irrigation schemes and small scale pump schemes on the Blue and White Niles. Cotton,
wheat, goundnuts and sorghum are the major crops gown. These schemes are owned by
public corporations. Tenants experience some limited access to inputs and credit, poor
management and incentive structure, high transport costs and government over-
regulation. Table 3.5 shows the area, output and yield of the crops gown in the irrigated
subsector.

The area in the irrigated subsector is under flood, pump and gavity irrigation
from the Nile waters. When Sudan became independent in 1956 approximately two
million feddans were under gravity irrigation in the Gezira scheme and the remainder
was on the flood and pump irrigation of the Nile waters.

The government doubled the area under irrigated agiculture after independence.
Table 3.6 shows that the period between 1978-1986 witnessed the establishment of seven
irrigation schemes:- Rahad, Abu Naam, El Suki, Hagar Asalaya, Kenana and pump
schemes along the Blue and White Niles. Fortunately, the location of these schemes to
the south of Sennar dam where the precipitation is more than 400 mm helps reduce the

strain on the Nile waters. The schemes under gavity irrigation are the most important

34

 

TABLE 3.5 TOTAL AREA, OUTPUT AND YIELD OF IRRIGATED CROPS.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CROP \ PERIOD 1984 / 85 1985 / 86 1986 / 87 1987 / 88 1988 / 89
COTTON

Area 747 796 729 725 722
Output 2,790 3,828 3,130 3,387 3,217
Yield 3.5 4.6 4.1 4.4 4.3
MEAT

Area 397 282 343 393 500
Output 186 157 181 247 320
Yield 469 557 528 628 640
QROUNDN UIIS

Area 146 234 251 217 156
Output 94 171 198 189 137
Yield 644 731 789 871 878
523%

Area 1,123 , 822 711 846 791
Output 658 454 352 468 441
Yield 586 552 485 553 558

 

Area: ’000’ Feddan; Output: ’000’ Mt; Yield: Kg per Feddan

 

Cotton: Output ’OOO’Kantars; Yield: Kantars per Feddan.

 

 

Source: Ministry of Agiculture, 1990.

 

and are state owned. They include Gezira, Rahad and New Halfa, which together make
up for 60 percent of the total irrigated area in the Sudan. However, the 2.1 million
feddan Gezira scheme irrigated by the Sennar dam on the Blue Nile is the oldest and

most dominant. Ninety eight percent of Sudan’s cotton, 100 percent of the wheat, 55

percent of the goundnuts and 26 percent of the sorghum is produced in the irrigated

 

1

35

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TABLE 3-6 MAJOR IRRIGATION S HEMES IN,THE SUQANI

SCHEMES TENANTS AREA CROPS CROP % WATER SOURCE
BLUE NI E

Gezira 48,350 1135400 C-w-S/G-F 75 4,000 G
Gezira* 53,900 946,300 C-W-S/G-F 75 3,600 G
Rahad 12,000 300,000 C-S-G 100 1,139 316
Pump 8 245,418 C-S/G-F 67 876 P
Pump N 103,729 C-S-G-F 67 ---

Suki 86,920 C-S/G-F 67 330 P
Private 63,500 C-S/G-F ~—- 165 P
Guneid 2,000' 45,400 C-W-S/G 83 180 P
Guneids 2,320 38,700 Sugar/G 67 230 P
Sennars 32,500 Sugar Perm 388 P
Abunaam 30,000 Kenaf 100 100 P
Seleit 20,000 Fodder -—- P
Sennar 16,661 C,Sugar ---

Sub Tot 3064528 11,008
UHITE NILE

Pump 530,000 C-W-S/G 75 900 P
Kenana 81,000 SUgar Perm 968 P
Asalaya 35,000 Sugar Perm ‘363 P
Sub Tot 646,000 2,231
ATSARA

Girba 22,000 350,000 C-w-S/G 100 1180 G
M N -

Pump 351000 w,S,D,CR I [1200 P
Total 4411528 I I 15619

 

Kgy: Crops: C-Cotton w-Nheat G-Groundnuts S-Sorghum FsFallow

 

Water Sources:

 

 

 

P=Pump G=Gravity P/G-Pump/Gravity *aManagil Extention

 

 

36

subsector. The irrigated subsector contributes 9.9 percent to GDP. The pattern of
production relations at the Gezira scheme serves as a model for most of the gravity
irrigated schemes where the government provides irrigation water, the parastatal Sudan

Gezira Board provides inputs, and the tenants provide labor.

3.5 THE NILE WATERS

The Water utilization is governed by the 1929 and 1959 Nile waters ageements
between Sudan and Egypt. The yield of the river Nile as measured at Aswan is 84 billion
cubic meters of water. The actual mean flow is 84 billion cubic meters but evaporation
accounts for losses of 10 billion cubic meters.

Table 2.8 shows the water shares under the 1929 and 1959 Nile waters
ageements that govern the water allocations between Egypt and Sudan. Under the 1929
Nile waters agreement, Sudan was allocated only 4 billion cubic meters and Egypt 48
billion cubic meters. Sudan was to irrigate the Gezira during the winter months of July to
December. The 1959 Nile waters ageement raised Sudan’s share to 18.5 billion cubic
meters. A Permanent Joint Technical Commission (PJJ C) was established to plan for
Nile basin development, data collection and supervision of construction projects. Sudan’s
current water usage is 15.6 billion cubic meters per annum of which the share of the
Gezira Scheme is 7.6 billion cubic meters of water. An expansion of irrigated agriculture
to tap into the remaining 3 billion cubic meters can only come about with high level of
management. Competition for water could become a very serious bottleneck in the near
future.

Ahmed et al. (1988) believe that the 10 billion cubic meters reserved for

evaporation at Lake Nasser is too high. Sudan’s storage capacity is approximately 3

37

 

TABLE 3.7 NILE WATERS AGREEMENT 1929 AND 1959.

 

 

 

 

 

 

SHARES * \ YEAR 1929 1959
Egypt 48.0 55.5
Sudan 4.0 18.5
Unallocated 32.0 ----

Storage Losses ---- 10.0
TOT 84.0 84.0

 

 

 

* Billion Cubic Meters of water

Source: Gaitskell, 1959.

 

 

 

 

billion cubic meters. Most of the dams have lost their original storage capacity to
sediment deposition.

Sudan’s consumption is calculated at Sennar and Aswan, the difference is
accounted for by losses due to evaporation. Water consumption has been increasing
steadily indicating that the 18.5 billion cubic meter allocation will be fully utilized by the
year 2000. This occurrence could be averted by; 1) increases in the storage capacity; 2)

improvements in water management; and 3) increases in the yield of the Nile.

CHAPTER IV

CHARACTERISTICS OF AGRICULTURAL PRODUCTION IN THE GEZIRA

4.1 HISTORICAL DEVELOPMENT

In 1908 a pump scheme was established at Tayba for the production of cotton
under the management of Sudan Productions Syndicate (SPS). In 1925, the Sennar dam
on the Blue Nile, financed by a loan from the British government, was completed. Crop
production under gavity irrigation was started in the Gezira. Cotton was the main crop
but sorghum and beans were included in the rotation for subsistence and fodder. The
initial 300,000 feddans had expanded to 700,000 feddans by 1931 (Gaitskell, 1959).

The 1913 Gezira tenancy ageement established a triple partnership - government,
syndicate and tenants. The agreed upon production relationship specifies the
responsibilities of each of the three partners in the production process. The government
leases the land, builds and maintains the irrigation canals; the syndicate suppies credit
and management; and the tenant suppies labor, tools and undertakes field operations.
The profit from cotton production were distributed to the three partners according to a
prescribed formula (Tenancy ageement, 1927).

Following the nationalization of the Gezira Scheme in 1950, the Sudan Gezira
Board was established to replace the Syndicate. The area under irrigation was expanded
and crop production was diversified and intensified. Cotton continued to be grown as a
main source of foreign currency earner. Wheat was introduced as an import substitute
and goundnuts for export, domestic consumption and the maintenance of soil fertility.

Sorghum continues to be gown as a subsistence crop. Gezira produces 47 percent of

38

39

Sudan’s cotton, 11 percent sorghum, 60 percent wheat and 28 percent goundnuts. About
1.5 million people depend on the Gezira Scheme for their livelihood. With an area of 2
million feddans and a cropping intensity of 57 percent, the Gezira is "the largest farm in
the world under a single management" (J affe, 1992). Figure 4.1 presents the main

irrigation network in the Gezira Scheme.

4.2 CURRENT SITUATION AND ORGANIZATION

The Gezira Scheme lies between the Blue and the White Niles. The 5 million
feddans Gezira plain is suitable for irrigation because the gentle slope of 15 cm per
kilometer towards the White Nile requires little investment in levelling and canal lining;
and the clay soils allows little water loss through seepage. The erratic rainfall could only
support the production of short maturing drought-resistant sorghum combined with semi-
nomadic herding of cattle, sheep and goats.

The Gezira irrigation Scheme is fed by gavity irrigation from the Blue Nile. The
total area is 2.1 million feddans, 1.2 million feddans in the main Gezira and 0.9 million
feddans in the Managil extension established in 1957 following the construction of the
Roseires dam. The Gezira Scheme represents 47 percent of the total irrigated area and
10 percent of the total arable area under crop production in the Sudan.

The management of the Gezira Scheme is divided between the Ministry of
Irrigation (MOI) which is responsible for the irrigation network and the Sudan Gezira
Board which is responsible for agicultural operations and for determining the irrigation
water requirements. Figure 4.2 shows a typical irrigation shedule layout of a ten feddan

hawasha.

40

FIGURE 4.1 MAIN IRRIGATION NETWORK IN THE GEZIRA.

 

KHARTOUH

OHOURHAN ’ a- Mom“
' / ‘\

 

 

”A” r4- ”I“.
I

 

 

gurce: Ahmed it al.. 1988

 

 

41

The Ministry of Irrigation staff involved in the management is 3,200 persons of
whom 18 are University gaduates and 78 technicians. The Ministry of Irrigation is
organized into 7 divisions, each under the control of a division engineer (DE), 23
subdivisions under the control of assistant division engineers (ADE) and 56 sections
under the control of assistant engineers (AE). Each subdivision controls an area of
90,000 feddans. The ADE handles water control and the AE handles maintenance
operations. The main maintenance activities including silt and weed clearance are carried
out by two parastatal corporations: 1) Earthmoving Corporation (EMC), and 2) Irrigation
Works Corporation (IWC). They act as contractors to the Ministry of Irrigation for
maintenance work in the Gezira. The two corporations have a staff of 4,000.

The Sudan Gezira Board is responsible for the agicultural management of the
Scheme. These functions include administration, accountancy, technical, field and social
services.

Figure 4.3 shows the area under irrigation divided into 14 groups and further
subdivided into 103 blocks of about 20,000 feddans each, with the size and location
dependent on topographical and locational factors. Each block has a block inspector with
2-3 field inspectors who are responsible for the supervision of production. Samads (Sub-
inspectors) chosen among the tenants assist the field inspectors.

Figure 4.4 shows the tenancies arranged in "Numbers" of 90 feddans each
cultivated by one crop. Usually there are 18 "hawashas" of five feddans in each number.
The 4-course rotation is across four adjacent numbers and each tenancy will have a
"hawasha" in each of the four numbers (Sudan Gezira Board, 1990).

The Scheme employs 213,000 people of whom 2,200 are classified officials and

half a million permanent and casual laborers. The Scheme’s problems include lack of

42
FIGURE 4.2 A TYPICAL IRRIGATION SHEDULE LAYOUT.

WOW

sandman-
......_LF7

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ORIGINALDEWLEDHEDLAYOIH
OFA‘IOFEDDANHAWASM

 

Source: Plusquellec, 1990.

43

 

mummormmm

 

mnemonic:

II T

U

 

 

 

 

 

 

 

 

 

 

 

 

I 14 enoun J

[ nos steers H J
[1 11

I 1mm j
I I

[ 2.1 MILLION moms J

 

Source: Sudan Gezira Board.

 

 

 

trained agriculturalists, motivation, machinery and spare parts (Plusquellec, 1990).

The social services department of Sudan Gezira Board supplies social services
such as schools, adult education, drinking water and health clinics. The Board is
responsible for the maintenance of the infrastructure which includes roads and a railway
network of 1,050 Km in length used for transporting cotton. The literacy rate in the
Gezira is 53 percent as compared to the national rate of 35 percent.

The Tenants Union whose membership is open to all the tenants caters for the
interests of the tenants. The tenants are represented in the Board of Directors (which is
the highest policy making body of the Scheme) by five members. The tenants are
supposed to be full participants in the decision making process. However, because of the
important role the Gezira Scheme plays in the country, directives have tended to come

from the top to the tenant without a feedback.

44

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FIGURE 4.4 ORGANIZATION OF HAWASHAS IN A 90 FEDDAN NUMBER.
NUMBER 1 NUMBER 2 NUMBER 3 NUMBER 4
A1 A2 A3 A4

Bl B2 B3 B4

C1 C2 C3 C4

D1 D2 D3 D4

E1 E2 E3 E4

F1 F2 F3 F4

G1 GZ G3 G4

H1 H2 H3 H4

11 12 I3 14

A1 + A2 + A3 + A4 = 20 Feddan Gezira Tenancy = 4 Hawashas.

Source: Field Survey, 1989/90.

 

 

 

4.3 CLIMATE AND SOILS

The vertisol soils of the Gezira plain crack widely, are fairly uniform, have a clay
content of 60 percent and a high cation exchange capacity. Water movement in the soil is
very slow. The soil moisture content remains constant at a depth of a few meters with no
downward percolation of irrigation water. However, water penetrates to a good depth on
the cracks to be followed by plant roots. The cotton soils show a high tendency to
waterlogging with the attendant bad aeration and yield reduction.

The climate is arid characterized by low annual precipitation and considerable
yearly fluctuations in magnitude, intensity and distribution of rainfall. There are three
distinct seasons: a short rainy season from July to September, during which the

temperature is moderate and humidity high; a cool dry winter season from November to

45

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TABLE 4.1 METEOROLOGICAL DATA FOR WAD MEDANI. 1941-75.
PERIOD RAINFALL TEMPER HUMIDITY WIND sp EVAPOR
UNIT (mm) (Cent) (%) (m/s) Penman
JAN 23.7 18.0 3.6 177
FEB 25.1 13.0 4.0 189
MAR 28.3 10.0 3.6 247
APR 3 31.0 9.0 4.5 256
MAY 13 32.7 15.0 4.5 280
JUN 27 32.1 23.0 4.5 282
JUL 94 29.0 39.0 4.5 244
AUG 96 29.3 51.0 4.0 206
SEP 57 28.5 42.0 3.1 206
ocr 8 29.7 27.0 2.2 ' 204
NOV 1 27.2 19.0 3.1 180
DEC 24.1 19.0 4.0 171
ANNUA 299 28.3 24.0 3.6 2,632

 

 

 

 

 

 

 

 

 

 

 

February; and a hot summer from April to June.

The mean annual rainfall ranges from 160 mm near Khartoum to 470 mm at the
headwork of Sennar dam, and is distributed over three months from July to September.
The relative humidity fluctuates from 20 percent to 70 percent and temperature varies
from 5° C in December to over 450 C in April, with an annual mean of 28° C. The
evaporation EO (Penman) at Wad Medani varies from 5.5 mm per day in December to
9 mm per day in June. Salinity is not a problem except for the fringe areas at the

northern part of the Scheme south of Khartoum.

46
4.4 LAND TENURE

At the inception of the Gezira Scheme, the original landowners were compelled
to lease their land to the government at the nominal rate of one Sudanese pound per
annum for fifty'years. They were given the right to become tenants on their own land up
to a limit of one tenancy of 40 feddans and they could nominate tenants to their
property exceeding this amount. The remaining land was allotted to landless peasants
(Gezira Land Ordinance, 1927). The land required for permanent works such as
irrigation canals and building structures was bought outright by the government from the
owners.

Tenancies were allotted to both male and female adults but male relatives were
appointed as responsible tenants on behalf of the females. Minors were also allotted
tenancies but adult uncles have to work the farm until they come of age. The original
distribution of land was as follows: the original land holders 40 percent, tenants
nominated by the original landowners 14 percent and others 46 percent (Gaitskell, 1959).
The allotment of land to the original landowners and their relations, those who were
paying taxes on rainfed crops and laborers in the area preserved some property rights.

The tenancy is allocated on individual basis and is automatically renewable
annually. Tenant evictions have been about one percent per annum (Socioeconomic Unit,
1988). The standard tenancy of 40 feddans was thought to provide adequate living for a
family that would cultivate sorghum for its subsistence requirements and cotton as a cash
cr0p. Labor was supposed to be provided by the tenant’s family. However, family labor
participation in the Gezira is only 31 percent (Brandt et al., 1987).

Culwick (1955) found that the standard tenancies of 40 feddans were only 35

percent, half tenancies of 20 feddans had increased to 62 percent and 60-80 feddan

47

tenancies were 3 percent of all tenancies in the Gezira. The significant increase in the
number of half tenancies can be attributed to inheritance law that entitles an heir to
receive a piece of land. A 20 feddan tenancy is the minimum parcel allowed by the
Sudan Gezira Board.

In the Managil extension, tenancy size is only 15 feddans, deemed an optimum
size for a tenant and his family to work without hired labor. The small holdings were to
accommodate more tenants.

The Gezira Scheme has 102,250 tenancies: 48,350 in the main Gezira and 53,900
in the Managil extension with an average tenancy size of 20 feddans in the main Gezira

and 15 feddans in Managil extension.

4.5 CROPPING PATTERN
4.5-1 W

The main crops gown in the Gezira include cotton, wheat, goundnuts and
sorghum. Cotton and wheat are the "government" crops while goundnuts and sorghum
are the "tenant’s” crops. In the typical four course rotation, three numbers are planted
and one is left under fallow. Cotton is gown in the first number, wheat in the second,
goundnuts and/or sorghum in the third and the fourth is left fallow. Each tenant’s 20
feddans are split across four numbers with each ”hawasha” occupying a fixed site on the
number.

The rotation system is imposed on the tenants by the Sudan Gezira Board. It
only takes into consideration technical rather than economic factors. Yet the tenants are
expected to influence crop yields. The only decision left to the tenants is whether to gow

goundnuts or sorghum in the third "hawasha". Some of the tenants gow vegetables

48

mainly tomatoes, onions, eggplants and cucumbers on fields adjacent to the main
irrigation canals. This is offered as an incentive only to good cotton producers. Some
tenants keep livestock for the production of milk for home consumption. I

In the Managil extension, a three course rotation has been in practice until the
1985 / 86 cropping season. A gadual change to a four course rotation has been completed
by the 1986/87 cropping season. The cropping intensity has decreased from the planned
100 percent to 75 percent with the area under fallow increasing from zero to 25 percent.
The introduction of fallow is intended to: 1) reduce noxious weeds; 2) give enough time
for land preparation; 3) reduce demand for limited water supply; and 4) provide gazing
for livestock.

Table 4.2 shows the crop rotation in the main Gezira has undergone many
changes based on policy and economic considerations. The initial three course rotation
(1925-1933) was changed to a eight course rotation (1934-1961), to a seven course rotation
(1962-1975), to the present four course rotation. In the 1960’s wheat and goundnuts were
introduced into the Gezira Scheme. The most intensive crop rotation started in the
1974/75 to take advantage of the abundant fallow land in the proceeding eight course
rotation. However, this intensification took place without changes in the canal capacity
such that the subsequent shortage of irrigation water has hindered the achievement of
high crop productivity.

4-5-2 W

Figure 4.5 shows the cropping calendar in the Gezira. The gowing season starts
in May with the clearance of cotton stalks, ridging of goundnuts and sorghum plots.
Groundnuts are sown the second week of June and sorghum the fourth week of June.

Sowing of medium-staple cotton from July 15 to July 31 and long-staple cotton from July

 
    

TABLE 4.2 DEVELOPMENT OF CROP ROTATION IN THE GEZIRA.

 

 

 

 

 

 

SEASON ROTATION CROP INTENSITY %
1925 - 1930 C-S/L-F 66.30
1931 . 1932 C-F-F 33.30
1933 - 1960 C-F-F-C-F-S-L/F-F 44.75
1961 - 1974 C-W-F-C-G-L/F-F 69.75
1975 - 1991 C-W-G/S-F 75.00

 

 

 

Key: C = Cotton W = Wheat G = Groundnuts
S = Sorghum F = Fallow L = Legume

 

 

Source: Sudan Gezira Board records.

 

 

I

 

20 to August 15. Irrigation takes place throughout the season. Weeding of sorghum and
goundnuts takes place in August and harvesting occurs in November. Fertilizer
application and spraying of cotton in September. Land preparation for wheat takes place
at the end of September and sowing in October. Groundnuts harvesting starts on
November 15, and Continues until December 31; medium-staple cotton from December to
March, long-staple cotton from January to April and wheat in March. The tenants gow

the cotton, goundnuts and sorghum in the summer and wheat in the winter.

4.6 PRODUCTION RELATIONS

Under the 1913 ageement, the Gezira Scheme established a joint account system
on cotton production between the government, Syndicate and the tenants. Groundnuts,
sorghum and vegetables belong to the tenants. Production costs of cotton and other
crops were deducted from the goss revenue of cotton and the net revenue of cotton was

distributed as follows: government 35 percent, Syndicate 25 percent and tenant 40 percent

50

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

=====
FIGU E 4.= 052 RA CROPPINC CAL NDARS
GP 0011 .101 AUG SEP ocr N01! 050 JAIL FEB MAR APR MAY
COTTON
P xx
3 xx
1 xx xxx xxx xxx xxx xxx xxx xxx
_IL xx XL
H xxx xxx xxx
0 xx xx
_uHE T
P xx
5 xx
1 xx xxx xxx xxx xxx
_L
xxx
1: xx
33011110111175.
P xx
5 xx xx
1 xx xxx xxx xx
_u_ xx xxx xx
11 xx xx
1: xx
WM
P xx
3 xx
1 xx xxx xxx
_iL xx xxx
H xx xxx
0 xx xx

 

 

 

 

 

_L=_§J.e.aning_c_anal3 S = SowinLI = 11‘er
C = We

=(312311005

 

I

 

51

 

 

 

 

 

 

 

 

 

 

 

TABLE 4.3 RESEARCH RECOMMENDED SOHING AND HARVESTING DATES.
CROP \ DATES SOHING DATES HARVESTING DATES
Cotton MS July 20, - August 8 March 31

Cotton LS . July 15, - July 31 March 31

Wheat Oct 15, - Nov 15 February 28
Groundnuts June 1,,- June 15 October 20
Sorghum June 15, - July 15 October

Source: Agricultural Research Corporation.

 

 

Table 4.4 shows the distribution of the revenue from cotton among the three partners
did not change until the 1950 cropping season. By the 1957 season, the local government,
social development fund and tenant reserve fund were receiving 2 percent of the cotton
revenue each. The changes in the share distribution continued until the 1981 season
where the shares stood at: government 36 percent, Board 10 percent and tenant 47
percent. The reasons given for the triple partnership arrangement that involve close
supervision include; 1) efficient control of water utilization, 2) maintenance of soil
fertility by following strict rotation; 3) efficient utilization of machines in large adjacent
land parcels; and 4) application of pesticide and herbicide sprays of cotton from the air.
The joint account began to face many difficulties over the years because as the
costs of production were rising, the Board was charging more and more inputs on the
joint account. Moreover, the average costs were charged across the board and the
efficient tenants received no reward for better management. The Board deducts the cost
of providing services for the production of cotton, wheat, goundnuts and sorghum from

cotton proceeds: Because goundnuts and sorghum are privately marketed and the input

52

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TABLE 4.4 PERCENTAGE DISTRIBUTION OF NET REVENUES.

PERIOD \ SHARE GOVT SGB TENANT LOCAL DEV RES
BEGIN END GOVT FUND FUND
1925/26 1949/50 35 25 40

1950/51 1955/56 40 20 40

1956/57 1962/63 42 10 42 2 2 2

1963/64 1964/65 40 10 44 2 2 2

1965/66 1968/69 36 10 48 2 2 2

1969/70 1980/81 36 10 47 2 3 2

Source: Sudan Gezira Board. I

 

 

costs cannot be recovered at sale, cotton became less attractive to the tenants since it has
to bear the burden of the land and water charges of goundnuts and sorghum. The Sudan
Cotton Company could not sell all the cotton due to the presence of honey dew in the
lint and low world demand for long staple cotton.

These problems led the tenants to neglect their duties and by 1980/ 81 the yield of
all crops had declined drastically; cotton from 3.6 Kantars per feddan in 1974 to 2.2
Kantars per feddan, wheat 455.2 Kg per feddan to 297.5 Kg per feddan, goundnuts 335.2
Kg per feddan to 227.9 Kg per feddan and sorghum from 425.4 Kg per feddan to 281.4
Kg per feddan. An individual account system was introduced in the 1980/81 cropping
season in an attempt to arrest the decline. The Board deducts the costs of providing
services from the tenant’s individual account. The tenant keeps the net revenue from the

sale of cotton and wheat but has to pay land and water taxes for each of the four crops

he gows.

53

The Gezira rehabilitation project brought about some improvements in cr0p
yields that peaked by the 1988/89 cropping season: cotton 4.5 Kantars per feddan, wheat
628 Kg per feddan, goundnuts 361 Kg per feddan and sorghum 333 Kg per feddan.
Cotton returns have improved because all costs are no longer debited to the cotton
account and high-yield tenants reap benefits.

The land and water taxes are uniform across the board regardless of tenant
access to water and land inputs which means that low yielding tenancies are penalized as

compared to high yielding tenancies.

4.7 AGRICULTURE PRODUCTION

The yields of the four main crops hit rock bottom in the 1980/ 81 season but by
1988/89 they attained the previous levels. The decline can be attributed to decreasing
soil fertility, machinery shortage that leads to delayed and inadequate timing of
agicultural operations and lack of incentives to motivate tenants.

The change of the rotation in the Managil extension from a three course to a
four course rotation has resulted in 1) reduction of potential cropping intensity from 86
percent to 75 percent; 2) the area under fallow increased from 236,000 feddans to
530,000 feddans per annum; 3) reduction of the total area available for crops to 1.59
million feddans; and 4) the area available for cereal production decreased to 530,000
feddans. The actual cropping intensity declined from 75 percent in the 1978/79 season to
60 percent in the 1988/ 89 season. The gap between the potential and actual cultivated
crop areas has decreased indicating a positive impact of the rehabilitation progam.
Yields have tended to decrease from South to North except for wheat which gives high

yields at the northern part of the Gezira. Water availability and climatic factors may

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1983/84 1984/85 1985/86 1986/87 1987/88 1988/89

Area 498 465 401 415 383 405

Output 2,454 2,427 1,419 2,048 1,752 210

Yield 4.93 5.22 3.45 4.93 4.57 5.20
._MAI

Area 266 244 180 252 274

Output 103,099 -.. 97,387 95,908 119,568 1,475

Yield 0.39 0.40 0.44 0.47 0.56

W

Area 137 213 102 152 159 11

Output 92 109 56 91 96 67

Yield 0.67 0.51 0.55 0.60 0.60 0.60

SQBQHIIM

Area 411 420 579 448 390 427

Output 216 147 318 179 141 215

Yield 0.53 0.35 0.55 0.40 0.36 0.50

Area: '000’ Feddans. Output: '000’ Mt. Yield: Kg/Fed.

" Output: ’000’ Kantars. Yield: Kantars/Fed.

 

 

 

 

explain the difference. Also, the distance of the hawasha from the field-outlet could
have some marked effect on yield, which tends to decline towards the tail end of the
irrigation system. This can be explained by the differences in the availability of the
irrigation water which influences the timeliness of water delivery as well as its adequacy

(Faki et al., 1984).

55
4.7.1 INELJ I SUPPLY

The Board determines the area, varieties and timing of all field operations and
supplies most of the material inputs (seeds, fertilizers, pesticides) as well as undertaking
all the mechanical services such as land preparation, seed propagation, fertilizer
application, transport, storage, ginning and gading of cotton. The tenants perform
sowing, weeding, irrigation, harvesting, clearing and transportation. The Board advances
cash for land preparation, canal opening, ridging, picking and stalk pulling labor.

The Board also participates in wheat production by providing the material inputs,
mechanical services and the tenant’s role is confined to land preparation, weeding and
irrigation. The tenant has to provide all the material inputs, mechanical services and
labor inputs for goundnuts and sorghum but must observe .the general rules of
cultivation. The Board does not make fertilizers and pesticides available for goundnuts
and local sorghum.

There are several committees that decide on production inputs. The Ministry of
Finance considers requests for inputs only on a quarterly basis, and the Bank of Sudan
releases foreign currency for a new reqUest only after a full account is given of the
utilization of supplies secured in the previous quarter. Release of funds for inputs tends
to be tied to the success of fund-raising efforts with donors. Thus, top management of
the Gezira Scheme spends much time in Khartoum on the follow-up of these funds
instead of managing the Scheme in order to improve production efficiency. Critical
inputs like sacks often arrive late leading to significant losses in output.

4-72 W
Material production inputs for cotton and wheat are provided by Scheme

management and their costs are charged to the individual account. Inputs for goundnuts

56

 

w
ll TABLE 4.6 HATER RATES BASED ON ACTUAL CULTIVATED AREAS,l988.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

P CROP \ AREA CULTIVATED COMPUTED RECOVERABLE AMOUNT RATES
UNIT (Fed) (LS/Fed) (LS) (%) (S/Ha)
Cotton 384,000 46.07 17,690,850 49.60 27.61
Wheat 300,000 28.80 8,639,000 24.30 17.26
Groundnuts 159,000 23.04 3,662,330 10.30 13.81
Sorghum 397,000 11.52 4,572,415 12.80 6.90
Vegetables 27,000 40.32 1,085,640 3.00 24.17

Source:?18§:

 

and sorghum are obtained privately at the prices ruling in the market.

Table 4.7 shows that production costs of all the crops have increased considerably
over the years. Cotton from LS 108 per feddan in 1980/81 to L8 2,404 per feddan in '
1989/90, wheat from LS 41 per feddan to L8 857 per feddan, goundnuts from L8 47 per
feddan to IS 832 per feddan and sorghum from L8 24 per feddan to L8 689 per feddan.
Soaring prices of agiculture inputs, high doses of insecticide application and rising wages
of hired labor have contributed to the rising costs of production.

The tenants are charged for each input for each crop and they get the net
revenue based on their productivity. Table 4.8 shows the land and water rates for all the
crops. These rates are established to recover administrative and operating costs of the
Board, and the Ministry of Irrigation; and their capital replacement and new investment
costs. The rates established in 1981 / 82 are increased by a certain percentage for each
crop annually.

Table 4.9 reveals that land and water charges collection rate is 70 percent in

1985/86, 81 percent in 1986/87 and 75 percent in 1987/ 88. Cotton has the highest collection

57

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TABLE 4.7 COST OF PRODUCTION PER FEDDAN, 1981-1990. ll
PERIOD CROP COTTON WHEAT GROUNDNUTS SORGHUM II
1980/81 107.9 40.8 46.9 24.4
1981/82 233.9 93.4 73.8 44.9
1982/83 293.9 124.3 90.5 56.0
1983/84 426.2 140.8 135.1 96.9
1984/ 85 443.6 ---- 132.8 102.3
1985/86 777.6 273.2 201.0 159.7
1986/ 87 834.9 275.8 262.7 158.7
1987/88 1,035.9 320.9 379.5 208.0
1988/89 1,580.7 558.7 480.9 367.7
1989/9O "' 2,404.0 857.0 832.0 689.0
‘ 1989/90 cropping season covered by the field survey.
Source: Socioeconomic Unit, Sudan Gezira Board.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

I YEAR / CROP COTTON WHEAT GROUNDNUTS SORGHUM VEGETABLES

I 1981/82 28.50 14.00 18.00 3.50 25.00

‘1982/83 28.50 14.00 18.00 7.00 25.00
1983/84 38.00 23.75 19.00 19.00 33.50
1984/85 50.50 31.00 25.00 25.00 I 44.00
1985/86 65.00 40.00 32.50 32.50 57.00

I 1986/87 80.00 49.00 40.00 40.00 70.00

I 1987/88 101.00 62.00 50.00 50.00 90.00,

|1988l89 130.00 95.00 55.00 55.00 130.00
1989/90 * 157.00 131.00 104.00 104 175.00

 

 

 

 

 

 

H Source: Socioeconomic Unit, Sudan Gezira Board.

 

58

rate (90 percent) followed by wheat (80 percent) and; goundnuts, sorghum and
vegetables 49-68 percent. The higher collection rates for cotton and wheat are because
the Board has control over the sale of these crops whereas goundnuts and sorghum are

marketed privately.

4.8 WATER RESOURCES
4.8.1 DISTRIBUTION SYSTEM

The Gezira Scheme consumes 7.6 billion cubic meters out of the 16 billion cubic
meters of water allocated to all the existing Schemes. The capacity of the reservoir at the
Sennar dam is 930 million cubic meters. Table 4.10 shows water distribution network in
the Gezira. There are two main canals (main Gezira and Managil) from the dam, each

supplies water to about half the Gezira Scheme. These canals feed 11 branch canals. The

branch canals feed 1,498 minor canals. From the minor canals, the water flows through

 

 

 

 

 

 

 

 

 

 

 

 

 

1985/86 1986/87 1987/88
Ministry of Irrigation 28,670 ' 32,909 35,650
Sudan Gezira Board 40,963 - 52,476 - 21,909
Total 69,633 85,383 107,559
Recovery 60,214 68,525 85,497
Average Recovery Rate % 86.5 80.2 79.5
Cotton recovery Rate % 88.0 93.00 90.0
Wheat recovery Rate % 74.0 25.0 80.0
Others recovery Rate % 49.0 68.3 54.1

 

 

 

 

59
field outlet pipes (FOP) into tertiary canals called "ABU XX" (14,369 in main Gezira and

12,626 in Managil). The "ABU XX" supply water to plots of 90 feddans which are divided
into 18 five feddan plots called ”hawashas”. The hawasha receive water through small field
canals called "ABU VI" which are further divided into "gadwals" that alternate with
"tagnats" (earth banks) that divide the tenancy into units called "angayas," of which there
are 7 of them in each ”hawasha”. The "angayas" are further divided into small basins
called ”hods".

Water management is divided between the government, the Board and tenants.
Ministry of Irrigation delivers the water up to the minor canals, Sudan Gezira Board
provides the field level management and the tenants water their ”hawashas". The Gezira
is divided into 6 divisions that are further sub-divided into sub- divisions. The block
inspector passes the water indents (orders) to the assistant engineers (AB) on weekly
basis and the AE sums up the required discharge at each control point on the system in
his subdivision. The indents are passed to the division engineer who makes corrections
for water conveyance losses and passes the total to the chief engineer of the headwork at
Sennar dam and the chief engineer adjusts the gates to give the discharge required.
Water flow from the major to the minor canals is controlled by movable weirs, which
provide water measurements.

The Ministry of Irrigation estimates the distribution efficiency at 93 percent. The
high level could be due to: l) impermeable clay soils; 2) low level of escapage and; 3) the
storage role of the minor canals, Field efficiency (defined as the ratio of net crop
requirements to releases at field outlet level) has been estimated at 70 percent. Water
distribution has two dimensions: 1) a technical dimension that relates to the

appropriateness of water distribution methods and their capacity to secure an optimum

6O

 

 

 

 

 

 

TABLE 4.10 WATER DISTRIBUTION NETWORK IN THE GEZIRA SCHEME.

CANAL \ LENGTI-I \ CAPACITY LENGTH CAPACITY
(Km) (meters cube/s)

2 Main canals 261 354

11 Branch canals 651 25-120

1,498 Minor canals 107 1.5-15

29,00 Water courses ’Abu xx’ 8,119 05-15

350,00 Field channels ’Abu VI’ 40,000 0.12

 

 

 

 

 

 

 

match between supply and demand; and 2) a social/political dimension that concerns the
capacity and the ability of officials to ration water equitably and resist powerful pressures
to misallocate.

4-8-2 W

The main Gezira canal conveys 15 million cubic meters and the Managil Canal 16
million cubic meters which corresponds to a monthly amount of 930 million cubic meters
and 420 cubic meters per feddan respectively, taking into account transit losses.
However, the actual amount released from the dam depends on the amount of water
stored in the Sennar reservoir which is influenced by the flow of the Blue Nile.

The traditional method of determining crop water requirements estimates the
requirement at 30 cubic meters per feddan per day exclusive of transit losses which
corresponds to the traditional Gezira schedule of 420 cubic meters per feddan at
fourteen day watering interval irrespective of the crop or season.

Research conducted since 1964 at Gezira Research Station has determined the

values of crop water requirements according to the Penman method which meets the need

61

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

_—
TABLE 4.11 MONTHLY WATER RELEASES FROM SENNAR DAM. "‘
MONTH \ YEAR 1984 1985 1986 1987 1988 ‘MEAN
June 623.3 668.0 183.5 202.6 199.6 375.4
July 731.2 910.1 589.4 521.2 609.4 672.3
August 810.5 919 767.7 691.3 509.9 739.8
September 973.5 949.1 571 544.0 685.5 744.6
October 910.1 566.2 756.7 890.2 865.1 ' 797.7
November 755.4 471.2 858.2 748.0 880.6 742.7
December 642.2 641.8 701.9 582.6 924.4 698.6
January 544.2 529.5 515.0 508.2 562.6 531.9
February 377.2 337.7 461.0 392.9 511.2 416.0
March 79.1 85.9 381.3 187.0 309.5 208.6
April 62.3 1 14.3 86.2 44.1 58.5 73.1
May 302.5 299.7 85.0 71.0 98.0 251.2
Total n S 6313.5 6448.0 6156.9 5383.1 6216.3 6103.6
Demand = D 6061.0 5757.0 5308.0 5415.0 5372.0 5582.6
Ratio S/D 1.04 1.12 1.16 0.99 1.16 1.09
" (Million Cubic Meters). S = Supply D = Demand
Source: Ministry of Irrigation.

 

 

   

of irrigated agiculture under the soil and climatic conditions of the Gezira plain.
Farbrother (1977) determined the cropping factors for all the crops at the field outlet
pipe level taking into account rainfall and transit losses. The definition of the crop water
requirements at the Gezira are based on water losses below the field outlet pipe level
because percolation water losses are very small. Nevertheless losses through evaporation,

seepage, cracks and flooding of fallow numbers can be considerable. The water demand in

62

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TABLE 4-12 CROPLHATER EQUIREMENT FACTORS BY P NMAN,MEIHO -
PERIOD COTTON MS COTTON LS WHEAT PEANUT SORGHUM
JUN 1 800 *

, JUN 2 0.50
JUN 3 0.53
JUL 1 0.59 800 *
JUL 2 0.68 0.50
JUL 3 600 * 600 * 0.78 0.55
AUG 1 0.50 0.50 1.91 0.70
AUG 2 0.50 0.50 1.01 0.94
AUG 3 0.53 0.57 1.09 1.10

_SgP 1 0.58 0.67 1.10 1.14
SEP 2 0.65 0.85 1.07 1.08
SEP 3 0.81 0.99 1.03 0.93
OCT 1 1.01 1.20 0.89 0.80

_091_g 1.10 1.20 0.80 0.70
OCT 3 1.13 1.21 400 *

Nov 1 1.17 1.21 0.5
NOV,2 1.;0 1.11 0.66
Nov 3 1.18 0.92 0.87

_ng 1 1.16 0.75 1.07

_p§g_gi 1.15 0.68 1.15

_pgcs 1.11 1.18
JAN 1 1.00 1.11

_gAN_g 0.95 0.95
JAN 3 0.86 0.76

_figs 1 0.77 0.60

_§g§_g 0.68 0.50
FEB 3 0.68

 

* Pre-Irriqation in millimeters (mm)

 

 

=§QU££§E==§§£DEQLQ§’- 1977-

 

63

the period 1983-88 varies between 5.3 cubic meter per million and 6.1 cubic meters
million (Plusquellec, 1990).

The original night storage system has given rise to a continuous twenty-four hour
irrigation water delivery to the field known as the "grid system" which is not supervised
by the tenants during the night. By adopting the continuous unattended irrigation, the
tenants have considerably reduced labor costs for irrigation. They also appreciate the
flexibility of the new system on which water is withdrawn on demand since they assume
control of the opening of the field outlets. The departure from the originally planned
method of watering has given rise to some management and water application problems.
The new system results in loss of water, over watering and uneven watering with tenants
at the tail end of the minor canal receiving less water than those at the head end. The
water application problems have been aggavated by lack of funds, intensification of the
cropping system, expansion of the system and poor management.

The poor performance of the export sector results in insufficient funds to finance
the Scheme’s recurrent operations and maintenance costs, and the replacement of
machinery and equipment. The increase of the cropping intensity from 40 percent in 1964
to the present 60 percent combined with the increase in the area under irrigation
resulted in a three-fold increase of water released through the irrigation system, and of
the silt deposited into the canal system.

Water shortages are prevalent during the peak period from October to November
when cotton, goundnuts and sorghum are maturing and wheat is being planted; and all
the crops needing water. The outcome is the delay in irrigating some crops and less

water per feddan per watering which has a negative effect on crop productivity.

64

Ahmed et al. (1988) maintain that improvements in water measurements, crop
water requirement estimates, management control of irrigation water, removal of
sediments and weeds could increase the supply of irrigation water by 2 million cubic
meters. The seasonal variation of the Nile discharge ranges from over 10,000 cubic meter
per second at the peak of the flood to 60 cubic meters per second in a very low year.
The annual suspended solids of the Blue Nile is about 60 million tons. Silt content is
high: 10 kg per cubic meters (Plusquellec, 1990).

Silt deposits and weed gowth in the irrigation canals have become very serious
problems in the Gezira, and the problem is getting worse every year. Cropping intensity
is down from planned 75 percent to 62 percent, as nearly 300,000 feddans have to be
taken out of production because silt and weeds in the canals have reduced the
availability of water. The annual rate of silt deposits is estimated at 16.7 million cubic
meters against the Earth Moving Corporations’ removal capacity of 10.2 million cubic
meters. Hence, each year another 6.5 million cubic meters are added to the back-log of
46.7 million cubic meters. The reduction in the cultivable area has resulted in stagnation
of production in the irrigated subsector (World Bank, 19908).

The dual management of the minor canals by the Board and Ministry of
Irrigation, and the bureaucratic squabbles between these two arms of government have
adversely affected the delivery of water to the tenants. There is a wide variability in the
availability of water as well as the timing of other production operations leading to
variability in crop yields with implications for cost recovery, production and exports.
Improvement will include raising the Roseires dam to better control the flow of the Blue

Nile; and replacement of pumps. Responsibility for the management of the minor canals

65

should be given to the Board with engineers from the Ministry of Irrigation on

secondment to provide technical help (Plusquellec, 1990).

4.9 LABOR INPUT

The tenancy ageement stipulates that the provision of labor for all the field
operations is the responsibility of the tenant. However, the Scheme management
participates in the recruitment and financing of hired labor for land preparation, and
picking and pulling of cotton stalks. The material inputs for wheat are supplied by the
Board. The tenant’s role is confined to land preparation, weeding and irrigation
operations. The tenants have to provide all the labor for goundnuts and sorghum
production with the Scheme only collecting the land and water taxes.

The size of the Gezira tenancy was thought to be big enough to provide a family
with enough food and cash requirements and the household members were to provide
most of the labor but the participation rate of family labor is very low. This could be due
to low farm incomes and prospects of off-farm employment for the young males who
tend to migate out of their villages. Cultural and social values restrict the women of the
family to housework.

Hired labor performs the bulk of the work in the Gezira Scheme. There are two
sources of hired labor: labor settlements outside the tenant villages and seasonal laborers
from outside the Scheme. The settlements are constituted by migants from Kordofan,
Darfur and west Africa who amount to about 15 percent of the Gezira Scheme
population. The seasonal laborers are mainly peasants from the traditional subsector in
western Sudan who wish to supplement their income to meet their basic subsistence. The

number of available casual labor depends on the adequacy of rains in western Sudan.

66

Less labor migates to the Gezira during the seasons with sufficient rainfall. The labor
demand for the different crops appears to depend on the season and the degee of
mechanization. The peak demand for labor is in November to December during cotton
weeding and, goundnuts and sorghum harvesting. Cotton picking and wheat harvesting
all require labor input. Wheat cultivation is mechanized except for land preparation,
weeding and irrigation operations.

Both the Board and the Tenants’ Union participate in the recruitment of seasonal
labor in Western Sudan for Cotton picking. Wage rates are lower for the seasonal than
for settled labor. The latter can enter into crop sharing relations with the tenants for the
production of goundnuts and sorghum. However the standard of public health and
drinking water facilities at the labor camps is very poor where bilharzia, malaria and
diarrheal diseases predominate. Also, the illiteracy rate is very high.

In order to meet the labor requirements, the tenants are showing an increasing
tendency towards share-cropping for goundnuts and sorghum. Sharecropping is
forbidden under the tenancy ageement but the Scheme appears to show tolerance. The
typical arrangement is for the tenant to pay the land and water taxes and provide seeds.
The sharecropper has to provide all the labor and the goss proceeds have to be shared
equally between the two parties. Vegetables assume a different kind of Sharecropping
where the tenant sublets the land to the sharecropper who finances all the costs of
production and pays a fee for the use of the land. This is because vegetables require

high capital to finance the costs of production.

4.10 PRODUCTION CREDIT

The Board finances cotton and wheat but no formal credit is available for

67

 

-_ E

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TABLE 4.13 COTTON PICKING LABOR, 1979-1989.

TYPE TENANT LOCAL IMPORT FLOAT TOTAL TOTAL
SEASON FAMILY LABOR LABOR LABOR* SUPPLY DEMAND
1978/79 132,703 69,116 252,877 7,877 462,578 460,296
1979180 138,316 75,829 217,138 5,460 436,743 460,596
1980[81 131,627 77,473 186,018 5,161 400,279 410,513
1981/82 124,978 77,399 161,761 3,518 367,656 394,202
1982/83 145,719 86,380 203,659 3,209 438,967 466,185
1983/84 141,940 90,850 231,933 5,697 470,420 493,054
1984/85 141,505 94,078 214,862 1,3640 464,085 470,830
1985/86 132,421 87,584 173,024 11,505 404,534 402,790
1986/87 127,284 99,326 163,358 8,495 394,463 406,953
1987/88 124,399 89,874 144,526 7,517 366,316 383,015
1988/89 139,182 101,262 128,133 9,602 378,179 415,292
* Labor moving around in search Of work in the peak periods.

Source: Socioeconomic Unit, Sudan Gezira Board.

 

 

 

goundnuts and sorghum production. The credit available for cotton and wheat
production is for field operations. Most of the credit advances to the tenants is in-kind
and the formal credit is inadequate.

The tenant has to rely on his own financial sources or the private sector to
finance the cultivation of goundnuts and sorghum. Tenants need funds for the farm
operations and family obligations - food bill, ceremonies and weddings. The informal
sources of private credit include private moneylenders, "shail system" (a form of crop

mortgage where a local merchant advances loans to the farmer who pledges to deliver to

68

him a specified amount of produce at harvest time), and off-farm employment. Informal
credit accounts for about 60 percent of the total credit in the Gezira Scheme (Ahmed,
1979).

It is an obligation for family members to help the needy by offering cash in cases
of illness, funerals and weddings. Loans given for the purchase of expensive consumer
goods are usually on reciprocal basis with no interest payments. Tenants also borrow
goods as well as cash from local shopkeepers.

Experiences with cooperatives in the early 1970s have been a failure because of
dominance by local leaders, inadequate services and high administrative costs. The
solution to this problem may involve changes in the Boards financing procedures on

alternative credit sources (Brandt et al., 1987).

4.11 AGRICULTURAL RESEARCH

The Gezira Research Station founded in 1918 is responsible for the conduct of
research in the Gezira Scheme. The Board has a small extension department which
handles advisory services, demonstration plots and the preparation of literature for the
tenants. The link between research and extension is very weak. Lack of appropriate
technology suitable for the Gezira environment has impeded increases in agiculture
productivity. Research is needed to improve the varieties of wheat, goundnuts and
sorghum (World Bank, 1985).

Cotton research deals with breeding and the maintenance of the germaplasm
material. The major challenges facing the cotton researchers include fusaria wilt,
bacterial blight and whitefly infestation. Sudanese cotton sells at a discount of 10 cents

per pound in the world market due to the presence of honeydew secreted by the cotton

69

white fly which causes stickiness of the lint cotton. The cotton research problems that
need to be addressed include: soil nutrients, water requirements and weed and insect
control. Improved technical packages for wheat are being tested to assess their suitability
to the Gezira conditions. The main problems facing wheat production in the Gezira are:
cultural practices, suitable varieties, harvesting, insects and diseases.

Groundnuts varieties are under trial but the research time allocated to it is
inadequate. Research problems of goundnuts include: cultural practices, weeds, pests
and diseases and aflatoxin contamination.

Hybrid sorghum variety known as Hageen dura-I, was released and approved for
commercial production in 1983. Hageen Dura-l given the proper input combination, out-
yields the local sorghum varieties by a factor of 6:1. However, the adoption rate of this
technology has been very low. Farmers complain that the variety is not palatable, and
food processors found that the seed breaks up during decortication even though it mixes
very well to produce wheat/sorghum bread. Breeders will need to incorporate the lacking
factors for it to succeed. The main problems facing sorghum production include: mixed
varieties, poor cultural practices, weed control, m infestation, pests and diseases.

The transfer of information and technology from the Gezira Research Station to
the Agicultural Corporations is through the national committees dealing with crop
husbandry, pests and diseases, cotton variety, and production and release. The
information is received through meetings and reports and is conveyed to the tenants
through the Board’s inspectorate. system. The information service is not capable of
presenting the latest results from research work to the intended clients adequately.
Agricultural Research Corporation annual reports are years behind schedule and

technical reports are never published such that an improvement could only come about

70

with the strengthening of the information unit of the Agicultural Research Corporation
and its linkages to extension.

Research and extension need to identify periods in which scarce water supplies
exceed demand, and to devise cropping patterns that reduce underutilization of irrigation
water to a minimum. The extension service lacks material, and both technical and
communication skills. The low morale, low investment, and low pay leads to low
performance. There is a need for resources, clear messages and a good progam

management system if the extension services is to enhance productivity and promote

equity.

4.12 PRODUCE MARKETING

The whole of the cotton crop is delivered to the Board, where it is marketed by
the Sudan Cotton Company (SCC), a parastatal company. Cotton prices are announced
just before harvest, returns are to be paid out soon after harvest to effect cotton
production but delays in payment are very common. The cotton price committee sets the
prices according to variety, weight and gade. Tenants deliver the seed cotton to the
collection centers then the Board transports it to the ginnery where a minimum of 1,500
sacks are required for an introduction into the ginnery. The Board operates 13 ginneries
with a total production capacity of 900 tons of lint. Losses in the collection centers and
ginnery compounds are very high.

The Sudan cotton company allocates 10 percent of the lint to the local textile mills
that operate at 30 percent capacity because of shortages in power, spare parts and skilled
manpower. The rest of the lint is transported to Port Sudan for export. The market has

shifted from long to medium-staple cotton. There have been losses in the traditional

71

markets due to the problems of honey dew, and India and China have emerged from
being net importers to net exporters of long-staple cotton.

Wheat is delivered to the Board against prices set by the Government. The
tenant is only allowed to keep three sacks for every five feddan hawasha and is free to
sell them in the open market. The government sets the prices for the wheat delivered to
the mills and these prices are highly subsidized.

Sudan imports 80 percent of its total wheat supplies. 90 percent of wheat is
distributed through official channels and 80 percent of the imports are on concessional
terms. Wheat is available to urban consumers at low subsidized prices. Bread has
displaced sorghum bread (Kisra) as the main staple and consumption of bread has been
rising at about 7 percent a year since 1971 (World Bank, 1990a). Sudan has been unable to
afford to import the increasing amounts of wheat. Similarly, reducing the gap between
demand and supply through domestic production will be extremely difficult unless these
are radical improvements in production and management at the Gezira Scheme. Wheat
prices at the mills are set at LS 463 per metric ton. Millers supply at LS 689.14 per
metric ton at the mill. They charge LS 300 per metric ton for bran. At an extraction rate
of 80 percent, millers receive LS 110 per wheat plus revenue from bran sales. Flour is
allocated to authorized bakeries at a controlled price (of LS 689.14 per metric ton in
1988). Baking costs of L8 54 per 120 Kg sack are allowed and bread is sold at official
price and weight. The price of a 160 gm loaf has risen from LS 0.15 in 1988 to LS 0.24 in
1990 but the weight has fallen to 126 gn.

Tenants market the goundnuts and sorghum privately. The Ministry of
Agiculture sets floor prices but the actual farm prices are determined by market

conditions. Profits and margins depend predominantly on the trader’s negotiating power,

72

the size of the market and the degee of competition. Sorghum in the Gezira is for
subsistence consumption and enters the market only when there is marketable surplus or
pressing household cash needs. It is sold in small quantities through informal household
transactions. Lack of transport, storage, gading and financing limit goundnut marketing.
Tenants sell their product at harvest time. Information on the market Situation on a
timely basis is lacking, even if information on prices was available; the product cannot be

moved easily from low price to high price markets.

CHAPTER V

CHARACTERISTICS OF THE SURVEY TENANT HOUSEHOLDS

This chapter describes the household characteristics of the survey tenants. The
main discussion covers the uses of land, labor and capital, and crop enterprise budgets.
The information contained in this chapter forms the foundation of the domestic resource
cost ratio computation presented in chapter VI, and the linear programming model

presented in chapter VII.

5.1 REPRESENTATIVE FARM

Marshall (1920) defines a representative firm as "an average firm which we need
to look into in order to see how the economics of the aggegate are performing".
However, we need to exercise some caution since a representative firm might not reflect
the aggegate of firms or households. Say (1963) questions the extent to which the
component firms have to be similar in order for a single model to represent the
aggegate of the individual decision problems without much distortion.

We do experience aggegation bias because all the farms. are not exactly alike.
Ideally, a model should be constructed for every individual farm, and all the individual
models linked together to form the subsector model. However, it is not practical to
model each individual farm, so the subsector model must be based on representative
farms. The representative farm approach involves classifying the universe of farms into
smaller numbers of homogeneous goups, and constructing a model for a representative

farm from each goup. The farms should have equal access to the same production technologies.

73

74

Say (1963) in Hazell and Norton (1986) shows that in order to avoid aggegation
bias, farms gouped together have to satisfy three conditions:

1. WM - Each farm must have the same production possibilities,
resource types and constraints, level of technology, and level of managerial ability.

2. [BMW - Individual farmers in a goup hold expectations about
unit activity returns that are proportional to average expectations.

3. Institutiopgl proportionally - The constraint vector of progamming model for each
individual farm should be proportional to the constraint vector of the average farm.

We can apply less stringent conditions based on the underlying reasoning that an
optimal solution to a linear progamming problem can be stable even when many of the
coefficients are perturbed, i.e., there is a range for each coefficient over which it can be
varied without inducing a change in the optimal basis. Buckwell and Hazell (1972) suggest
gouping farms in agoclimatically similar areas and by the type of products produced to
ensure a reasonable degee of conformity to Say’s requirements of technological and
pecunious homogeneity.

Collinson (1983) has discussed three alternative techniques for deriving
representative farms. The alternative techniques are:

l. The identification of a particular farm as typical.

2. The use of an ”average farm" (derived from the means of resources, input-output
and net price coefficients of a sample of farms) as a representative farm.

3. The synthesis of a ”typothetical" or composite farm from different components of
the population.

An identification of a typical farm unit requires the consideration of a wide range

of criteria but the selection of the criteria themselves may be difficult because data may

 

75

be unavailable or difficult to collect. The use of "average farm" brings with it the problem
of aggegation bias that exists when the sum of the solutions from the individual farms in
the set does not equal the estimate obtained by the optimum solution to the entire set
directly. The synthesis of a composite farm reduces the aggegation bias but its practical
weakness is that it is difficult to identify several institutional variables and human factors
and their distributions within the population. These factors include institutional
constraints, motivations, preferences and managerial ability that have an important
impact on farm organization, product efficiency and farm earnings.

Choosing a "model farm" depends on the purpose for which the results of the
study will be used. The purpose of this study is to identify resource constraints and farm
adjustments and to estimate farmers’ responses to input and output price changes such
that the problems of aggegation bias and their control are not relevant, and there is
justification for the use of the "average farm” approach. We can speak of a Gezira model
farm because there is homogeneity with respect to important variables such as soils,
climate, topogaphy, input availability, management; and sociocultural setting. The
information includes size of holding, mode of operation, availability of family labor,
circulating capital, informal credit and subsistence needs. Much of the discussion that

follows is based on the 1989/90 farm survey.

5.2 LAND USE

Table 5.1 presents the land use of an average Gezira tenancy. The mean tenancy
area is 23.6 feddans per family. There appears to be little variation in the mean size of
holding as 80 percent of tenants possess 20 feddans each, 17 percent have 40 feddans

each, 2 percent 28 feddans each and only 1 percent has 18 feddans. The land was

76

allocated as follows: cotton, 5.9 feddans; wheat, 5.9 feddans; sorghum, 5.3 feddans and
fallow, 6.5 feddans. Only 10 farmers cultivated goundnuts giving a mean area of 2.8
feddans. Three farmers in the Loata block did not cultivate any crops because the minor
canal was covered with silt and weeds and could not convey water to their tenancies. A
small fraction of the land under fallow was gown with vegetables.

The cropping intensity is 51 percent which falls Short of the planned cropping
intensity of 75 percent for the main Gezira. The main reason for the disparity is due to
shortages of water, operating capital and other production inputs. Ninety two percent of
the tenants stated that the size of their tenancies was adequate. However, the majority of
tenants would like the Board to relax the institutional controls it imposes and allow them
to choose their own crop mix. The choice would be dictated by product prices, crop labor
requirements, duration of land occupation and the availability of produce marketing. The
majority of the tenants prefer to cultivate more sorghum which is the major staple food
that provides food security, in-kind payment for laborers, and stalks for building shelters

and animal feed.

   

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TABLE 5.1 LAND USE OF AN AVERAGE GEZIRA TENANCY, 1989/90.
CROP \ BLOCK TAYBA WAD NUMAN TURIS LOATA

No. Fed. No. Fed. No. Fed. No. Fed.
Fallow 8.3 7.0 8.1 17.2
Cotton 21 5.9 18 5.6 17 5.9 10 6.5
Wheat 21 5.9 21 5.6 17 5.6 9 6.6
Groundnuts 8 3.0 2 2.0
Sorghum 22 3.5 21 5.4 23 5.1 20 6.2 II
Source: Computed from survey data

   

77

Forty six percent of the tenants practice Sharecropping, the majority of whom
sharecrop sorghum. Three of the ten farmers who cultivated goundnuts sharecropped. A
small percentage sharecrop cotton but wheat is not sharecropped because the Board
picks up most of the production costs. The general conditions of Sharecropping are: the
tenant provides land and seeds and the sharecropper performs agicultural operations.
The produce is divided equally between them. There are three reasons for
Sharecropping: 1) it overcomes cash shortage and low supply of family labor; 2) it frees
tenants to pursue off-farm activities; and 3) the household of the sharecropper becomes
a potential source of wage labor for the rest of the tenancy.

Table 5.2 presents the yield performance under research and tenant conditions.
The wide yield gap can be attributed to bad management of production resources on the
farm. Crop trials at Gezira research station demonstrated that early sowing, furrow
irrigation, shorter length of irrigation and pre-irrigation lead to significant improvements
in yield.

Table 5.3 shows that the average yields vary from block to block depending on
the level of management and water supply in the season. The factors affecting farm

management include land preparation, sowing date, weeding, pests and diseases.

5.3 WATER USE

Supply and demand for irrigation water at the farm level is determined by canal
capacity, crop water requirements, sowing dates and areas under individual crops. The
crop water requirements are determined by a traditional uniform rate of 30 cubic meters
per feddan per day excluding losses on transit. This corresponds to the traditional Gezira

schedule of 420 cubic meters per irrigation per feddan at a two-week watering interval,

78

 

 

 

 

 

 

 

 

 

 

 

 

TABLE 5.2 CROP YIELDS UNDER RESEARCH AND TENANT CONDITIONS.
CROP UNITS RESEARCH TENANT

Cotton MS Kan/Fed 12.0 6.8

Cotton LS Kan/Fed 7.4 4.5

Wheat Kg/ Fed 1,000 550

Groundnuts Kg/ Fed 1,440 750

Sorghum Kg/Fed 900 450

w: Compiled from survey data.

 

 

 

 

 

 

 

 

 

I-T"ABLE 5.3 :VERAGE YIELDS PER FEDDAN FOR SURVEY FARMS 1989/90.
CROP \ BLOCK TAYBA WAD NU MAN TURIS LOATA
Cotton 7.1 3.1 4.1 4.2
Wheat 976 687 754 408
Groundnuts --- --- 770 923
Sorghum 790 542 355 383

 

 

 

 

 

 

 

 

irrespective of the crop or season.

The 1989/ 90 cropping season gives average waterings of 11 for cotton, 7 for wheat,
7 for goundnuts and 6 for sorghum. This gives a season average of 7.8 waterings at the
rate of 420 cubic meters per feddan per watering. This average is less than the
traditionally stated number of average waterings of 8.4 at the rate of 420 cubic meters
per feddan per watering (Faki, 1982). Groundnuts and sorghum production is

supplemented by rainfall in August and September. Thirty percent of the survey tenants

79

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

=====================LL
TABLE 5.4 HATER REQUIREMENTS BY A 20 FEDDAN GEZIRA TENANCY
MONTH \ CROP COTTON WHEAT GROUNDNUTS SORGHUM TOTAL
June 420 420
July 420 420 420 1,260
August 420 420 420 1,260
September 840 840 840 2,520
October 840 420 840 420 2,520
November 840 840 420 2,100
December 840 840 1,680
January 840 840 1,680
Febuary 840 840 1,680
TOTAL 5,880 3,780 3,360 2,100 15,120
* Cubic meters of water per feddan.

héggzgg: Ministry of Irrigation.

 

 

 

stated that they did not receive enough irrigation water, and 65 percent received some of
their irrigations late. The researcher saw a sorghum crop in one ’number’ along a minor
canal at Wad Numan that had dried up after two irrigations because the canal was
blocked with Silt and weeds, and was not capable of conveying enough water.

There are two peak water demand periods under the traditional irrigation
schedule; 1) July to September when cotton, goundnuts and sorghum are established in
the field; and 2) October to November when cotton, wheat, goundnuts and sorghum all
require irrigation. The first period is less critical because of the supplemental rainfall,
which was adequate during the survey season but has been less predictable in some

seasons. Problems of water logging and late sowing of crops are less critical. The second

80

peak demand period is more critical where irrigation was a real limiting factor. The area
sown under wheat depends on the availability of water in the season.

Important aspects of irrigation management include: 1) pre-irrigation; 2) time of
sowing; 3) method of water application; and 4) length of irrigation. Pro-watering has
been on the decline because of lack of water and tenant interest. CrOps were often sown
late because of shortages in equipment with which to prepare the land and of water
shortage for the first irrigation. Early crop establishment reduces the risk of interruption
by the rains. The traditional method of field water application by basins promotes
waterlogging. The network of cross-bunds of the ”angaya" system prevents the removal of
water which may stand for days. The tenants have to evacuate drains into the adjacent
fallow since there is no field drainage at the lower end of the number. Late irrigation in
February not only reduces land preparation for goundnuts but can introduce honeydew

contamination and insect pest build-up.

5.4 FARM LABOR FORCE
54.1 W

The average family size of the sample households was 7.3 persons. The range is
from 1 to 17 persons per household; 12 percent are less than seven years old, 24 percent
are eight to fifteen years and 64 percent are more than 15 years old. However, the
average population is relatively young. Nineteen percent of the tenants are females. This
proportion is much higher than the scheme average which is about 10 percent (Ismail and
Khalid, 1989). The average age of the tenants is 50 years. 48 percent are above average

and only 15 percent are less than 30 years old.

81

Illiteracy rate is 33 percent, "Khalwa" (Islamic school) education 41 percent,
primary school 16 percent, intermediate school 7 percent and senior secondary school
only 3 percent. The tenants value education such that most of them send their children
to school. This is an important development as education could broaden a person’s
horizon thus enabling him to maximize the utilization of the scarce resources under his
control leading to increases in farm productivity even though educated children tend to
migate to the urban centers or to the Gulf in search of government and private sector
jobs.

The off-farm activities of the tenants are shopkeeping, trading in crops and
livestock, money lending, local transport and laborers. Twenty two percent of the tenants
have engaged in some form of off-farm employment. The types 'of work range from
casual labor 20 percent, trading 27 percent, government employment 27 percent and
others 26 percent. Those who work in the village are 29 percent, local towns 46 percent,
Medani 12 percent and outside the Gezira 13 percent. The number of days worked ranges
from 1 to 30 with about 45 percent working for the whole month. The average earnings
was LS 436 per month.

542 W

Despite the large family size, very few family members are directly involved in
farming activities. The average family labor available amounts to about 25 man-days per
month. Thus, the available labor for any farm operation is about one person per
household. When the tenant who mainly serves as a supervisor and may be involved in

off-farm activities is excluded, then the amount of available labor is reduced to 15 man-

days per month. Thus, not even one family member is fully engaged on the farm.

82

Family labor input tends to be high during the peak labor demand periods such
as cotton picking in January to March. Reasons for the low family labor input are the
low farm incomes and the availability of off-farm jobs. Demogaphic structure of the
family and physical requirements of cultivation also determine the family labor input.
Female members of the household are restricted to housework and there is a higher
tendency among young people to move to town. Older tenants with working sons tend to
supply less labor than younger tenant’s. Family labor supply is also determined by the
degee of mechanization and the pattern of cultivation.

Total average family labor as a percentage of total labor is 35 percent. Family
labor contribution for the different crops is as follows: cotton 33 percent, wheat 49
percent, goundnuts 25 percent and sorghum 33 percent.

543 W

Gezira tenants depend on hired labor for their farming activities. Labor is
secured from labor camp settlements outside the village or through direct recruitment in
western Sudan. Labor demand is throughout the season and is high during weeding and
harvesting periods.

The 1989/90 survey reveals that 42 percent of the laborers are of local origin, 44
percent are from Western Sudan and the remaining 14 percent are from other regions of
the Sudan and West Africa. Thirty percent of the tenants did not have enough labor.

The derivation of the labor coefficients was based on the 1989/90 survey data.
The labor requirement for a given crop was derived as follows: records of the number of
days spent on each of the crops each month were kept; when an operation overlaps a

two-month period an estimate of the monthly labor distribution is used to allocate the

83

labor. The estimated total number of days each month were divided by the number of
households per month. This yields the crop labor requirements in man-day per month.

The average coefficient per feddan was obtained by dividing the total number of
days spent on an enterprise within a month by the total area of land in feddans allocated
to the enterprise in question. The calculation was done for all crop production activities.
Table 5.5 presents the crop labor requirements in Man-days per month per feddan in the
main Gezira scheme.

Peak labor demand periods were the months of July, August, October, November,
December and January. Labor costs which tend to vary with the activity and crop, are
highest during these periods because both weeding and harvesting are tedious operations.
Labor wage rates have been rising Sharply during the last ten years, due perhaps to
competition from new irrigation schemes, the mechanized subsector and the urban
informal sector. The usual practice for a son over 18 years old is to receive wages for
work performed on the farm, at a compensation equal to the prevailing market wage
rate.

Labor hiring takes place throughoUt the season and its availability is cOnStrained
by operating capital. There are about 50 man-days of available labOr per month that rises
to 115 man-days in January, February and March due to the arrival of cotton pickers from

Western Sudan.

5.5 FARM CAPITAL
Capital in farming refers to man-made assets that are produced for the purpose
of being used in the process of agicultural production. It includes items such as

machines, tools, roads, livestock, seeds, fertilizers, insecticides and herbicides. Capital

     

84

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TABLE 5.5 MONTHLY CROP LABOR REQUIREMENTS, Md/Fed 1989/90.
MONTH \ CROP COTTON WHEAT GROUNDNUTS SORGHUM TOTAL
June 1.6 2.5 0.6 4.7
July 2.7 7.6 3.3 13.6
August 4.4 6.1 4.1 14.6
September 5.4 2.5 0.8 8.7
October 1.3 0.8 1.8 6.4 10.3
November 1.1 7.6 4.5 3.1 10.3
December 3.7 1.1 8.8 0.5 14.1
January 7.4 0.8 5.7 13.9
February 7.3 0.6 0.9 8.8
March 5.1 1.1 6.2
April 2.9 0.5 3.4
May, 2.2 2.2
TOTAL 45.1 6.5 40.4 20.5 112.5
\Source: *Cgm uted from surve data.

 

     

 

assets are classified according to the length of their productive life into fixed capital and
operating capital. Fixed capital consists of items with a production life that extends
beyond one production cycle while operating capital consists of production items such as
seeds and fertilizers that are used up in a single production cycle. The Gezira tenants
have a low level of fixed assets. All tenants have hand tools and 66 percent keep some
animals in their backyard. There are no buildings on the farm and there is limited
storage space in the villages.

Operating capital items such as seeds, fertilizer and labor are purchased inputs

and their use entails cash expenditures. The Sudan Gezira Board, personal savings,

85

livestock sales, credit from private moneylenders and remittances from relatives working
abroad are the main sources of operating capital. Low levels of farm incomes restrict the
level of savings. Institutional credit is non-existent although the Board prefinances most
of the production costs for wheat and cotton. The local moneylenders charge high rates
of interest for their financial services resulting in the tenants becoming indebted.

Table 5.6 presents cash expenditures of a representative 20-feddan Gezira
tenancy on input purchases per month per crop. These are the actual Sudanese pounds

spent on land preparation, labor and material inputs during the 1989/90 cropping season.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TABLE 5.6 CASH EXPENSES OF A GEZIRA MODEL FARM, 1989/90. I
MONTH COTTON MS COTTON LS WHEAT PEANUTS SORGHUM TOTAL
Jun 281 281 172 66 800
Jul 61 25 103 54 243
_539 61 45 93 79 278
Sep 236 236 "177 10 67 726
Oct 489 189 101 10 85 874
Nov 10 466 163 316 119 1,074
Dec 210 15 30 24 115 394
Jan 150 205 10 104 573
Feb 270 175 20 465
Mar 180 350 200 730
Apr 240 260 156 656
May 157 157 314
TOTAL 2,345 2,404 857 832 689 7,127
Source: Computed from survey data.

 

 

 

86

The total cash expenses amounted to about LS 7,150. Cotton production is the most
expensive followed by wheat, goundnuts and sorghum, respectively. The major cost items
include land preparation, cultural operations, material inputs, harvest and Others like
services and land and water rates. The financial analysis enables us to compare the
competitiveness of the crops gown in the main Gezira by their return to the operating

costs of land, labor and irrigation water at the farm level.

5.6 PRODUCTION TECHNOLOGY

Table 5.8 presents two intensity levels specified for each of the crop enterprises.
The first intensity level yields approximates the conditions that prevail in the main
Gezira in the 1989/ 90 cropping season. Yields for this level are the average yields
obtainable for five years, 1984 / 85-1988/ 89. The second intensity level involves the use of
improved seed varieties, better land preparation, application of chemical fertilizers,
pesticides and insecticides, better incentive structures and a strong research support. The
potential yields for cotton and wheat could be attainable if farmers did not divert
fertilizers to their sorghum crop. Yield assumptions for intensity level 2 are based on
Gezira research station field trial results for all the crops. The highest yield trial results
were excluded and 20 percent deducted in order to arrive at a moderate estimate
concerning possible increases in crop yields attainable under the farm management
conditions of the tenants. The trial results indicate that higher doses of fertilizer for
cotton and wheat, and the application of fertilizer in goundnuts and local sorghum, Show
potential for increasing yields of all crops even further. Yields higher than those in
intensity level 2 reflect an optimistic scenario that can only occur with significant

improvements in agicultural research, delivery of research results and a proper structure

     
   

TABLE 5.7 FARM GATE PRICES IN THE GEZIRA, 1987/88 - 1989/90.

 

 

 

 

 

 

CROP \ PERIOD UNIT 1987/88 1988/89 1989/90
Cotton MS LS/Kan 235 378 530
Cotton LS . LS/ Kan 290 645 740
Wheat LS/Kg 1.0 2.4 3.0
Groundnuts LS/kg 1.4 1.4 2.8
Sorghum LS/Kg 1.2 1.4 2.9

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TABLE 5.8 AVERAGE CROP YIELDS IN THE MAIN GEZIRA.

CROP UNIT INTENSITY 1 INTENSITY 2
Cotton MS Kan/Fed 6.8 6.4

Cotton LS Kan /Fed 4.5 5.8

Wheat Kg/Fed 650 850
Groundnuts Kg/ Fed 750 1,200

Local sorghum Kg/ Fed 500 750

Hybrid sorghum Kg/Fed 1,200 1,600

Source: Compiled from survey data.

 

 

 
    

of incentives that could encourage tenants to adopt new technology.

5.7 ENTERPRISE BUDGETS
Enterprise budgets are estimates of costs and returns expected from crop or
livestock enterprises. They contain information for the allocation of resources among the

alternate crop enterprises and alternate uses. An enterprise budget is an estimate of the

88

costs of production per unit of land. Having the budgets on per feddan basis makes them
easier to use in farm planning. Farm level decision makers need estimates about the
profitability of alternatives. Enterprise budgets have value to many users other than farm
level decision makers; for instance, lenders can use enterprise budgets to evaluate the
viability of proposed farm investments, and farm policy analysts can use the information
to determine the expected impact of policy alternatives.

This study uses the approach of average costs and returns that reflect the
conditions of a typical 20-feddan Gezira tenancy. Tenants do not posses fixed assets, do
not incur fixed costs nor pay water and land charges for land not brought under
production.

Table 5.9 Shows the division of responsibility over farm operations between the
Board and the tenants. The Board determines areas, varieties, cultural practices, and
cropping calendars. It also participates in some of the farm operations like land
preparation and provides inputs for cotton and wheat.

Tables 5.10 to 5.15 present the goss margins per feddan for medium-staple
cotton, long-staple cotton, wheat, goundnuts and sorghum. The operating costs tenants
have to incur are for: 1) land preparation - plowing, levelling, split ridging, opening of
irrigation canals, cross ridging and disk harrowing; 2) cultural operations - sowing,
weeding, geen ridging, thinning, canal cleaning and irrigation; 3) material inputs - seeds,
fertilizers, insecticides, and sacks and strings; 4) harvest - local transport, picking,
packing, stalk pulling and transport; and 5) other items -transport, services and land and
water rates.

Table 5.10 shows the enterprise budget for two intensity levels of medium-staple

cotton. The operating costs that rise with yields are for fertilizers, herbicides, sacks,

89

 

1
_IABLLLLBILARD AND TENANT RESPON

 

 

 

 

 

 

 

 

 

 

 

IBILITIES Oi ARM OPERATI s

FARM OPERATIONS COTTON WHEAT ,QROUNDNUTS SORGHUM

LAND PREPARATION B T r
_QQLIURALPRACTICES T T T

HARVESTOPERATIONS T/B T T

INPUTS 8 T T

TRANPORT T/B T T

T = Tenant B a Board T18 . Tenant/Board

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TABLE 5.10 ENTERPRISE BUDGET FOR MEDIUM-STAPLE COTTON.
FARM OPERATIONS UNIT INTENSITY 1 INTENSITY 2
Yield Kan/ Fed 6.8 8.4
Price LS/ Kan 530 530
REVENUE 1.5/Fed 3,604 4,452
LAND PREPARATIONS LS/Fed 281 281
CULTURAL PRACTICES LS/ F ed 343 343
MATERIAL INPUTS LS/Fed 559 764
HARVEST LS / Fed 840 976
OTHER ITEMS LS/Fed 322 344
TOTAL COST LS / Fed 2,345 2,708
GROSS MARGIN LS/Fed 1,259 1,744
Source: Computed from survey data.

 

 

 

 

9O

picking, packing, transport and services. Intensity level 1 costs LS 2,345 per feddan and
gives a return of LS 1,259. Intensity level 2 costs LS 2,708 per feddan and gives a return
of LS 1,744 per feddan.

Table 5.11 shows the enterprise budget for two intensity levels of long-staple
cotton. The operating costs that rise with yields are for fertilizers, herbicides, sacks,
picking, packing, transport and services. Intensity level 1, costs LS 2,404 per feddan and
gives a return of LS 1,106 and intensity level 2 costs LS 2,832 per feddan and gives a
return to operating capital of LS 1,692 per feddan.

Table 5.12 shows the enterprise budget for two intensity levels of wheat. The
operating costs that rise with yields are for fertilizers, sacks, harvesting, transport and
services. Intensity level 1, costs LS 857 per feddan and gives a return of LS 1,093 and

intensity level 2 costs LS 1,142 per feddan and gives a return to operating capital of LS

   

 

 

 

 

 

 

 

 

 

 

 

TABLE 5.11 ENTERPRISE BUDGET FOR LONG-STAPLE COTTON.
FARM OPERATIONS UNIT INTENSITY 1 INTENSITY 2
Yield - Kan/ Fed 4.5 5.8
Price LS/ Kan 740 740
REVENUE LS/Fed 3,510 4,524
LAND PREPARATION LS/Fed 281 281
CULTURAL PRACTICES LS / Fed 353 353
MATERIAL INPUTS LS/Fed 653 859
HARVEST LS/F ed 810 1,005
OTHER ITEMS LS /F ed 307 334
TOTAL COST LS / Fed 2,404 2,832
GROSS MARGIN LS/Fed 1,106 1,692

 

 

 

 

 

 

 

 

TABLE 5.12 ENTERPRISE BUDGET FOR WHEAT.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FARM OPERATIONS UNIT INTENSITY 1 INTENSITY 2
Yield Kg/ Fed 650 850
Price LS/Kg 3.0 3.0
REVENUE LS / Fed 1,950 2,550
LAND PREPARATION LS/Fed 177 177
CULTURAL PRACTICES LS / F ed 90 90
MATERIAL INPUTS LS / Fed 254 441
HARVEST IS/ Fed 120 185
OTHER ITEMS LS / Fed 216 249
TOTAL COST LS / Fed 857 1,142
GROSS MARGIN LS/F ed 1,093 ,1,408
Source: Computed from survey data.

TABLE 5.13 ENTERPRISE BUDGET FOR GROUNDNUTS.

FARM OPERATIONS UNIT INTENSITY 1 INTENSITY 2
Yield Kg/ F ed 750 1200
Price LS/Kg . 2.8 2.8
REVENUE LS/ Fed 2,100 3,360
LAND PREPARATION LS/Fed 65 65
CULTURAL PRACTICES LS/ Fed 259 259
HARVEST LS/F ed 288 359
MATERIAL INPUTS LS / Fed 92 372
OTHER ITEMS LS/ Fed 128 137
TOTAL COST LS / F ed 832 1,192
GROSS MARGIN LS/Fed 1,268 2,168

 

 

 

 

 

Source: Computed from survey data.

 

 

 

 

92
1,408 per feddan.

Table 5.13 shows the enterprise budget for two intensity levels of groundnuts. The
Operating costs that rise with yields are for fertilizers, sacks, harvesting, threshing and
transport. Intensity level 1, costs LS 832 per feddan and gives a return of LS 1,268 and
intensity level 2 costs LS 1,192 per feddan and gives a return to operating capital of LS
2,168 per Feddan.

Table 5.14 shows the enterprise budget for two intensity levels of local sorghum.
The operating costs that rise with yields are for fertilizers, sacks, harvesting, threshing
and transport. Intensity level 1, costs 15 689 per feddan and gives a return of LS 761 and
intensity level 2 costs LS 958 per feddan and gives a return to operating capital of LS
1,217 per Feddan.

Table 5.15 shows the enterprise budget for two intensity levels of hybrid sorghum.

The operating costs that rise with yields are for fertilizer, sacks, harvesting and transport.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TABLE 5.14 ENTERPRISE BUDGET FOR LOCAL SORGHUM.
FARM OPERATIONS UNIT INTENSITY 1 INTENSITY 2
Yield Kg/ Fed 500 750
Price LS/ Kg 2.9 2.9
REVENUE LS/ Fed 1,450 2,175
LAND PREPARATION LS/Fed 66 66
CULTURAL PRACIICES LS/ Fed 215 211
MATERIAL INPUTS LS / Fed 43 254
HARVEST LS/ Fed 221 263
OTHER ITEMS LS/ Fed 144 164
TOTAL COST LS / Fed 689 958
GROSS MARGIN LS/Fed 761 1,217
Source: computed from survey data.

 

 

 

93

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TABLE 5.15 ENTERPRISE BUDGET FOR HYBRID SORGHUM.
FARM OPERATIONS UNIT INTENSITY 1 INTENSITY 2
Yield Kg/ Fed 1,200 1,600
Price LS/ Kg 2.3 2.3
REVENUE LS/ Fed 2,760 3,680
LAND PREPARATION LS/ Fed 66 66
CULTURAL PRACTICES LS/ Fed 211 211
MATERIAL INPUTS LS/Fed 221 449
HARVEST LS / Fed 375 450
OTHER ITEMS LS /Fed 224 264
TOTAL COST LS /Fed 1,097 1,440
GROSS MARGIN 1.5/Fed 1,663 2,240
Source: Computed from survey data.

 

 

 

Intensity level 1, costs LS 1,097 per feddan. and gives a return of LS 1,663 and intensity
level 2 costs LS 1,440 per feddan and gives a return to operating capital of LS 2,240 per
feddan.

Table 5.16 shows crop costs, revenue and net income for the 1989/ 90 cropping
season. The main components of an enterprise budget are expected revenue, costs, and
net returns. The production quantities and prices are indicative of what would occur on a
typical Gezira farm. The yields are the long term average yields and the prices are the
farmgate prices for the scheme. We multiply the yield with the price in order to get the
revenue for the enterprise. In the operating inputs section, all the costs of the inputs per
feddan are estimated and subtracted from the revenue to give the gross margin per

feddan or the return to total operating costs. This returns figure is good for short term

planning.

94

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TABLE 5.16 CROP COSTS, REVENUE AND NET INCOMES, 1989/90.

CROP GROSS REVENUE TOTAL COST GROSS MARGIN
INTENSITY 1 2 1 2 1 2

Cotton MS 3,604 4,452 2,345 2,708 1,259 1,744
Cotton LS 3,510 4,524 2,404 2,610 1,106 1,692
Wheat 1,950 2,550 857 1,142 1,093 1,408
Groundnuts 2,100 3,360 832 1,192 1,268 2,168
Sorghum 1,450 2,175 689 958 761 1,217
Source: Computed from survey data.

 

 

These figures show that an adoption of a new technology will lead to significant
increases in yield. Medium-staple cotton gives a return of LS 1,744 per feddan, long-
staple cotton LS 1,692 per feddan, wheat Ls 1,408 per feddan, groundnuts LS 2,168 per

feddan, and sorghum LS 761 per feddan.

CHAPTER VI

COMPARATIVE ADVANTAGE FOR GEZIRA CROPS

6.1 COMPARATIVE ADVANTAGE

Policy reforms designed to take advantage of comparative advantage in the 1980’s
in the developing countries include reduction of state participation in agriculture,
liberalization of commodity trade, freeing of market forces to play a role in directing
economic activity along efficiency lines, and cost-effective allocation of agricultural
research funds (Morris, 1988).

Ricardo (1817) extended the optimization principle to define efficient choice of
output by firms into the arena of international trade. He pointed out that a country can
achieve net welfare gains by concentrating productive capacity on goods and services of
which it is relatively an efficient producer and trading for the rest.

The domestic resource cost ratio is a measure of relative economic efficiency of
productive resources that indicates production alternatives to the national income. We
need to determine the set of alternative enterprises that are relatively more efficient.
Relative efficiency (comparative advantage) depends on: 1) technology which
determines production possibilities and influences rates of product transformation; 2)
resource endowment which determines the value of domestic resources (land, labor,
capital and water); 3) and world prices which determine the value of all inputs and
outputs.

The economic efficiency measures have to be used with caution because they are

sensitive to: 1) the specification of yields and world price levels that may not reflect long

95

96

run averages; 2) differences in regional border price equivalents and transportation costs;
3) the cost of nontraded inputs in domestic markets; and 4) the choice of exchange rate
for the valuation of border prices.

The domestic resource cost ratio for a commodity is given by the following
equation (Youngblood, 1983):

The DRC = Q - V
(PY - M)X

where: D = Value of the domestic resources used in the production of the
commodity (LS/feddan)

V = Value of any joint product (LS/feddan)
P = Border price of the commodity (S / unit of output)

Y = Yield of the commodity (Output/Feddan)

M = Value of traded inputs used in the production of the commodity
($/feddan)
X = Real exchange rate

It can be seen that the numerator is the cost of the purely domestic inputs and
resources; and the denominator is the net foreign exchange earnings or net potential
foreign exchange earnings. If the domestic resource cost ratio is less than one, the
country has a comparative advantage in the production of the particular commodity
because it can exchange domestic resources for foreign exchange at a rate below that at
which the economy as a whole converts the domestic resources into foreign exchange. If
the domestic resource cost ratio is more than one, it indicates that the cost of the
domestic resource used in the production of a given commodity are more than the
foreign exchange saved and hence it is not an efficient use of the resource to produce

that commodity. This implies comparative disadvantage in the production of the

commodity.

97

The main uses of DRC ratios are: 1) revelation of differences between private
and social profitability; 2) comparative advantage between different crop enterprises,

regions and technologies; and 3) setting agricultural research priorities.

6.2 THE EFFECTS OF POLICY

The calculation of economic profitability of crops is closely related to the
measurement of the effects of economic policy. Crop profitability is looked at from the
point of view of the nation using economic prices rather than from the point of view of
the tenant or government budget using financial prices. A combination of trade
restriction, price control, tax, subsidy, or exchange rate policies can cause divergences
between financial and economic prices. If the financial prices are higher than market
prices, then consumers have to pay higher than world price or the government treasury
must subsidize the commodity. The tax system exerts both direct and indirect effects on
exports, imports and domestic production. Taxes drive a wedge between supply and
demand thus creating disincentives.

Since Sudan has no market power in respect to most agricultural commodities,
macroeconomic and commodity policies have no significant effect on world prices and
economic valuation of tradable commodities. An overvalued exchange rate depresses the
prices of tradables relative to those of non-tradables and acts as a tax on all tradable
activities and a subsidy on imports. Imports of petroleum products would be cheaper and
exports of cotton would be more expensive. However, the tax effect on exports may be
offset by the subsidization effect on the inputs. If the government employs a fixed
exchange rate and chooses fiscal and monetary policies that permit rates of inflation

higher than the average rate experienced in its trading partner countries, and changes

98

the exchange rate sufficiently to offset the loss of international competitiveness caused by
the differential inflation, then the exchange rates will cause the financial prices of
tradables to be higher or lower than efficiency levels in a manner that is directly
analogous to the use of a trade restrictive policy for a given input or output (Jansen,
1986).

The economic prices of domestic factors are given by the determination of
opportunity costs, which are reflective of the underlying supply and demand conditions in
domestic factor markets. An enactment of tax or subsidy policies on any factor of
production (land, labor and capital) creates a divergence between financial costs and
economic costs resulting in a subsidy/tax to the system. Factor price policies (credit,
subsidies, rationing, minimum wage and wage freeze laws) can cause financial factor
costs to exceed or fall short of comparable opportunity costs. Consequently, financial
profitability can be greater than, less than, or equal to economic profitability depending
on whether the net effects of commodity and macroeconomic policy are subsidization,

taxation or neutrality.

63 REVIEW OF COMPARATIVE ADVANTAGE STUDIES

6.3.1 Sattar (1982) calculated the coefficient of foreign exchange dependence,
coefficient of international competitiveness and coefficient of private profitability for
medium-staple cotton, long-staple cotton, wheat, groundnuts and sorghum grown in the
Gezira in the 1980/81 cropping season. Table 6.1 presents these coefficients. The
coefficient of foreign exchange dependence and the coefficient of international
competitiveness are important indicators for national crop policy formulation. The

coefficient of private profitability is of primary interest to the individual producer who

99

can only produce when the coefficient is favorable. The coefficient of private profitability
represents local or regional economics of production and can therefore be in conflict
with the other two coefficients.

The W (CFED) is the percentage
proportion of border value of one feddan’s output of a crop which is used up in its
production as a payment for imported inputs. The lower this coefficient is for a product
the greater is its positive contribution to the balance of payments. It also indicates the
extent to which the production of a crop would be sensitive to disruptions in imports or
domestic distribution of imported inputs. Wheat has the highest (126) and goundnuts
the lowest coefficient of foreign exchange dependence (32).

The Qefligign; 9f intemational competitiveness (CIC) represents the number of
units of international value added by export or saved by substituting a local good for an
import per unit of domestic resources used in its production. The coefficient of
international competitiveness is a ratio of domestic resource costs of producing one
feddan of a crop to the international value added from its production. The negative
coefficient for wheat means that there is an outflow of foreign exchange because the cost
of traded inputs in domestic production is more than border value of output, resulting in
negative international value added.

The gogfliciegt of private profitabm '91 (CPP) is the ratio of production costs to
the value of a product at the producer level. The degee of profitability of the product is
indicated by the magnitude of the coefficient above or below 1.00. A coefficient of less
than 1.00 indicates that it is not profitable for the producer to produce the crop for the

market at the prevailing yields and producer prices. Because of low yields, wheat and

100

sorghum were the only profitable crops in the 1980/81 cropping season. The coefficient
of private profitability is of primary interest to the individual producers.

6.3.2 Youngblood and Leonard (1983) analyzed the sensitivity of foreign exchange
dependence, value added, domestic resource cost, and private profitability indicators on
changes in yields, input costs, border and producer prices and exchange rates.

Table 6.2 presents the values of the four indicators. Wheat has comparative
disadvantage, lowest value added, and highest foreign exchange dependence, but it is the
least unprofitable to the producers. Groundnuts shows the best comparative advantage,
third highest value added and least foreign exchange dependence. Long-staple cotton
shows the highest value added and low foreign exchange dependence but it is not
profitable to the producers.

6.3.3 Jansen (1989) built a model for analyzing crop profitability in the Sudan.

She estimated domestic resource cost ratios for all the major crops.

 

TABLE 6.1 COEFFICIENTS 0F DEPENDENCE, COMPETITIVENESS AND PROFITABILITY, 1980/1981.

 

 

 

 

 

 

CROP \ COEFFICIENT ‘ l. CFED 2. CIC 3. CPP
Cotton MS 42 1.19 0.75
Cotton L8 43 1.26 0.77
Hheat 126 -0.46 1.08
Groundnuts 32 1.35 0.62
Sorghum 37 1.20 1.26

 

 

 

 

1. CFED u Coefficient of foreign exchange dependence.

 

2. CIC - Coefficient of international competitiveness.

 

3. CPP a Coefficient of private profitability.

 

 

 

Source:

    
   

  
 

101

 

TABLE 6.2 DOMESTIC RESOURCE COSTJ VALUE ADDED DEPENDENCE, PROFITABILITY COEFFICIENTS, 1983.

 

 

 

 

 

 

CROP \ INDICATOR 1. DRC 2. VA 3. CFED 4. CPP
Cotton MS 0.88 156.8 0.40 0.71
Cotton LS 0.91 173.5 0.38 0.72
Wheat 1.05 26.3 0.59 0.97
Groundnuts 0.86 102.4 0.29 0.76
Sorghum 0.94 49.0 0.33 0.76

 

 

 

 

 

1. DRC - Domestic resource cost ratio.

 

2. VA - Value added.

 

3. CFED - Coefficient of foreign exchange dependence.

 

4. CPP a Coefficient of private profitability.

 

 

 

Source: Youngblood and Leonard, 1983.

1

 

Table 6.3 summarizes her economic analysis for the 1988/89 cropping season for
medium-staple cotton, long-staple cotton, wheat, goundnuts and sorghum gown in the
Gezira using economic prices for crop inputs and outputs. The first line shows world
prices, fob Port Sudan in US cents per pound. The second line indicates the yield
assumption used in the analysis in Kg per feddan (Kantars per feddan for cotton). Lines
3-5 present net revenue per feddan, production costs per feddan and profits per feddan.
Border-equivalent prices are used to calculate crop revenues. Lines 6-8 present
government floor price, the border-equivalent price and production costs on a per metric
ton or per kantar basis. Lines 9-11 provide a comparison of these variables: floor price as
a percent of border-equivalent price, floor price as a percentage of production costs, and
finally border-equivalent price as a percentage of production costs, respectively. Line 12
presents the domestic resource cost ratios which are the ratios of domestic resource costs
to international value added.

Jansen (1989) presented her domestic resource cost ratios for the 1989/90

102

 

TABLE 6.3 SUMMARY OF ECONOMIC VALUE CALCULATIONS, 1988/89.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

VARIABLE \ CROP COTTON MS COTTON LS WHEAT PEANUTS SORGHUM
Exchange rate (LS/S) 9.00 9.00 9.00 9.00 9.00

1 World price fob Port Sudan 1/ 0.50 0.80 194 550 115

2 Yield, (Kg/Fed) 2/ 6.00 4.50 500 600 500

3 Border-Equiv Revenue/Fed LS 3/ 2,142 2,877 1,014 1,169 320

4 Production Costs per Fed, (LS) 2,300 2,337 750 913 591

5 Profit/Fed (LS) (-158) 540 264 256 (~271)
6 Government floor (F) Price 4/ 337 535 NA NA NA

7 Border Equivalent Price 4/ 357 639 2,027 2,784 639

8 Prod Costs (LS/Mt) 4/ 383 519 1,501 1,521 1,182
9 F Price % Border Equiv Price 94% 84% NA NA NA

10 F Price % Production Costs 88% 103% NA NA NA

11 Border Eduiv P % Prod Costs 93% 123% 135% 183% 54%
12 DRC Ratios S/ 1.09 0.77 0.52 0.76 2.18

 

1/ All are fob Port Sudan, US $/Mt Except Cotton which is US cents/lb

 

and wheat which is cif Port Sudan.

 

2/ Cotton yield in Kantars (143 Kg) per Feddan.

 

3/ Border-Equivalent net revenue assumes both lint and cottonseed

 

oil and cake are exported.

 

4/ Unit varies by cropl but is same for floor price, border-equivalent

 

price and production costs.

 

5/ DRC is the ratio of domestic resource costs to international value

 

added in Sudanese pounds calculated using economic prices.

 

 

Source: Jansen! 1989.

 

 

cropping season calculated at a shadow exchange rate of LS 9/5. If the domestic
resource cost ratio is less than one at the shadow exchange rate, we can conclude that

Sudan has a comparative advantage in the production of a particular crop. On the other

103

hand, if the domestic resource cost ratio is geater than one at the shadow exchange
rate, we can conclude that Sudan does not have a comparative advantage in the
production of the particular crop. The profitability calculations indicate what the
profitability to the farmer would be if he/she were able to export the crop at the
estimated world price, less the estimated marketing costs from Port Sudan to the
farmer’s region. In the case of wheat, it indicates the revenue the farmer would get if
he/she were to receive the same amount from a local buyer as the buyer would pay for
imported wheat. Table 6.3 shows that profitability is negative for medium-staple cotton
and sorghum production based on calculations at the shadow exchange rate of LS 9.0/S.
Line 12 shows that Sudan has a comparative advantage in the production of long-staple
cotton, wheat and goundnuts. It does not have a comparative advantage in the
production of medium-staple cotton and sorghum. These results are sensitive to world
prices, yield and exchange rate assumptions. .

Medium-staple cotton profitability analysis shows that the crop was profitable in
1986/87 LS 28, unprofitable in 1987/88 (LS -212) and 1988/89 (LS -341) at the shadow
exchange rate. In 1987 / 88, the procurement price was 42 percent above production costs
and exceeded the border-equivalent price by 75 percent, and revenue-equivalent price by
48 percent. The analysis indicates that at the shadow exchange rate of LS 9/$ the
border-equivalent price will increase to LS 357 per Kantar in 1988/89. This represents 93
percent of production costs. The domestic resource cost ratio (0.63) indicates that Sudan
was close to having a comparative advantage in the production of medium-staple cotton.

The profitability of long-staple cotton valuing revenue at border-equivalent prices
at shadow exchange rates, varied from positive LS 639 in 1984 / 85 to negative LS (-426)

the next year, a recovery to L8 69 in 1986/87 and a sizable increase to LS 176 in 1988/89.

104

The variations in profitability can be attributed to l) fluctuations in world lint prices; 2)
yield; and 3) exchange rate.

In 1988/9 crop yields and world prices increased while exchange rates fell. The
procurement price which is the price the tenant receives set by the government, has been
higher than production costs and has exceeded the border-equivalent price. In 1988/89
the procurement price was 45 percent above production costs, even though these costs
include a 10 percent return to management and a 10 percent return on capital. It was also
31 percent geater than border-equivalent price which is all the revenue the government
receives on the lint sales and the domestic sales of cottonseed. Table 6.4 shows that the
domestic resource cost ratio for long-staple cotton has been less than one since 1984/85
except for the drought season 1985/86 when it climbed to 4.98. The domestic resource
cost ratio of 0.77 for the year 1988/89 has been calculated using a shadow exchange rate
of LS 9.0/S. At this shadow exchange rate the supply and demand for foreign exchange is
less imbalanced than at the official exchange rate of LS 4.5/S. The border-equivalent
price declined to 23 percent of production costs.

Wheat production has been profitable in the Gezira since the 1986/87 season with
production valued at the import parity price for wheat using shadow exchange rates. The
domestic resource cost ratio were 0.60 in 1986/87, 0.73 in 1987/88 and 0.52 in 1988/89.
The procurement price increased by 30 percent from LS 770 in 1986/ 87 to LS 1,001 per
metric ton in 1987 / 88. This represents 145 percent of production costs and exceeds the
border-equivalent price by 17 percent. If tenants had received the border-equivalent price
of LS 858 per metric ton, this would have exceeded production costs by 25 percent and
represented an 11 percent increase over the 1986 / 87 procurement price. Profit per feddan

has increased from L8 82 in 1986/87 to L8 263 in 1988/89. The domestic resource cost

105
ratio at LS 9.0/S declined to 0.52 in 1988/89 indicating that Sudan has a comparative

advantage in wheat production as an import substitute at the shadow exchange rate. The
border-equivalent price is 35 percent geater than production costs [LS 2,027/ Mt versus
LS 1,501/Mt], (Jansen, 1989).

Under irrigation conditions at the Gezira in 1988/89 groundnuts had a domestic
resource cost ratio of 0.76 indicating that it is economically profitable, showing a
significant improvement from the 1987/88 cropping season that had a domestic resource
cost ratio of 1.26 which indicates comparative disadvantage. The improvement can be
attributed to the higher world price and a favorable exchange rate. Production costs rose
from LS 431 per feddan in the 1987/88 cropping season to L8 913 per feddan in 1988/89
and profitability improved from L8 -l48 per feddan in 1987/88 to LS 257 per feddan in
1988/89. The border-equivalent price was 83 percent geater than the production costs
[LS 2,784/Mt versus LS 1,521 / Mt].

Sorghum prices have increased only slightly from $105 in 1986/ 87 to $115 in

1988/89. Productioncosts rose from LS 184 per feddan to LS 591 per feddan. Profitability

   

TABLE 6.4 DOMESTIC RESOURCE COST RATIOS FOR GEZIRA CROPS.

 

 

 

 

 

 

 

 

 

 

 

 

 

CROP \ PERIOD 1984/85 1985/86 1986/87 1987/88 1988/89
Exchange rate (LS/S) 2.50 2.50 3.25 4.5 9.00
Cotton MS --- --- 0.98 1.17 1.09
Cotton LS 0.32 4.98 0.93 0.89 0.77
Wheat --- 1.82 0.60 0.73 0.52
Groundnuts 0.17 0.21 0.42 1.26 0.76
Sorghum 0.52 0.64 1.10 3.33 2.18

 

 

 

 

106

fell from LS 25 per feddan to negative LS (271) per feddan. Domestic resource cost
ratios for sorghum produced in the Gezira are 0.52 in 1984/85, 0.64 in 1985/86, 1.10 in
1986/87, 3.33 in 1987/88 and 2.18 in 1988/89. Sudan does not have the comparative
advantage in the production of sorghum for export even at the shadow exchange rate of
LS 9/$. The domestic resource ratios are extremely high especially for the 1987/89
season. The import parity price at $155 per metric ton, cif, Port Sudan, is higher than
the fob export parity price of $115. Yields and world prices reveal that sorghum is not an
efficient crop to be gown under irrigated conditions but could be a viable crop under

the mechanized conditions at Gedarif.

6.4 DOMESTIC RESOURCE COST RATIOS.

Financial analysis of Sudan’s major crops utilizes the criterion of financial
profitability and attempts to determine the relative and absolute financial profitability of
crops. The assumption is that farmers are interested in profit maximization and would
therefore allocate their resources to the crops with the highest positive financial
profitability. The government can encourage the production of a crop by increasing its
producer price or subsidizing its costs of production.

Economic analysis utilizes the criterion of economic profitability. The government
objectives of economic efficiency, regional balance and self-sufficiency can be analyzed by
calculating the losses in economic efficiency that would be incurred in reaching the
various levels of improvements. This approach allows the assessment of tradeoffs of the
promotion of conflicting goals such as economic gowth, food production and equity.

Economic valuations measure inputs and outputs by assigning them prices that

reflect underlying scarcity values or opportunity costs. These prices will result in

107

optimum allocation of scarce resources and thereby maximize efficiency and generate
highest attainable level of national income. The primary task is to find reasonably
accurate approximation of the economic prices of inputs and outputs in the system. The
logic is that Sudan government officials always have the option of setting policy that will
permit more imports or exports at world price levels. World prices provide relevant
standard of comparison and establish economic valuation for tradable inputs and outputs.

Domestic factors of production--land, labor and capital--are evaluated with
respect to opportunity costs for each factor which is the amount of national income
foregone by removing a unit of that factor from working in its best alternative activity.
The opportunity cost of each factor is a measure of scarcity because it shows the cost to
society of utilizing the factor in one activity rather than another. Nontradable inputs such
as government services or road transport cannot be evaluated by making comparisons to
the cost of traded goods, since by definition they do not enter into international
commerce. Their costs have to be disaggegated into their tradable inputs and domestic
factor costs (Jansen, 1986).

A modified version of the domestic resource cost ratio equation developed in
section 6.1 was employed in the calculation of domestic resource cost ratios for all crops
gown in the Gezira for the 1989/90 cropping season. The modification is to account for
domestic and traded portions of transport costs from the Gezira to Port Sudan. The
necessary information includes border prices, and other data obtained from the survey:
production costs, yields and transport costs for cotton, wheat, goundnuts and sorghum.

There are three important steps in the calculation of domestic resource cost
ratios: 1) the development of enterprise budgets for each alternative production

enterprise that competes for the same resources; 2) classification of inputs into traded

 

108

goods that are traded or potentially traded internationally and non-tradable goods that
are not traded; and 3) determination of import or export parity prices intended to reflect
true economic value of goods and services in the absence of government distortions
(Morris, 1988).

Table 6.5 shows the border prices in dollars per unit, efficient marketing margins
and producer parity prices in Sudanese pounds per unit. We calculate export parity
prices for medium-staple cotton, long-staple cotton, goundnuts and sorghum, and an
import parity price for wheat. The border prices quoted in dollars are converted into
Sudanese pounds using the shadow exchange rate of LS 12/$. Except for wheat, the
percentages for the efficient marketing margins were adopted from Youngblood (1983)
based on Sattar ( 1982) who determined these margins using the differences between the
border and producer prices.

For wheat, the marketing margin was estimated from information on transport
and marketing costs and prices contained in Jansen (1987). The fixed percentage
efficient marketing margins are: medium-staple cotton 40 percent, long-staple cotton 35
percent, wheat 30 percent, goundnuts 35 percent and sorghum 43 percent. Youngblood
(1983) also calculated the percentages of the tradable components for each of the crop
inputs used in production at the Gezira Scheme.

The value of domestic resources, value of traded inputs and yields are taken from
the crop enterprise budgets developed from the 1989/90 farm survey. The calculation of
domestic resource cost ratios requires that input costs be decomposed into their traded
and nontraded components. Any input that can be exported or imported is considered
tradable. Table 6.6 presents the values of total, domestic and tradable components of the

input costs for the different crops gown in the Gezira.

109

 

TABLE 6.5 BORDER AND PRODUCER PARITY PRICES, 1989/90.

 

 

 

 

 

 

 

CROP PRICE BORDER PRICES MARKET MARGIN PROD PRICES
UNIT 1/ (3) (LS) (%) 2/ (15) (L8)

Cotton MS 62.10 745.20 40 298.08 447.12

Cotton LS 92.22 1,046.64 35 366.32 680.32

Wheat 190.00 2,280 30 3 / 684.00 1,596.00
Groundnuts 220.00 2,640 35 924.00 1,716.00
Sorghum 113.00 1,356 43 583.30 772.92

 

 

 

 

 

 

1/ LS/Mt = wheat, goundnuts and sorghum. Cotton = LS/Kantar.

 

2/ Efficient marketing margin in Youngblood, 1983.

 

3/ Marketing and transport costs in Jansen, 1987.

 

 

 

Source: Compiled from survey data.

TABLE 6.6 DOMESTIC AND TRADED COST COMPONENTS, 1989/90.

 

 

 

 

 

 

 

 

CROP\COST TOTAL COST DOMESTIC COST TRADED COST
UNIT (LS/Fed) (LS/Fed) (LS/Fed) ($/ Fed)
Cotton MS 2,345 1,639 706 58
Cotton LS 2,404 1,620 784 65
Wheat 857 503 354 30
Groundnuts 832 702 130 11
Sorghum 689 581 108 9

 

 

 

 

 

Source: Compiled from survey data.

 

 

 

 

The DRC ratio is the ratio of domestic factor costs to the net foreign exchange
earnings or savings. The numerator is the domestic factor costs and the denonninator is

the international value added (traded outputs minus traded inputs) in Sudanese pounds.

110

The DRC ratio is calculated as follows: domestic production costs plus domestic
transport costs incurred minus domestic transport costs saved divided by revenue per
feddan minus tradable production cost minus tradable transport cost incurred plus
tradable transport costs saved.

Table 6.7 presents the domestic resource cost ratios for medium and long-staple
the cotton gown in the Gezira in 1989/90 survey season using a shadow exchange rate

of LS 12/$. The domestic resource cost ratios for medium and long-staple cotton are

 

0.49 and 0.48, respectively. Sudan therefore has comparative advantage in the production

of medium and long-staple cotton for export.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TABLE 6.7 DOMESTIC RESOURCE COST RATIOS FOR COTTON, 1989/ 90.
Unit COTTON MS COTTON LS

Exchange rate LS/$ 12.00 12.00

1 Fob World price $ / Kan 62.1 92.22

2 Yield Kan/Fed 6.80 4.50

3 Total Production cost LS/Fed 2,345 2,404

4 Production cOst ( 1 /Domestic) LS/Fed 1,639 1,620

5 Production cost ( l/Traded) LS / Fed 706 784

6 Ginning Cost (Domestic) LS/ Fed 261.12 213.12

7 Ginning Cost (Traded) LS/Fed 391.68 319.68

8 Transport cost (Domestic) 3 / LS/Fed 23.08 15.27

9 Transport cost (Traded) LS/ Fed 53.86 35.64

10 DRC Ratio 0.49 0.48

1/ = Domestic cost component in Sudanese pounds per feddan.

2/ = Traded cost component in Sudanese pounds per feddan.

3 / = Transport cost, Gezira to Port Sudan

Source: Computed from survey data.

 

 

 

111

Table 6.8 presents the DRC ratios for wheat, goundnuts and sorghum gown in
the Gezira in the 1989/90 survey season using a shadow exchange rate of LS 12/$.
Wheat is valued as an import substitute, and goundnuts and sorghum as exports. The
DRC for wheat is 0.32 indicating a clear comparative advantage for wheat gown in the
Gezira. The DRC for goundnuts is 0.53. Sudan has comparative advantage in

goundnuts production, but its export potential remains underutilized because tenants

TABL .8 DOMESTI RE COST RATIOS 989
Unit GROUNDNUTS SORGHUM
LS 12.00 12.00
F ' 113
Yi 1
Total Production cost
Production cost 2 domestic
ion cost 3 tr
1 Domestic 4
Handli Traded
T cost Domestic 5
Tr
T i 6
T cost Traded
DRC ratio
i
i F
T cost ' Feddan.

Handli s.

 

112

lack funds, production inputs, research and extension, infrastructure and marketing
services.

The domestic resource cost ratio for sorghum is 1.70 indicating that Sudan has a
comparative disadvantage in the production of sorghum in the Gezira for export under
current yields and world prices. Thus, the cost of the resources used in the production of
sorghum are more than the foreign exchange saved and hence it is not an efficient use of
the resources to produce the crop for export. Nonetheless, Gezira tenants will continue
gowing sorghum to ensure their food security.

The 1989/90 domestic resource cost findings are comparable to Jansen’s 1988/ 89
findings presented in table 6.4 where long-staple cotton, wheat and goundnuts have
comparative advantage and medium-staple cotton and sorghum have comparative
disadvantage, except for medium-staple cotton that now shows a strong comparative
advantage.

Domestic resource cost ratios are sensitive to changes in exchange rates, world
prices, production costs and yields. Exchange rates determine the prices of imported
imputs and agiculture products. The effects of changes in the exchange rate are
important when the uses of the tradable inputs vary significantly across enterprises and
when the production technology includes nontradable versus tradables commodities. A
change in the world reference prices of an output will have a geat effect on the
economic profitability of an enterprise. Because economic prices are based on long term
trends in world reference prices that may not provide accurate projections of future
prices, the expected long term world prices can be distorted due to subsidies by exporting
countries and it is important therefore to know whether the subsidies will continue into

the future. Production techniques will change with the introduction of improved

 

113

technologies that lower costs of production and increase enterprise profitability to the
farmer and to the nation. The production of a crop may not be efficient under current
technology but may be efficient with the introduction or development of new tecnology.
Agicultural research is a long term process and decisions on research resource
allocation must take a long-term perspective on the policy environment. Comparative
advantage rankings tend to be sensitive to the level of yields assumed for any given
quantity of inputs to the extent that any success in raising mean yields above current
levels can make enterprises that appear economically unprofitable at present to become
profitable in the future.

Changes in exchange rates, world prices, production costs and crop yields are
important policy variables. Some of these factors are under the control of the policy
makers while others are not. Real exchange rates and world prices are exogenous and
cannot be considered as policy instruments because Sudan is a price taker except for
long-staple cotton. Maintenance of an overvalued domestic currency imposes an implicit
tax on producers. The effects of the exchange rate would have implications for resource
allocation in the Gezira. Producer prices are policy instruments available to policy
makers. Policies that cause the producers to diverge from the import or export parity
equivalent could have significant impact on the tenants. Policy makers can formulate
reasonable expectations about the potential effects of their actions. The total effect of
these policies discriminates against or favors some commodities or farmers in some ways
such that the profitability of a particular crop or technology to the farmer bears little
relationship to the profitability to the country. This may be the case with goundnut

production in the Gezira Scheme.

CHAPTER VII

LINEAR PROGRAMMING MODEL FOR THE GEZIRA

This chapter introduces and discusses the structure of the linear progamming
models used to analyze the economic activities of the survey tenants. The issues to be
discussed include an overview of the linear progamming model, mathematical
representation, limitations of the model, the objective function, the production activities,

model restrictions, and the derivation of the righthand side (RHS) values.

7.1 OVERVIEW

The last two decades have seen an improvement in the incorporation of economic
theory and observed institutional and economic reality into the progamming models of
consumer demand, market equilibrium in both factor and product markets, risk and risk
aversion, and the role of economic instruments. The ability of agicultural economists to
model decisions of the farm households has undergone much improvement. The
cumulative effect of these advances has been to provide analytical tools more adaptable
to different situations and realistic portrayal of the agicultural situations. Flaming
models have to link economic theory to data as well as provide practical appreciation of
problems and policy orientations. Their logical consistence frameworks do provide
analysts and policy makers with valuable economic representation in order to test ideas
and proposals. Thus, model construction requires a gasp of the relevant economic
theory, an understanding of the issues and a familiarity with sound techniques of model

building and their applications (Hazell and Norton, 1986).

114 '

 

115

The appropriateness of the use of linear progamming for the analysis of
smallholder agiculture has been questioned. The linear progamming model operates
under the assumption that the producer wants to maximize a particular objective
function, but social and economic variables can be inseparable in smallholder agiculture
in the less developed countries. The usefulness of the model will be limited when the
objectives are non-economic.

Palmer-Jones (1977) questions the legitimacy of using average input-output
coefficients in linear progamming models for several reasons: 1) farmers may alter their
strategies or technical inputs under different environmental conditions; and 2) the
assumption of average inputs may not give rise to average outputs. He questions the
application of linear progamming to smallholder farmers in general, particularly with
regard to data problems since records are rarely kept. Even when recorded, their degee
of reliability is normally low.

Lipton (1968) argues that for peasant farmers, the most important consideration
is food security. Low (1974) supports the use of linear progamnning in smallholder
agiculture. He argues that linear progamming models when carefully formulated are
able to generate useful information that could not have been obtained by the usual
budgeting techniques. Linear progamming permits a more rapid analysis in determining
the relative profitability of enterprises when the number of enterprises under
consideration is large.

A model is a functional account of relationship between relevant variables which
will be given cardinal values in the empirical phase of the study. It is an abstraction
describing and duplicating the situation under investigation. Many linear progamnning

models assume a profit maximizing behavior, single period planning and a certain

 

116

environment. Linear progamming is preferred because of its widespread availability,
familiarity and cost effectiveness. It has the ability to choose the best set of a very large
number of alternatives, and the marginal evaluation of constraining resources makes it
ideal for an agicultural setting.

In agiculture, decisions on what to produce, how to produce it, and what to do
with the produce are made by many farmers. By using indirect instruments that involve
changes in prices and subsidies or incentives, we can make changes in the farmer’s
objective functions to get them to adopt cropping patterns and resource use patterns
more to the public good. Agiculture models need thorough specification of the
production possibilities, full understanding of what motivates farmers and the constraints
of their motivation. Farmers need to have the flexibility in choosing the crops they gow,
timing of the gowing and the type of land use.

The use of a linear progamming model for the Gezira is appropriate since the
tenants gow for the market, their main goals appear to be profit maximization and food
security, and the data are fairly reliable. This study uses a linear progamming model to
determine the optimal mix of production activities. The model seeks to maximize the
farmer’s net income subject to food security constraints.

Sensitivity analysis of the Gezira model will be employed to investigate the

following issues of importance.

1. The impact of government mandated cropping pattern on the tenant’s income.
2. The impact of improved technology on resource mix, product mix and farm
income.
3. The impact of irrigation water on productivity.

4. The effect of increasing producer prices.

117

5. The effect on farm income of making formal credit available.

7.2 MATHEMATICAL REPRESENTATION

Linear progamming uses a mathematical model to describe the resource
allocation problem in agiculture. All the mathematical functions in the model are
required to be linear. Non linear problems can be handled by separable or quadratic

progamming. The word progamming is essentially a synonym for planning. Thus, linear

 

progamming involves the selection of activities to obtain optimal plans. A typical linear
progamming problem contains more variables )9 than will appear in the optimal
solution.

The mathematical formulation of an linear progamming model has three main
features: 1) an objective function to be maximized or minimized; 2) resource constraints;
and 3) the activity set.

The linear progamming problem is stated as follows:

Maximize: Z = CIX1 + CZX2 + ----- + Can

Subject to the restrictions:-

aux, + aux, + ------- + ainxn _<_ b1

aux, + a22X2 + ------- + aux“ _<_ b2

annlxl + Putzxz + """" + aman-Sbn
X1_>_0 n=1,2,----,n.

Alternatively:

n
Maximize: j—Zl Z = Cij

Such that: n
2 ainj i bl i: 1, “", m
i=1

118
szo j=ln""nn

where:
Z = objective function to be maximized or minimized
C = n x 1 vector of prices
X = n x 1 vector of activity levels
a = m x n matrix of input-output coefficients
b = m x 1 vector of resource constraints

Each column of the tableau defines an activity with its respective input-output
coefficients. Each row represents a restriction. A negative coefficient signifies an addition

to the resource while a positive coefficient indicates a demand on the resource.

7.3 ASSUMPTIONS OF LINEAR PROGRAMMING

Linear progamming has a rigid set of assumptions that can constrain the
applicability of the model results. A review of the main linear progamming assumptions
are given below:

1. W: This means that if X units of inputs are necessary to produce
one unit of output, then 2X units of input will be needed to produce two units of
output and that the fixed input-output ratio holds for the entire production range.
A constant goss margin for a unit of activity assumes a perfectly elastic demand
curve for the product, and a perfectly elastic supply of any variable input that
may be used.

2. Additiyjm: It is assumed that there are no interactions between activities. Its
requirement is that given the activity levels (X1, X2, X3, ---, X“), the total usage of
each resource and the resulting total output equal the sum of the correspOnding

input and output quantities generated by each activity conducted separately.

 

3.

7.4

119

Divisibilig: It is assumed that resources can be used and activities produced in
quantities that are fractional units. This may not be limiting as the non-integer
values that appear in the solution can be rounded off to the nearest integer.
Detggnigistig: This assumes that all the parameters in the model such as the
input-output coefficients (Aij), the resource levels (B), the righthand side (RHS),
yields, and input and output prices are known with certainty. But linear
progamming models are formulated to predict some future course of action
which inevitably involves uncertainty.

mm: It is assumed that all units of the same resource or activity are
identical but this may not be true in practice.

W: It is assumed that the level of activities and the resource levels is

geater than or equal to zero.

OBJECTIVE FUNCTION

The objective function maximizes net income from the farm activities subject to

securing the minimum requirement of sorghum for food security, and subject to other

physical and institutional constraints. The numbers in the objective function represent

returns to all variable inputs except for the cost of hired labor represented by negative

numbers in the tableau. Net income is defined as goss income from farm enterprises

less operating expenses. Gross farm income is derived from the sale of cotton, wheat,

goundnuts and sorghum. The cash expenditures were on 1) material inputs -- seeds,

fertilizers, insecticides, herbicides and sacks; 2) mechanical operations -- plowing, ridging,

levelling and opening irrigation canals; and 3) transport services and water rates. Family

 

120

labor and local food consumption have not been assigned values in the objective
function.

The combination of enterprises to be selected will depend on the objective
function. If we maximize this function we can find the combination of activity levels
which gets the maximum profit given the resources available to the farm. In the face of
risk, a minimum level of subsistence consumption can be assured by the consumption of
lower bounds on the level of foodstuff production function; this applies to local sorghum

in the Gezira.

7.5 ACTIVITIES IN THE MODEL
Activities in the model fall under the following categories:
1. Crop production activities
2. Labor hiring activities
3. Irrigation water activities
4. Capital flow activities
5. Crop selling activities
6. Sorghum buying activities
7. Capital transfer activities
7.5.1 W
The cropping activities in the Gezira model include medium-staple cotton
(shambat), long staple-cotton (Barakat), wheat, goundnuts, local sorghum and hybrid
sorghum variety (Hageen dura 1). Good cotton farmers are allowed to gow some

vegetables (tomatoes, cucumbers, eggplants, pepper) on a small amount of the land

under fallow.

121

TABLE 7.1 CROP PRODUCTION ACTIVITIES.
A1 A2 A3

ACTIVITY a) FALL MSCI MSCZ

ROH RES UNIT 0 -1162 -I389

LANT Fd I 1 I

LANF 1

LANC

LANU

LAGS

JUNL

JULL

AUGL

UGVOU‘UNH

 

hoe-o
HO

ye
N
OUGOH‘UOH

Dame-HNGVNH
DNOUIOUIHOUI
oumoHNmuut-o
OVONmmo-omu
quOVI-num
OuiOOHDUIOa-o
Ult-‘OOVo-nuon
OUOOHOuOs-a
ungouuum
Ouanbea-n
uHQQVHNO

a-aa-I
(I.

e-e
O
NOUHOVHU.&\40

NNUNNUa-ouungtuu
N0“U‘VHU..VO
NUOOOUHHUIDNH
nuuoouuuuuuo
NNUNVQHHubNe-I
NOuUqu-Uhfiwn
NUOOOUHHUIDNH

”HO-0H
000V
0 b
8 N
O
O b
8 N
0
‘
N
O

a»
8

agggggggggrzzarrrz55582222

N
O

PLSC
PUHT
pour
PLSO
PHSO -1600
uses
JUNC
JULC
auoc
sepc
ocrc
uovc
occc
JANC
FEBC
MARC
apnc
MAYC
cuoc
anon Ls

on up on on N

ha h) an O 0
RRRX
noon

U
.

66
9

S 78 8: t 13 IS .3 .8 i3 13 23 81 8
5; i; i; i; i; i; l; I; i; i; i; l; i; if

a) See appendix C for explanation of abbreviations

Source: Computed from data.

 

122

A cropping activity is a single variable in a linear progam representing the level
at which a given crop is cultivated. We define the cropping activity on a per feddan basis
which is the way farmers make their production decisions and is a unit of data collection.
Table 7.1 shows the crop production activities, each of which has two intensity levels.
Yield assumptions for the intensity levels 1 are averages for five years 1984/85-1988/89
(Socioeconomic Unit, 1989) and yield assumptions for intensity levels 2 are based on
Gezira Research Station field trial results where 20 percent was deducted from trial yield
in order to arrive at potential yield increase following improvements in technology
embodied in better management of land preparation, irrigation and fertilizer application
(Brandt et al., 1987). The costs related to yield (transport, sacks and threshing), will rise
proportionately.The Board supplies fertilizer for the production of cotton, wheat and
hybrid sorghum variety.

The input-output coefficients represent the resource requirements per units of
activities that correspond to production activities. The level of activity times the input
coefficient gives the derived demand by the activity and the sum of derived demands for
all crops must not exceed the righthand side.

The input-output coefficients show the magnitude a resource level would decrease
with an increase of one unit of each activity in the model. The coefficients representing a
decrease in the magnitude of a constraint carry positive signs, while those coefficients
indicating an increase in the magnitude of the constraint have negative signs. The input-
output coefficients of crop production activities are derived from the survey data of 96
farmers in the main Gezira. These coefficients were estimated for the typical 20-feddan
main Gezira tenancy for inclusion in the production enterprise model. Crop yields were

estimated for each enterprise per feddan.

I ::-\._ ~ A]

123
7.5-2 W

Tenants in the Gezira are dependent on hired labor for most farm operations.
Labor hiring takes place throughout the season with the highest level of labor hiring
during the peak periods. The activity units are man-days (Md); each man-day is
equivalent to eight hours of fieldwork per day in a 6-day work week. When a laborer
performs a farm operation that takes him/her less than the standard eight hours, we
count it as a man-day equivalent. The survey reveals that the majority of the laborers are
adult males and females that participate in weeding and harvesting. Although women
were slower than men in farm operations like irrigation and land clearing; the opposite is
true for harvesting and cotton picking. We will therefore assume that a man-day is
equivalent to a woman-day.

The monthly labor requirement corresponds with the monthly pattern of land use.
The extent to which critical operations are performed in a given time span needs to be
taken into consideration. We do this by mapping the different tasks into months in which
they occur given the time dimension. Labor has to be disaggegated over the year
because its opportunity cost changes so drastically over the course of the production
season. Monthly disaggregation of Gezira labor requirements will suffice as the schedule
is not tight and timing flexible under the irrigation conditions. The labor input-output
coefficients are positive in units of man-days per feddan per month.

No labor selling activity was established for the farm since each tenancy is a net
buyer of labor especially at the peak periods. The model defines 12 labor buying activities
to allow for the purchase of labor that will augnent family labor. Each cycle covers four

weeks for one production season; June 1989 to May 1990.

4441

124

Labor is hired per feddan and remunerated both in cash and in-kind in the form
of sorghum. An average monthly wage rate was estimated by combining the value of the
cash and in-kind payments.

Table 7.2 shows that labor hiring activities have negative values on the objective
function row equal to the average wage rate in the particular month. Thus, a hired unit

of labor reduces the objective function by the amount of the monthly wage. .Wage rates

Source: Computed from survey data

 

125

vary with the type of activity, month and timing of the different operations. Family and
hired labor activities are specified for the 12 labor periods covering the entire 1989/90
cropping season.
7.5.3 W

The economics of irrigation focuses on the water demanded at the farm level and
the price charged for water deliveries. However, water may not be available to the
farmer on demand and the charge may be a flat rate independent of water use. Water
deliveries are constrained by canal capacity and loss characteristics; and water available
from nature and from storage in reservoirs.

Irrigation water is the single most important resource in the Gezira scheme.
Table 7.3 shows crop water (Cbm) requirements specified by crop and month. Water is
brought to the crops at a fourteen day interval at a rate of 420 cubic meters per feddan
per irrigation. The Agicultural Research Corporation recommends that cotton receive 16
irrigations, wheat 10 irrigations, goundnuts 8 irrigations and sorghum 4 irrigations.
Rainfall in August to October supplements the irrigation water for goundnuts and
sorghum. Gezira tenants have to pay flat land and water rates to the government which
in the 1989/90 cropping season stood at cotton (LS 157), wheat (LS 131), goundnuts (LS
104), sorghum (LS 104) and vegetables (LS 175). Water shortages occur in October and
November. The total water use on the farm is constrained by an accounting equation
with an upper bound on total water use.
7-5-4 W

Farmers require operating capital from various sources such as savings, relatives,
banks and government to hire labor, purchase seed and meet consumption requirements.

Table 7.4 shows capital borrowing activities specified on monthly basis at a 20 percent

126

Source: Ministry of Irrigation.

Source: Compiled from survey data.

 

127

interest rate which is the rate the Agicultural Bank of the Sudan charges its customers.
The activity unit is a Sudanese pound. The farmers borrow from money lenders and
friends to supplement their personal cash to finance farming. Borrowed capital activities
carry negative coefficients in the operating row to indicate the use of borrowed capital.

The objective function coefficient (Cj’s) for borrowed capital are negative,
indicating a decrease in the objective function by the interest rate paid on capital.

The model employs the actual amounts spent on crop production estimated from
the survey data. The expenses involved typical inputs in the tenancy such as planting
material, mechanical operations, transport, services and land and water rates. The
operating capital constraint for the cropping activities was entered on monthly basis. The
demand for operating capital by the various enterprises was assumed to vary with
variable costs per unit of production. The total annual Operating capital was cotton (IS
2,345), wheat (LS 889), goundnuts (LS 832) and sorghum (LS 689) Sudanese pounds
per feddan.

75.5 W

Table 7.5 shows crop selling activities in the model that include medium staple-
cotton, long-staple cotton, wheat, goundnuts, local sorghum and hybrid sorghum
varieties. Local sorghum is included such that any surplus beyond subsistence
requirements can be sold. The Gezira model assumes that all the selling is done at
harvest and that there is no storage. Prices are those observed during the 1989 / 90 survey
season. Cotton and wheat prices are set by the government and sold through official
channels immediately after harvest. The selling units are "Kantar' for cotton and Kg for
wheat, goundnuts and sorghum. Sack weights of different crops are cotton = Kantar (45

kg), wheat = 90 kg, goundnuts = 45 kg and sorghum = 90 kg.

128

T 7.5 L1 BUYING AND CONSUMPTION ACT VITIES.
OB FUNC SELLING ACTIVITIES
ACTIVITY A26 A27 A28

SC

x C for lana ion

Source: Computed from survey data.

 

The objective coefficients are positive because selling adds to the value of the
objective function. The selling price coefficient appear negative in the operating capital
rows because crop selling adds to the operating capital.

7.5.6 W

A sorghum buying activity is added into the model in case sorghum production
cannot meet the minimum household subsistence requirements. This introduces the
possibility that it may be more economic to buy sorghum from outside than to produce it
in the Gezira. Sorghum purchase is valued at market prices. The sorghum buying activity
has a coefficient of -l at the local sorghum production row indicating an increase of
inventory by a unit. The objective function is -3.5 which implies a purchase price of
sorghum which is 20 percent above the sales price. The reason being that farmers

purchase sorghum well after harvest when prices are much higher.

129
7.5-7 9W

Table 7.6 represents capital transfer activities which are used to pass surplus
capital from one month to another during the year. The transfer activities have a zero
value in the objective function, and negative and positive values in the operating capital
rows to transfer any capital surplus to the next month. Capital estimated from sales
receipts is introduced into the model in June and is allowed to be transferred from one
month to the next with the condition that at the end of the year the same or geater

amount of capital can be transfered to the next year.

TABLE 7.6 TRANSFER ACTIVITIES

(c1) TRANSFER ACTIVITIES
A34 A35 A36 A37 A38 A39 A40 A41 A42
acrrvnrv JNK‘I’ 01.1w AGKT spxr orxr uvxr osxr JAKT rain
snow ass 0 o o o o o o
34 JUNC LS
35 JULC LS
36 AUGC LS
37 LS
3a LS
39 LS
4o LS
4: L5
42 LS
43 mac LS
44 APRC LS
45 MAYC LS
4e suoc LS

47 RPBH LS

a) See appendix C for explanation of abbreviation

Source: led from data

 

130
7.6 MODEL RESTRICTIONS

This section discusses the structure of the model restrictions. The Gezira tenant
operates under the constraints of land, hired labor, water, operating capital and
minimum sorghum consumption.

76.1 W

The total available land for cultivation is limited by the size of the tenancy and
the mandated cropping pattern. The typical farm size is 20 feddans. The tenants are not
allowed to buy, rent or sell land. The tenancy is assumed to be homogeneous with no
distinction in physical characteristics allowed in the model. The land rows represent all
the available land allocated to production of cotton, wheat, goundnuts and sorghum.
7.62 W

Both family and hired labor supply the labor demands of the production
activities. Hired labor is valued at market prices. Family labor is not mobile and is not
valued in monetary terms. The row unit for hired labor is one man-day. The amount of
hired labor is constrained by the amount of operating capital available for the activities.
The monthly pattern of labor requirements corresponds to monthly pattern of land use.
The cropping activities need not account, and seldom do account for all of the labor
requirements on the tenancy because of off-farm activities.

7.63 W

The total water allocation to the Gezira tenant is fixed on an annual basis. The
fixed monthly water deliveries to the individual farmer are constrained by canal capacity,
and the water is available to the farmer at a flat annual charge. The water constraint

indicates the water requirements per crop per period and the total demand will not

exceed the available water per month.

131
7.6.4 OEEflTING CAPITAL CONSTRAINTS

All the farm operations need cash especially weeding and harvesting. The Board
bears the cost of production for cotton and wheat. The tenant bears the total cost of
production for goundnuts and sorghum from his own sources.

A set of capital constraints insure that capital needs for crop production is
limited by the availability of capital. The amount of funds available for cash expenses on
the Gezira model farm was the total amount spent on crop production activities for the
1989/90 cropping season. All the unused operating capital made available is transferred
from one month to the next.

7.6.5 MINIMUM SORGHUM CONSUMEIION CONSTRAINT:

The tenant has to secure the minimum sorghum subsistence requirement from his
own production. The food security constraint was represented by a coefficient that
corresponds with a minimum yield per unit of local sorghum activity and a righthand side
of 1,180 kg representing the minimum subsistence requirement. This is a lower bound
constraint in the production of sorghum. This constraint was incorporated into the
model to force the production of minimum amounts of sorghum for family consumption
that will be met in the feasible solution; the selling activity can only dispose of surplus

production of sorghum.

7.7 DERIVATION OF THE RIGHTHAND SIDE VALUES
This section discusses the derivation of the righthand side values in the Gezira

model.

132
7.7.1 AVAILABLE L__A_ND

The standard tenancy size in the Gezira is 20 feddans in a single field. The survey
reveals that 80 percent of the tenants possess the standard tenancy size. The Board’s
policy limits the available land for each crop to the area specified by the rotation pattern.
772 AW

Collinson (1983) asserts that both labor availability and use need to be treated as
flows which are only meaningful at a point in time. The usual techniques tend to assume
a theoretical level of availability as a constant constraint on the observed usage at peak

periods can be accepted as a limit throughout the season. This study employs the

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

llITABLE 7.7 FAMILY AND HIRED LABOR IN MAN-DAYS PER FEDDAN.
PERIOD \ DEMAND FAMILY HIRED
June 15 35
July 15 35
August 15 35
September 15 35
October 15 35
November 15 35
December 15 35
January 25 90
February 25 90
March 25 90
April 15 35
May 15 35
TOTAL 210 585
Source: Compiled from survey data.

 

 

 

133

technique of observed labor usage at peak periods as a limit for the seasonal available
labor.

Factors affecting labor availability include age, number of hours on a working day
and the time spent on off-farm work. Family labor participation in the Gezira is low
because children go to school and ”Arab" culture secludes family women from fieldwork.
Much of the work is done by adult males. Table 7.7 shows that 15 man-days of family
labor are available for farm work per month. The family labor is augnented by about 35
man-days of hired labor that rises to 90 man-days per month during cotton picking in

January, February and March following the arrival of cotton picking labor from western

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sudan.
TABLE 7.8 MONTHLY WATER TO A 20-FEDDAN TENANCY.
PERIOD CUBIC METERS
June 3,700
July 6,600
August 7,300
September 7,300
October 7,800
November 7,300.
December 6,900
Janaury 5,200
February 4,100
March 2,100
April 800
May 1,700
TOTAL 60,800
Source: Computed from Ministry of Irrigiion records.

 

 

 

134

77.3 W

The amount of water available to a Gezira model farm is 60,800 cubic meters per
annum. The available water was computed from the actual amount of water flowing from
the Roseires Dam through the two main canals to the tenants field’s less 8 percent to
account for losses to evapotranspiration on transit. Table 7.8 shows the monthly
specification of available water by month for the 1989/90 cropping season.
7-7-4 AW

The available operating capital for a Gezira model farm was estimated from the
monthly cash expenditures on inputs and hired labor for the 1989/90 cropping season.
The total cash expenses by the standard tenancy amounted to about LS 7,150 which is
rather a conservative estimate of capital availability.
7.7.5 W

The 1,180 Kg of family local sorghum requirement per season was estimated from
the survey data with an average household of 7.3 persons and each member consumes
145 Kg per year. Thus, a minimum of 1.6 feddans has to be allocated to local sorghum

production in order to cater for the family food security needs.

 

CHAPTER VIII

RESULTS OF THE LINEAR PROGRAMMING ANALYSIS

The structure of the linear progamming model used in this study was described
in Chapter VII. This Chapter presents the results of the linear progamming analysis.
The discussion focuses on changes in cropping pattern, resource use, resource
productivity and farm income. It also includes a discussion of the important economic
efficiency measures that are associated with the improvements in cultural practices and
resource use in the main Gezira farming system.

The base run was obtained with two enterprise intensity levels. Intensity level 1
was the existing resource levels and intensity level 2 assumes improvements in the
resource use, cultural practices and farm management with some increase in the level of
production inputs. The optimum base plan also deals with the possibility of buying the
subsistence local sorghum from the market rather than gowing it on the farm.

Several adjustments were made to the base run to determine the impact of the
changes on the optimum base plan. The four scenarios include: 1) omitting all elements
of the mandated cropping pattern; 2) 15 percent increase in crop yields; 3) 25 percent
increase in the prices of: i) all crops; ii) cotton; iii) non cotton crops; and iv) sorghum;
and 4) 25 percent increase in the amount of available water and family labor.

The linear progamming output in each of the four scenarios provided
information on the value of the objective function, the optimum enterprise combination,
the level of resource use with the shadow prices or marginal value products (MVP) of

each resource, the non optimal activities with the costs associated with forcing each of

135

136

them into the solution; and the stability limits of the base run. The constraint patterns
and the shadow prices tell us the input utilization on the farm and how much the tenant
would value an additional unit of each input. The validity of the optimal solution
depends on the realism of the assumptions made about prices, technical coefficients and

resource constraints.

8.1 BASE RUN ANALYSIS
8.1.1 WW

Table 8.1 shows the optimum base run under the existing resource intensity
levels. The value of the objective function is equal to L8 19,997.75 Sudanese pounds.
Gezira tenants have no buildings on the farm, have limited storage space and use hand
tools. Since their fixed costs are minimal, the total goss margin is equivalent to net farm
income.

The optimum combination of enterprises includes cash crops and food crops, and
does not utilize all the available land. Medium-staple cotton 2 was cultivated on 3.69
feddans, wheat 2 on 1.19 feddans, local sorghum 2 on 1.57 feddans, hybrid sorghum 2 on
3.43 feddans and 5.12 feddans remain not cultivated. The base run includes all the crops
gown under the mandated cropping pattern in the main Gezira except for long-staple
cotton and goundnuts whose exclusion from the optimal plan means that under present
conditions they are not competitive enough to enter the optimum plans. The 1.57
feddans for the cultivation of local sorghum varieties satisfies the 1,180 Kg consumption

requirement for food security.

137

 

TABLE 8.1 LEVEL OF ENTERPRISES IN THE GEZIRA MODEL.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ACIIVITY UNIT BASE RUN
MSCl Fed -

MSC2 Fed 3.69
WHTl Fed -

WHT2 Fed 1.19
1501 Fed -

LSO2 Fed 1.57
HSOl Fed -

H802 Fed 3.43
Gross margin LS 19,997.75
Land Fed 9.88
Cropping Intensity % 49
Family labor Md 60

Hired labor Md 247.23
Total labor Md 307.23
Operating capital LS 16,519.34
Returns to land LS 2,024.06
Returns to labor LS 65.09
Returns to operating capital IS 1.21

 

 

Source: LP88 printout.

 

 

138

The average return to a unit of land is 1.3 2,024. The average return to a unit of
labor is LS 65. The total labor use in the Optimum farm plan was 307 man-days
comprising of 60 man-days of family labor and 247 man-days of hired labor.

The optimum base plan bears some similarity to the existing farming practices in
the main Gezira in that very few tenants prefer to cultivate goundnuts because of: 1)
high production costs; 2) lack of marketing facilities; and 3) lack of formal credit.
Medium-staple cotton is preferred to long-staple cotton because it gives high yields and
has better marketing prospects.

A comparison of the actual farm and the base run reveals that improvements in
the efficiency of factor use through the reallocation Of resources on the farm has a high
potential for the achievement of increases in farm incomes. The optimum base run is
much better than the actual cropping pattern. The Objective function increases by 36
percent, family labor by 33 percent, total labor by 11 percent, returns to a unit of land by
57 percent and returns to a unit Of labor by 41 percent. This implies that the existing
resources could be utilized more efficiently than under the actual plan.

The inclusion of a local sorghum buying activity at a price of LS 3.50 per Kg into .
the base run resulted in the model picking the purchase alternative to meet the
subsistence needs. The 1.57 feddans under local sorghum were reallocated to hybrid
sorghum 2 and returns increases by 7 percent to LS 21,315.24. However, Gezira tenants
have always gown their own sorghum rather than depend on the inefficient local market.
The farm would be better off by LS 1,317.49 per year if it could rely on the market to

supply food at the same prices the farm receives when it sells.

139
8.1.2 OW C IN A RUN

The shadow price measures the rate of change of the objective function with
respect to a small change in one of the resources. The shadow price is sometimes called
marginal value product which is akin to the partial derivative in calculus. The marginal
value products shown in table 8.2 are the shadow prices of the disposal activities of the
linear progamming model. The marginal value product of a resource is defined as the
increase in the value of the total output that is Obtained from the use of an additional
unit of the resource with all other inputs held constant. Shadow prices of disposal
activities are operationally useful since they provide information about the resources
whose expansion will increase net farm income. Linear progamming solutions will hold
for specific ranges Of shadow prices until some resources become limiting at which point
another farm organization becomes optimal and the shadow prices of the resources
change.

The shadow prices indicate the productivity of resources on the farm. The
shadow prices are zero for excess (slack) resources and are positive for limiting
resources. They represent the gains in income that are possible through the acquisition
of a scarce resource. A high shadow price indicates a scarcity of the resource. The more
linniting the resource, the higher the shadow price. The shadow prices have to be
considered relative to the marginal factor cost for them to have some meaning. It is
profitable to acquire a resource if its shadow price is geater than its marginal factor
cost.

The optimum solution provides an indication of the opportunity cost or value for
each of the resources used by the Gezira tenant in the production process. Land has a

shadow price of zero because it has slack. The shadow price of labor indicate that labor

140

 

141

is scarce in July, August, September, November, December, January and February. The
high shadow price Of labor in July can be attributed to land preparation and planting of
cotton, goundnuts and sorghum. The shadow price of labor implies that unless a farmer
can hire below or equal to the shadow wage rate, he should not hire labor because the
cost will be geater than what is worth. The months where labor becomes limiting
corresponds closely to the peak periods in the farming activities when farm operations
like land preparation, planting, weeding and harvesting have to be done. Additional units
of labor during these months can increase the value of the objective function by their
marginal value products. An additional unit of labor increases the goss margin by LS
25.54 in July, LS 27.55 in August, LS 19.26 in September, LS 25.09 in November, LS
30.03 in December, LS 14.90 in January and LS 15.19 in February.

Water is scarce in August with a shadow price of LS 1.46 when cotton,
goundnuts and sorghum are being established and a shadow price Of LS 1.43 in
February when cotton and wheat are at a late maturing stage and the level of water at
the Roseires dam is low.

The results also indicate that meeting the minimum sorghum subsistence
requirements reduces the net cash income by LS 4.62 for each kg produced and
consumed on the farm, since it takes scarce resources away from the production of cash
crops.

8.1.3 0 .0 01.] _ . PEA!!! 11! Al. lo! :3. _i

The linear progamming output provides information on the activities excluded
from the base run. The excluded enterprises are the least profitable. The cost Of forcing
an excluded enterprise into the solution indicates how the value Of the objective function

would be reduced if a unit of the enterprise were forced into the base run. The value

142

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TABLE 8.3 COST OF FORCING EXCLUDED ACTIVITIES INTO BASE RUN.
ACIIVITY UNIT COST (LS)
MSCl Fed 762.11
LSC1 Fed 1,125.74
LSC2 Fed 176.62
WHTl Fed 357.03
GNTl Fed 1,399.38
GNT‘Z Fed 505.53
1501 Fed 992.86
HSOl Fed 597.66
JUNL Md 24.08
OCTL Md 18.26
MARL Md 14.07
APRL Md 20.91
MAYL Md 14.50
SLSC Kan 28.49
81.80 Kg 1.72
Source: Computed fgom survey data.

 

 

indicates the competitive position of the enterprise. The higher the value of the
enterprise, the lower its competitive position.

The enterprises excluded from the optimum plan include medium-staple cotton 1,
long-staple cotton 1 and 2, wheat 1, local sorghum 1, and hybrid sorghum 1. These
enterprises are shown in table 8.3. Forcing units of these enterprise into the optimum
solution will reduce the total goss margins as follows: medium-staple cotton 1 by LS
762.11, long-staple cotton 1 by LS 1,125.74, long-staple cotton 2 by LS 176.62, wheat 1 by
LS 357.03, goundnuts 1 by LS 1,399.38, goundnuts 2 by LS 505.53, local sorghum 1 by

LS 992.86 and hybrid sorghum 1 by LS 597.66. We could rank the crops not active in the

143

optimum plan to see which enterprises will come in when we relax the most important
constraint. Suppose increasing domestic goundnut production is a national priority and
the government is proposing a subsidy. The subsidy would have to be massive as
goundnuts is the last crop a tenant would want to produce since the high shadow price
indicates that it is the least profitable.

Hiring additional units of labor reduces goss margin by LS 24.08 in June, IS
18.26 in October, LS 14.07 in March, LS 20.91 in April and LS 14.50 in May. Selling
long-staple cotton reduces the Objective function by LS 28.49 per Kantar and local
sorghum by LS 1.72 per Kg, respectively.

The shadow prices of Operating capital is also a constraint in most months. Farm
income could increase if operating capital is available. There is a need for formal credit
to relax the capital constraint.

8.1.4 1... i ’3 Oil e13; ~11

Table 8.4 shows the righthand side stability limits of the base solution. The
Optimum solution will hold as long as any Of the resource levels do not fall below the
minimum or above the maximum limits. When any of the resources become limiting then
a different enterprise combination will become optimal and the 'shadow prices will
change. The tenancy size can vary from 14.9 to infinity feddans without affecting the
enterprise mix. August labor varies from 3.8 to 36.8 man-days, August water from 6,461
to 7,400 cubic meters Of water, the subsistence requirement Of local sorghum from 0 to
3,750 kilogams, starting capital from LS 6,875.5 to LS 8,415.6; and the tenant could

secure any amount of capital for his farm Operations. The repayment of borrowed capital

is not binding on this plan.

144
8.2 SENSITIVITY ANALYSIS OF THE GEZIRA MODEL FARM

Sensitivity analysis is the study of how changes in the coefficients of the linear
progam affect the optimal solution. Sensitivity analysis helps determine the most
effective agicultural development policy instruments that will increase tenancy
profitability in the Gezira Scheme. The policy variables are both econonnic such as input
and output prices; and technical such as improvements in crop variety, cultural practices
and farm management. The efficiency of the policy instruments will depend on how
sensitive the base solution is to changes in the coefficients.

This section presents the results of changes in the base Gezira farm model. The
four scenarios involve; 1) relaxation of the mandated cropping pattern, 2) changes in
crop yields; 3) changes in crop prices; and 4) changes in water and labor availability in
the Gezira tenancy.

8.2.1 '9. 3,3 .1 0 I a A! I; __ Dan”; I D .1. "I '3. I! 1.
8-2-1-1 W

This scenario attempts to evaluate the effect of the removal of the mandated
cropping pattern (MCP) on the enterprise mix of the Optimum base run. The four-course
rotation in the main Gezira has been mandated by the government whose sole interest is
the production of cotton for export and wheat as an import substitute whereas
goundnuts and sorghum are the tenant’s crops.

The results indicate that the relaxation of all aspects of the existing rotation and
crop mix is profitable for the Gezira tenant since he would have the freedom to choose
the crops to gow.

Table 8.5 shows the total area cultivated is 13.7 feddans. The enterprise mix is

different from that Of the base plan because tenants have complete freedom to choose

145

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

_IABLE.8.4 RE OURCE RANG VARIATIONS IN THE GEZIRA MODEL.
CONSTRAINT UNIT RIGHTHAND SIDE MINIMUM MAXIMUM
LANT ,fng, 20 14.9 (***)

ANF F 0.0 1 .1
NC Fed 3.7 (***)

[guy vfgd_ 1.2 (***1
N65 F 4.8 6.0
UNL Md 15 10.0 (***)

JULL Md 15 3.0 32.4

_AUGL Md 15 3.8 36.8
ESEPL Md 15 -1.0 28.4

CTL Md 15 1 (***l

.NOVL Md 15 (***l 43.5
DECL Md 15 (***l 3
JANL Md 25 (***1 36.3

EBL Md 25 (***1 33.2
_MARLE Md 25 24.2 (***)
PRL Md 15 13.5 (***l
AYL Md 15 8.1 (***l

_Jflflflp Cpm_p, 3.700 3.650.0 (***)
JULH C 6.600 3.65QLQ, (***l
AUGH Cpm__. 7-300 6.461;Q_E, 7.499‘Q______
SEEK gggm__ 7.300 5.200.0 (***l

_QQIH_, Cb 7.800 3.600.0 (***)

_jflnflLE (jaun_i 7.300 4.IQQ;Q_E (***)

_D£§fl_, gggm__ 6.900 4:19010 (***)
JANE C 5.200 4.100.0 (***l
EEBH C 4.100 3.1OQLQ__. 4.718.2

_MSBR K 1.180 49;9__ 3.7SQ.Q '
JUNC LS 7.150 6.875.6 8.415.6

_LNDC_ LS 7.180 0.0 (***l
(***) M '

Source: Computed from survey data.

 

 

146

the crops they wish to gow on financial gounds. The new Optimum plan has eliminated
medium-staple cotton 2, the area of wheat 2 increases by 310 percent and hybrid
sorghum 2 increases by 108 percent. Cotton drops out Of the new plan because it
occupies land for a longer period of time and requires more labor and water whereas
wheat is a winter crop that requires less labor. The changes in the optimum plan can be
attributed to the shortage of capital for hiring more labor in the critical periods. The
1.57 feddans are maintained under local sorghum 2 for meeting food security. Land
under cultivation increases by 37 percent, cropping intensity by 39 percent, hired labor

decreases by 30 percent and total labor by 24 percent. Return to capital decreases by 8

percent which is an indication of diminishing returns to resources.

 

147
82.12 W
Table 8.6 shows the shadow prices of the resources used in the optimum plan
without the mandated cropping pattern. The shadow price Of labor drops to zero in
September and rises by 100 percent irn January and February during cotton and wheat
harvesting. The shadow price of water increases by 90 percent irn August but that Of

subsistence sorghum and operating capital remains the same.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TABLE 8.6 SHADOW PRICES WITHOUT MANDATED CROPPINQ PATTERN.
_AQTIVITY UNIT BASE MCP WITHOUT MCP % CHANQE
LAND Fed 0.00 0.00
JUNL Md 0.00 0.00
JULL Md, 25.54 25.54
_AUQL Md 27.55 427.55
_§EPL Md 19.26 0.00 -100
OCTL Mdg 0.00 0.00
NOVL Md 25.09 25.09
DECL Md 30.03 30.03
_dANL Md 14.90 0.00 -100
_ggn Mg 15.19 0.00 -1oo
MARL Md 0.00 0.00
APRL Md. 0.00 0.00
MAYL Md 0.00 0.00
_AQQL Md 1.46 2.78 +90
FEBL deE 1.44 1.46 +1
_MSBR Kq 4.62 4.61
Source: Computed f_rp_rr_n_ survey data.

 

 

148
8.2.1.3 0 OF FORCN CL D IA 1 -_ INTO [LL 0-1!.

Table 8.7 shows the cost of forcing into the optimal solution the enterprises that
have been excluded from the plan. The cost of bringing enterprises into the plan or
hiring additional units Of labor increased tremendously such that the losses in the

Objective function following their inclusion will be significant. These costs reveal the

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TABLE 8.7 COST OF F ORCING EXCLUDED ACTIVITIES INTO THE PLAN.
ACTIVITY UNIT BASE MCP WITHOUT MCP
MSCl Fed 762.11 1,566.58
MSC2 Fed 0.00 758.58
LSC1 Fed 1,125.74 1,930.81
LSC2 Fed 1,125.74 931.11
WHTl Fed 357.03 357.03
GNTl Fed 1,399.38 1,289.67
GNT2 Fed 505.53 395.82
1.501 Fed 992.86 992.86
HSOl Fed 597.66 597.66
JUNL Md 24.08 24.08
SEPL Md 0.00 19.26
OCII. Md 18.26 18.26
JANL Md 0.00 14.49
FEBL Md 0.00 14.91
MARL Md 14.07 14.07
APRL Md 20.91 20.91
MAYL Md 14.50 14.50
SLSO Kg 1.72 1.72
Source: Computed from survey data.

 

 

149

competitive position of the enterprise. The lower costs indicate potential competitive
position. Forcing a unit of medium-staple cotton 2 into the optimum solution would
reduce the total goss margin by LS 758.58, local sorghum 2 by LS 931.11 and
goundnuts by LS 395.82. Hiring an additional unit of June labor reduces the Objective
function by LS 24.08 and the sale of one more kilogam Of local sorghum produced on

the farm will reduce the Objective function by LS 1.72.

8-2-2 W
8.2.2.1 W

Gezira research station field trial results have shown that increases in yield higher
than intensity level 2 are feasible with fertilizer application, improvements in the delivery
of research packages; and incentive structure tO encourage tenants to adopt new
technolog'. This scenario examines the effect of a 15 percent increase in yields Of all
crops following technological improvements. The area under local sorghum decreases by
12 percent since the high yields imply that the subsistence needs can be met with less
land, and the area of hybrid sorghum increases by 6 percent.

The new plan is much better due to improvements in the efficiency of resource
utilization. The objective function increases by 28 percent. Returns to land increases by
28 percent, returns to labor increases by 29 percent and returns to capital increases by 54
percent. These returns are much higher than in the optimum base plan.

8-22-2 W

When crop yields increase by 15 percent, land has a shadow price Of zero.
Bringing more land into production would add no return to the value of the objective
function. The new plan gives more output and the shadow prices of labor remain the

same. The shadow prices of water increases by 29 percent in August and 28 percent in

150

 

February. Water is a limiting factor. Labor is limiting in July, August and September
during the period of planting and weeding of cotton, goundnuts and sorghum; and in
November, December, January and February during the period Of crop harvesting.
Availability of funds could break the labor bottleneck leading to production increases.
8.2.2.3 .0 0 0:. I a . 11in!!! Ill 2 M. I]. S. 1'.

Table 8.10 shows the cost of forcing in activities excluded from the optimum plan.
The production of one feddan with long-staple cotton 1 will decreases the value of the
objective function by LS 1,296.74, goundnuts 1 by 1,634.98 and local sorghum 1 by LS
1,212.73. The high cost of forcing in goundnuts into the optimum plan reflects its low

value on the local market reduced by the Opportunity value of the resources it requires.

 

151

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TABLE 8.9 SHADOW PRICES WITH 15 PERCENT INCREASE IN YIELD.
RESOURCE UNIT BASE RUN 15 % YIELD
LAND Md 0.00 0.00

JUNL Md 0.00 0.00

JULL Md 25.54 25.54
AUGL Md 27.55 27.55

SEPL Md 19.26 19.26

OCTL Md 0.00 0.00

NOVL Md 25.09 25.09

DECL Md 30.03 30.03

JANL Md 14.90 14.90

FEBL Md 15.19 15.19
MARL Md 0.00 0.00

APRL Md 0.00 0.00

MAYL Md 0.00 0.00

AUGW Cbm 1.46 1.88

FEBW Cbm 1.44 1.84

MSBR Kg 4.62 4.65

Source: Computed from survey data.

 

The cost is so high because goundnuts requires a lot of labor in November and
December. The low cost of long-staple cotton 2 suggests that a slight change in the
model structure could bring it into the basis. The cost of hiring additional units of labor
is IS 24.08 in June, LS 18.26 in October, IS 14.07 in March, IS 20.91 in April and IS

14.50 in May. Selling a kilogam Of locally produced sorghum would result in the loss Of

LS 1.76.

 

152

 

8.2.3 W
8.2.3.1 W

There is no change in the crop areas for medium-staple cotton 2, wheat 2, local
sorghum 2 and hybrid sorghum 2 when the prices of: (i) all crops, (ii) cotton, (iii) non
cotton crops; (iv) sorghum increases by 25 percent. Higher producer prices would be
needed if the tenants are to produce more Of these crops.

Table 8.11 shows increases in prices of: (i) all crops, (ii) cotton, (iii) non cotton
(iv) and sorghum by 25 percent respectively. In alternative ii: the cropping pattern
changes. The area under medium-staple cotton 2 irncreases by 14 percent, that under

wheat decreases by 42 percent and that under hybrid sorghum decreases by 15 percent.

TABLE 8.11 LEVEL OF ENTERPRISES WITH 25 PERCENT PRICE INCREASES.

ACTIVITY

MSC2

WHT2

LSOZ

H502

Gross ma in

Land

C intensit

Famil labor

Hi red labor

Total labor
ati i 1

Returns to Land

UNIT
Fed
Fed
Fed
Fed
LS

1
ALL CROPS
3.69

28 320.97
9.88

49

60

247.23
307.23

6 51 .

2 866.49
92.19

153

ii

COTTON
4.19

0.69

1.57

2.93

24 342.18
9.38

47

75

16 4.1
2 595.11
76.55

iii
NON COTTON
3.69

1.19

.57
3.43
24 001.63
9.88
49
60

47.
307.23

6 5
2 429.31
78.12

iv
SORGHUM
3.69
1.19

49

60

247.
307

6 519.33
2 357.02
75.80

 

Return to ital 1.71 1.51 1.45 1.41

 

The cropping intensity decreases by 2 %. The family contributes 25 percent more labor
than in the other alternatives. Hired labor decreases by 2 percent and total labor
increases by 4 percent. Operating capital decreases by 2 percent.

Returns to the scarce resources are much higher than in the optimum base plan.
The objective function, returns to land and returns to Operating capital increases range
from 16 to 42 percent compared with the base run.
8232 W

Table 8.12 shows the shadow prices after 25 percent price increase in all crops,
cotton, non cotton and sorghum, respectively. The shadow price of land remains zero

since there is slack land. The shadow prices of labor are the same in all the alternatives

154

 

except for April labor under alternative 2 where the shadow price rises by 100 percent.

Under alternative i, the shadow price of water increases by 47 percent irn August,
49 percent in February and subsistence requirements increases by 28 percent.

Under alternative ii, the shadow price of water increases by 88 percent in August
and decreases by 2 percent in February. Under alternative iii, the shadow price of
August water decreases by 49 percent. and increases by 49 percent in February and that
of minimum subsistence sorghum increases by 28 percent under alternative iii.
8.2.3.3 O O 0:01! .401 D _I 3 All kl. I11. 0, 110

Table 8.13 shows the cost of forcing excluded activities into the optimal plan.

155

Alternative i: The costs of bringing in enterprises not in the optimal solution
increases by 34 percent for medium-staple cotton, 30 percent for long-staple cotton 1, 13
percent for long-staple cotton 2, 49 percent for wheat 1, 31 percent for goundnuts, 24
percent for goundnuts 2, 38 percent for local sorghum 1, 40 percent for hybrid sorghum
and 34 percent for the sale Of local sorghum 2.

Alternative ii: The cost of forcing excluded enterprises into the optimal plan
increases by 32 for medium-staple cotton 1, 28 percent for long-staple cotton 1 and by
15 percent for long-staple cotton 2. The cost of hiring additional labor declines by 100 in

March and 44 percent in April.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TABLE 8.13 COST OF FORCING EXCLUDED ACTIVITIES INTO SOLUTION.

i ii iii iv
ACTIVITY UNIT ALL COTTON COTTON NON COTTON SORGHUM
MSCl Fed 1,028.11 1,007.11 762.11 762.11
LSCl Fed 1,463.64 1,442.64 1,125.74 1,125.74
LSC2 Fed 200.02 202.35 176.62 176.62
WHTl Fed 517.03 357.03 517.03 357.03
GNTl Fed 1,834.38 1,399.38 2,359.38 2,359.38
GNTZ Fed 625.53 505.53 1,465.53 1,465.53
LS01 Fed 1,374.86 992.86 1,376.86 1376.86
H501 Fed 837.66 597.66 837.66 837.66
JUNL Md 24.08 24.08 24.08 24.08
OCTL Md 18.26 18.26 18.26 18.26
MARL Md 14.07 0.00 14.07 14.07
APRL Md 20.91 11.70 20.91 20.91
MAYL Md 14.50 14.50 14.50 14.50
SLSO LS 2.30 1.72 2.30 2.30
Source: Computed from survey data.

 

 

156

Alternative iii: The cost of forcing excluded enterprises into the Optimum plan
increases. Wheat 1 increases by 49 percent, goundnuts 1 by 69 percent, goundnuts 2 by
190 percent, local sorghum 1 by 39 percent and hybrid sorghum 1 by 40 percent from the
Optimum base plan.

8.2-4 WW
8241 W

Alternative i: the amount of available water increases by 25 percent for all
months. The area under medium-staple cotton 2 increases by 36 percent and that under

wheat 2 decreases by 15 percent. The amount Of the Objective function increases by 14

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TABLE 8.14 INCREASES IN AVAILABLE WATER AND LABOR BY 25 %.
ACTIVITY UNIT 25 % WATER 25 % LABOR
MSC2 Fed 5.00 3.69

WI-II‘Z Fed 1.01 1.19

L802 Fed 1.57 1.57

H502 Fed 3.43 3.43

Gross margin IS 22,795.87 20,663.87
Land Fed 11.01 9.88
Cropping Intensity % 55 49

Family labor Md 75.0 75

Hired labor Md 296.91 232.73

Total labor Md 371.91 307.73
Operating capital LS 13,675.77 17,267.09
Returns to land IS 2,070.47 2,091.48
Returns to labor IS 61.29 67.25
Returns to capital LS 1.67 1.20

Source: Computed from survey data.

 

 

157

percent, cropping intensity by 12 percent, family labor use by 25 percent, hired labor by
20 percent, total operating capital decreases by 17 percent, returns per feddan decreases
by 3 percent, return per man-day by 6 percent and return per operating capital by 38
percent which indicates diminishing returns to capital.

Alternative ii: The amount of available labor increases by 25 percent for all the
months. The cropping intensity is similar to that Of the Optimum base run. The value Of
the objective function increases by 3 percent, hired labor by 6 percent, total operating.
capital by 5 percent, return to land by 3 percent, return to labor by 3 percent and return
per operating capital is similar to that of the base plan.
8.2.4.2 n) W ’ ' ,. ll. . '. n40 1., :VAJ--L3 W; I, i Ll” -3501

The high prices attached to water, labor and operating capital in some months of
the year indicate that increases in these resources would be profitable.

Alternative i: The availability of more water brought more land under medium-
staple cotton 2. Shadow prices of March and April labor increases by 100 percent
because more labor will be required for picking and pulling of cotton. Shadow price of
August water increases by 100 percent and that of February water decreases by 3
percent.

Alternative ii: The availability of family labor led to no significant changes in the
values of the shadow prices that remain similar to that of the base plan and the reason
being that the tenant could always substitute it with hired labor if funds are available.
8.2.4.3 0 0 0 (Q. I, . Q, 1.. P AHIUJII . IL! 0 lol, 0 I.

Table 8.16 shows the cost Of forcing excluded activities into the solution. The cost
value indicates the competitive position Of the enterprise. The higher the value of the

excluded enterprise, the lower its competitive position.

158

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TABLE 8.15 SHADOW PRICES WITH 25 % WATER AND LABOR INCREASE.
RESOURCE UNIT 25 % WATER 25 % LABOR
LAND Fed 0.00 0.00

JUNL Md 0.00 0.00

JULL Md 25.76 25.54

AUGL Md 27.80 27.55

SEPL Md 19.44 19.26

NOV Md 25.09 25.09

DECL Md 30.03 30.03

JANL Md 14.90 14.90

FEBL Md 15.19 15.19

MARL Md 14.07 0.00 '

APRL Md 20.91 0.00

MAYL Md 0.00 0.00

AUGW Cbm 0.00 1.46

FEBW Cbm 1.40 1.44

MSBR Kg 4.62 4.62

Source: Computed from survey data.

 

 

Alternative i: The cost of forcing excluded activities into the optimum plan
decreases by 4 percent for medium-staple cotton, 4 percent for long-staple cotton and
increases by 3 percent for wheat 1. The cost of hiring more labor in March and April
decreases by 100 percent. Hiring more units of labor irn June, October, March, April and
May will reduce the value of the objective function by their respective costs.

8-2-5 W

This scenario evaluates the effect of the removal of borrowing on the enterprise

~

159

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TABLE 8.16 COST OF FORCING EXCLUDED ACTIVITIES INTO SOLUTION.
ACTIVITY UNIT 25 % WATER 25 % LABOR
MSC 1 Fed 732.14 762.11

LSC1 Fed 1,096.81 1,125.74

LSC2 Fed 181.16 176.62

WHTl Fed 357.03 357.03

GNTl Fed 1,398.28 1,399.38
GNT2 Fed 507.12 505.53

LS01 Fed 990.16 992.86

HSOl Fed 595.51 597.66

JUNL Md 24.30 24.08

OCIL Md 18.42 18.26

MARL Md 0.00 14.07

APRL Md 0.00 20.91

MAYL Md 14.50 14.50

SLSO Kg 1.72 1.72

Source: Computed from survey data.

 

 

 

mix Of the base run. The Objective function decreases by 33 percent. The area under
cultivation decreases tO 6.59 feddans. The activities in the solution include medium-staple
cotton 2, local sorghum 2 and hybrid sorghum 2. Wheat 2 drops out Of the solution. The
area under medium staple cotton 2 decreases by 54 percent, hybrid sorghum 2 decreases
by 3 percent. Returns to land, labor and capital decrease by significant amounts. The
changes in the Optimum base plan can be attributed to capital shortage such that most

aspects of the rotation will not be profitable.

160

Shadow prices of labor in July, August, September, November, and December
increase by more than 100 percent. Shadow prices Of labor decreases by 100 percent in

January and February.

8.3 SUMMARY

This chapter presents the optimum enterprise combinations of the base run and
the postoptirnality analysis solutions Of the Gezira model farm. The empirical findings
irndicate that the enterprises produced under improved technology would be in a more
competitive position than those produced under the existing technology. Improvements in
the efficiency of factor use and farm income could result from resource reallocation
under the new technology.

The results indicate that the omission of the mandated cropping pattern, 15
percent yield increase, 25 percent price increases and the 25 percent more water being
made available will lead to farm profitability. The high potential can be realized by
increased resource use, resource productivity and farm income through improvements in
cultural practices, crop variety and farm management leading to the attainment of the
new technology production levels. Capital, water and labor are limiting. Provision of
institutional credit could enable tenants to pay for the maintenance of water channels
and hire more labor during peak labor demand periods.

There is a 7 percent reduction in net farm income when the tenants are
constrained to produce their own subsistence sorghum. Improvements in crop marketirng
could make this unnecessary since they could purchase it from the market and would still

be better off financially. The important production constraints are lack of improved

161

technical packages, remunerative producer prices, production inputs and research

knowledge.

CHAPTER IX

SUMMARY, POLICY IMPLICATIONS, AND SUGGESTIONS

FOR FURTHER RESEARCH

This chapter will give a summary of the study, draw policy implications, indicate

the major lirrnitations of the study, and give suggestions for future research.

9.1 SUMMARY

Agiculture is the most important sector Of the Sudanese economy. It represents
a vital development problem and Offers the most attractive development Opportunity.
Sudan is blessed with a vast agicultural potential and three different subsectors:
traditional, mechanized and irrigated Offering a range Of opportunities and challenges.
Agiculture employs 75 percent of the population and contributes 95 percent to export
earnings. The irrigated subsector contributes a disproportionately large share to export
earnings. Despite the vast agicultural potential, Sudan cannot satisfy its internal food
needs. This is reflected in low agiculture productivity, uncertain weather, civil war, poor
use of irrigable land and weak infrastructure with limited storage and inadequate
transport to move food supplies. All the three subsectors suffer from low productivity
due to inadequate technology, lack Of access to productive inputs and credit; and soil
fertility decline.

The major constraints to gowth in the agiculture sector are: the uncertainty of

rainfed agiculture; the fragile sahelian environment; weak transportation; an unstable

162

_ V

163

economic and political environment and an agicultural commodity marketing system
that provides little return to farmers.

The irrigated subsector has been characterized by low output, producer income
and resource productivity. The major problems that plague the irrigated subsector
include poor maintenance, bad management, shortage of equipment, price controls and
lack of proven technology. These problems limit the capacity of the irrigated subsector to
contribute to econonnic development.

Lack of proven technology is an important cause of the poor performance of the
Gezira Scheme. The Gezira rehabilitation project has been established in order to
improve the scheme by enhancing its capacity to perform efficiently. The strategy of this
project is to improve technology by providing cherrnical fertilizers, improved seed
varieties, land preparation and cultural practices. The proper use of these inputs could
alter the relative resource requirements of the cropping enterprises as well as their
relative revenues. Improved technology and the resulting changes in resource allocation
could have significant impact on cropping pattern, resource productivity, employment
and farm income. The relevant information on changes in cropping patterns, re80urce
productivity and farm income can form the basis for the formulation of sound
agicultural policies that can meet the major government goals. The major problems
facing Gezira tenants are: 1) lack of tenant participation in decision making, 2) lack of
flexibility in choosing enterprise combinations; and 3) inability of the tenants to adjust
farm size to fit their family lifecycles.

9.1.1 W
The purpose of the study was to analyze changes in resource use, enterprise

combination and farm income. The study focused on five Objectives: 1) Describe the

164

farrrning system of the Gezira irrigation Scheme; 2) identify the main constraints facing
tenants in increasing food production and farm income; 3) evaluate alternative policy
scenarios which can lead to more efficient resource use; 4) evaluate the econorrnic
viability and Sudan’s comparative advantage of the crops gown in the Gezira; and 5)
draw policy implications for raising crop productivity. The theoretical framework
approach include: 1) domestic resource cost ratios to evaluate Sudan’s comparative
advantage in the production of crops in the Gezira, and 2) linear progamrrning models of
the Gezira to obtain optimum farm plans under existing resource constraints

1) The domestic resource cost ratios provided the theoretical model for the
determination of comparative advantage for the 1989/90 cropping season. A domestic
resource cost ratio of less than one means Sudan has a comparative advantage in the
production of the particular crop because it can exchange domestic resources for foreign
resources at a rate below which the economy as a whole converts the domestic resources
irnto foreign exchange. The necessary irnformation for computing domestic resource cost
ratios includes: the value of domestic resources used in the production Of the commodity,
value of joint product, border price of the commodity, value of traded inputs and shadow
exchange rate.

2) Static linear progamming model provided the framework for analyzing the
economics of resource use under existing conditions and improvements in technology.
The structure of the linear progamming model described in chapter VI] was formulated
to maximize net income subject . to meeting minimum sorghum consumption
requirements of the household. The activities in the model included crop production,

labor hiring, irrigation water, capital flow, crop selling, sorghum buying and capital

165

borrowing. The model generated optimum farm plans that gave the direction of change
in cropping pattern, resource use and farm income.

Data from this study were Obtained from both primary and secondary sources. A
survey of 96 farm households was conducted by the researcher in four administrative
blocks (Wad Numan, Tayba, Turis, Loata). Twenty four tenants chosen from each of the
four blocks were interviewed once a month by eleven enumerators who resided in these
blocks during the 1989/90 cropping season. The information collected was on labor use,
crop yields, cost of production, available water and socioeconomic characteristics of the
household. The socioeconomic characteristics of the tenant households, their resource
use and crop enterprise budgets were analyzed in chapter IV. Lotus 1-2-3 and SPSS
software packages were employed to produce the descriptive statistics presented in
Chapter V and the technical coefficients necessary for building the linear progamming
model in Chapter VII. The choice of the linear progamming model was based on its
ability to give an Optimal solution over a range of alternative activities and an
identification of resource scarcities at particular periods. The linear progamming base
run provided information on the value of the Objective function, enterprise combination,
level of resource use, shadow prices, cost Of forcing excluded activities into the Optimal
solution; and the range of stability limits. Sensitivity analyses were conducted to evaluate
the effects of changes on the goss margin. The four postoptirnality scenarios involve: 1)
relaxing the mandated cropping pattern, 2) changes in crop yields; 3) changes in crop
prices; and 4) changes in the available water. The sensitivity analyzes were aimed at
determining the most effective agicultural development policy instruments. The policy
instruments are both technical and economic. The efficiency Of these instruments depend

on how sensitive the coefficients are in the optimal base run.

166

The unit Of analysis was a typical 20 feddan main Gezira tenancy that uses 60
man-days of hired labor, 247 man-days Of family labor and LS 7,150 (Sudanese pounds)
of Operating capital per annum.

9.1-2 W

The results of the study indicate the potential increase in farm income under
improved technology that serves to improve efficient use of the production factors. The
shadow price of labor was positive for most months and well above the estimated
average wage. Since labor adds more to goss income than it costs, it is economic to hire
more labor. Capital requirements for all the crops are limiting because all the necessary
inputs have to be purchased and there is an unavailability of formal credit. Trials on the
use of chemical fertilizers in the production of goundnuts and local sorghum varieties
have shown high potential improvements irn productivity.

The cropping pattern was less diversified in the base plan than the actual plan.
The optimal enterprise mix includes medium-staple cotton 2, wheat 2, local sorghum 2,
and hybrid sorghum 2 but excludes long-staple cotton and goundnuts because of a high
cost of production and low sale prices. The crops in the base solution are those produced
under intensity level 2 which reflects improvements in technology. The high shadow
prices of labor for most months indicate that labor is linniting during the peak demand
periods and additional units of labor will increase the value Of the objective function by
the value of the shadow price. Irrigation water is limiting in August and February,
additional cubic meters of water will increase the value of the objective function in these
periods. The high shadow prices for capital shows that capital is linniting in the Gezira.
Provision of credit will ease the capital constrairnt. It puts the tenant in a position to

finance most of the expenses such as hiring of more labor during the peak periods.

167

The Objective function value “increases by 17 percent when all the restrictions on
the mandated cropping pattern were removed. Cotton dropped out of the Optimum plan,
the area of wheat 2 increases by 310 percent and that of sorghum by 108 percent. Both
wheat and sorghum require less labor and are for local consumption. More crops will
enter the plan if more water and funds are made available for hiring more labor.

The Objective function value increases by 28 percent when yields increases by 15
percent. The enterprise mix is the same with 28 percent increase in return to land, 29
percent increase in return to labor and 54 percent increase in returns to capital. Labor
remains limiting in the peak periods; and water in August and February.

The Objective functions, returns to land, returns to labor, and returns to capital
all increases under various scenarios of 25 percent increases in prices of all crops, cotton,
non cotton crops and sorghum.

The objective function value increases by 14 percent with some decreases in
returns to land, returns to labor and returns to capital increases by 38 percent when the
available irrigation water increases by 25 percent. The increase in the amount of family
labor by 25 percent increases the value of the Objective function by 3 percent but has
little effect on returns to the resources.

The domestic resource cost ratios for the 1989/90 cropping season indicate that
Sudan has comparative advantage in the production of medium-staple cotton (0.49),
long-staple cotton (0.48), wheat (0.32), and goundnuts (0.53) and comparative
disadvantage in the production of sorghum (1.70) in the Gezira. The rankirng of the crops
is as follows: wheat, long-staple cotton, medium-staple cotton, goundnuts and sorghum.

The geatest comparative advantage exist in goundnuts and the smallest in sorghum.

168

The domestic resource cost ratios are sensitive to changes in border prices. exchange

rates and yields.

9.2 POLICY IMPLICATIONS

The study results indicate that there is potential for improvement in resource use,
productivity and farm income through better land preparation, cultural practices, input
use, improved seed and farm management. The strategy for the development of the
Gezira Scheme has to focus on the design and improvement of progams that include
efficient input supply and utilization, reduction in costs, better water distribution
network, credit provision, agiculture research and marketing system. These progams
should aim to make inputs available to the tenants in order to facilitate the adoption Of
new technology in timely manner. Improvements in market infrastructure, research and
extension services are prerequisites that could encourage the Gezira tenants to adopt
new technology.

Family labor is inadequate leading to the development of labor bottlenecks irn
peak labor demand months. Hired labor is available but tenants lack funds for labor hire
for goundnuts and sorghum production. The government needs to provide formal credit
to the tenants to enable them hire the additional labor required for the peak demand
periods. One way to handle credit could be through producer cooperatives that mobilize
savings and charge real interest rates. Improvements in the process of financial
intermediation can reduce the cost of borrowing to society. Agicultural researchers will
have to focus on the need for improvements in input and credit delivery and the
. complementarities between credit and adoption of new technology. This is important

given the administrative problems that have frustrated credit progams in the Sudan such

169

as low repayment rates, low interest rate and diversion of farm credit to non farm uses.
The provision of credit has to be approached with utmost care.

This study indicates that the amount of family labor available for farm work is
low, this might be due to low farm incomes, prospects of Off-farm jobs, out-migation of
the young to the towns, lack of participation by female tenants, number of working sons,
the degee of mechanization and the pattern of cultivation. Improvements in productivity
and farm income could attract more family labor to the farm. There is need to improve
the health and nutrition of the tenants since the bad effects of irrigation are being felt in
the prevalence of malaria, bilharzia and abdominal diseases that could limit the physical
ability of the tenants to work long hours.

The government needs to develop factor markets since biological and mechanical
inputs are needed to raise the productivity per feddan per person. Improved seeds,
fertilizers and pesticides are necessary to raise the productivity. The Board needs to
make inputs available for goundnuts and sorghum production. Research on demand and
supply of production inputs can determine the best input distribution system that will
meet tenant needs.

Silt deposits and weed gowth in the Gezira canal system have become serious
problems. Research on irrigation should focus on improvements in water measurements,
estimatds Of cr'op water requirements, water control and removal of sediments and
weeds.

The Board is interested in the production of cotton for export and the tenants
have to gow cotton in order to safeguard the production of goundnuts and sorghum.
Sudan has a comparative advantage in the production of long and medium-staple cotton.

The government through Sudan Cotton Company makes huge losses and does not repay

170

Bank Of Sudan cash advances for the production and purchase of cotton. Sudan lost
market for long-staple cotton to competition from synthetics, honeydew problems, and to
the emergence of India and China from being net importers to net exporters. The
market has shifted from long-staple to medium-staple cotton. The government has to
promote the production of medium-staple cotton on the available 500,000 feddans in the
Gezira sirnce market opportunities appear to be good. Medium-staple cotton gives high
yield and high ginning out-turn, and commands more than 80 percent of the world cotton.
trade. Improvements in ginning efficiency and early picking could lead to increases in
prices up to 15 percent.

Gezira tenants like to produce wheat because it is a food staple, requires less
labor and receives a prefinance from the Board. Sudan has a comparative advantage in
the production of wheat. Wheat production in the Gezira is economic when valued at
irnnport parity prices with better input application. Since Sudan cannot afford to import
wheat due to budget constraints, wheat price support progam at import parity would be
an efficient food strategy that saves foreign exchange spend on wheat imports. The
success of the policy will depend on improvements in seed, fertilizer application, water
management, land levelling and timely harvesting. These measures can lead to increases
in area and productivity. But increases in wheat area will mean reductions in the area of
other crops because of competition for land and water. Thus sustained increases in wheat
production will require radical improvements in irrigation systems and water
management.

Groundnuts suffers from inadequacy in transport, storage, gading and finance.
Information on the market situation on a timely basis is lacking as well as information on

prices and the irnfrastructure for moving the produce from a low to high price markets.

171

The overvalued exchange rate and high transport costs hurt goundnut exports. The
private sector should be encouraged to provide the necessary market coordination.
Market research needs to address market linkages through exchange and the efficiency
Of the market in the transmission of information to producers. The economic analysis
shows that prospects for the continuation of the exportation of goundnuts are good if
only the internal constraints could be attended to. Groundnuts policy should focus on the
resolution of the following constraints: high demand for labor, shortage of credit and lack
Of efficient markets.

Sorghum is a food staple that the tenants like to gow. Sudan has comparative
disadvantage in sorghum production in the Gezira. Sorghum production is not econonnic
due to the high cost of the factor inputs of land, water, labor and capital. An increase in
sorghum production beyond subsistence is uneconomic since it would take land away
from other more profitable crops. Government policies on prices and exports have been
deleterious to sorghum trade. The overvalued exchange rate, restrictions on trade and
uncertain producer prices leads to huge losses on sorghum exports.

Exchange rate reform, increase in producer prices, and the removal Of
government monopoly in goundnuts marketing will increase farm incOme in the Gezira,
foreign exchange earnings and government revenues. Changes in cropping pattern,
decision making and provision of farm inputs are important for the Gezira tenants.

Changes in cropping patterns have implications on water use, food security and
foreign exchange earnings. Reducing the area under cotton makes more water available
for sorghum and wheat production,and increases in cereal production but potential

export earnings will decrease. Changes in production technology will increase wheat

yields.

172

Scheme management decides on crop mix, timing of operations, kind of
technology and input use. Flexibility in tenant decision making will lead to efficient
resource allocation with price incentives serving as the basis with important implications
for production, income, foreign exchange and employment.

Making inputs available will increase productivity. Fertilizers should be made
available for goundnuts and sorghum. Improvements in weeding and harvesting
technology will help.

The following are the three important broader policy issues:-

1. There needs to be a geater role for the private sector participation in the irrigated
subsector with the government providing a conducive environment that fosters free entry
and competition. This policy will encourage the private sector to make rational decisions
in response to market forces. The modernization of the irrigated subsector will provide
food, employment and income. Direct government investment is appropriate for the
provision of public goods such as agicultural research and market information because
the private sector has no capacity or the econorrnic incentive to provide these goods.

2. Formulation of economic stabilization package that includes monetary policy that
supply adequate credit; fiscal and budget policy that balances revenue and expenditure
and provide funds for Operation. A competitive exchange rate is good for the Gezira that
produces the bulk of the cotton for export, wheat for import substitute and goundnuts
for domestic consumption and export.

3. Increases in the farmer’s share of farm income can be achieved through increases in
productivity from improved technology that lowers unit costs of production and from

economies of scale and improvements in factor and product markets.

173

Important policy issues that relate to the irrigated subsector that need to be
tackled are: 1) pricing policy of agiculture commodities and unifying the dual exchange
rate; 2) foreign exchange potential of the different crops; 3) improvements in the
efficiency of irrigation through more rational pricing; 4) removal of silt and weeds from
the canal system; 5) relaxation of excessive government control on the cropping pattern;
6) viability Of public corporations; 7) policies to increase marketing efficiency through
privatization; 8) agicultural research policies that are effective in promoting
development; 9) policies to increase farmer incentives by reducing controls over the

cropping pattern; and 10) policies that reduce the cost of production Of all crop.

9.3 LIMITATIONS OF THE STUDY

The static linear progamming model used in the analysis can be useful for
comparative analysis of equilibrium situations. but farmers operate in a dynamic world
where their environment undergoes continuous changes. The static model may not
provide all the information about the adjustment path of supply response as one set Of
policy variables is replaced with another. This information could be Of a geater use for
policy evaluation than simple knowledge of the supplies obtained from equilibrium
situations.

The study approach provides only partial equilibrium solutions. It assumes that
when a product price changes, the prices of other products will remain constant which
means complete independence between products. However, in agiculture the majority
of the products have competitive, supplementary and complementary relationships in the

processes of crop production. Competitive product prices tend to be positively correlated

174

where a rise or fall in the price of one product tends tO pull competing product prices in
the same direction.

The study relies mairnly on the 1989/ 90 cropping season data and does not handle
the analysis of the consequences of the variation in the input-output coefficients.
However, the information on crop yields and available water was a five year average and
the data collection covers 1989/90 that was a normal cropping season. The computed
domestic resource cost ratios are sensitive to exchange rates, border prices and costs of
production.

The activities not included in the model are vegetables, livestock and off-farm
employment. These enterprises were excluded from the model because they are not
important enough to influence the decision process.

Most of these limitations are associated with many techniques used in farm
planning and supply estimation. Thus the results of this study provide some useful
insights on resource allocation and the impact of public policy on the allocation of the

scarce resources in the Gezira .

9.4 FURTHER RESEARCH

Further research should focus on: 1) the production of vegetables for domestic
consumption and export market; 2) the contribution of off-farm employment to tenant
income; 3) the integation of livestock production into the Gezira farming system; 4) the
distribution effect of current government policies; 5) the marketing of goundnuts; and 6)
production constraints and development opportunities. Researchers need to assess the
prospects of the tenants managing their tenancies through their own producer

associations rather than being administered by the Board.

APPENDICES

APPENDIX A

GEZIRA TENAN CY AGREEMENT, 1927

175

APPENDIX A
GEZIRA TENANCY ORDINANCE, 1927.
(a) W
Name of block ......................................................
Name of rightholder .................................................
Name Of cultivating tenant .............................................
Status Of tenant (rightholder nominee, etc.) ................................
Date of ageement ...................................................
Season ............................................................
An ageement made between the Sudan Plantations Syndicate, LTD. (hereafter called
the syndicate) of the first part and -- (hereafter called the tenant) of the second part:
whereas the tenant is desirous Of taking from the syndicate a cultivating tenancy under
the provisions of the Gezira land ordinance, 1927, of -- feddans Of land at -- for the
cultivation of cotton and other crops and the said tenant has seen the land specified and
has a thorough knowledge of its boundaries. And whereas the parties have ageed that
the said cotton crop shall be gown and marketed and the proceeds of the sale thereof
divided as set out in the 1936 standard conditions of tenancy published by the syndicate
and posted at the syndicates block office at ........... . .......................
Now it is hereby ageed between the parties:
1. The syndicate agees to let and the tenant agees to take until the first day of June
next the plot of land -- feddans in area above described.
2. The provisions of the 1936 standard conditions of tenancy published by the syndicate

and posted in the syndicate’s said block office at -- shall apply to and govern the tenancy

 

176
hereby created and the gowth and marketing Of the said cotton crop and the division Of
the proceeds of sale thereof in the same manner as if the same were incorporated and
set out herein verbatim, and the tenant hereby acknowledges that he has had the
opportunity of reading and having read to him the said standard conditions.
Signed The tenant

by for
The Syndicate

 

 

 

 

Seal on signature of Sheikh (or responsible as)
as a certificate of tenants identity.

I hereby certify that before signing the ageement -- has had an opportunity of reading
and having read tO him the 1936 standard conditions of tenancy posted at the Syndicates
Block office at

 

 

Signed: 0mida or Sheikh

MEMORANDUM OF RENEWAL

This tenancy has been renewed for the period stated below, namely:

 

Period ending Signature on behalf Signature or
of company seal of tenant

(13) W

l. Tenancies are created under and subject to the provisions Of Gezira land ordinance,
1927, certain of which, without prejudice to the application of the ordinance as a whole
are, for the information of the tenancy, set out in the schedule hereto.

2. The tenant shall cultivate the land in a proper manner and according to the scheme of
crop rotation laid down by and to the satisfaction of the syndicate and shall in all things
obey the reasonable orders Of the syndicate’s officials in all matters relating to the

cultivation, irrigation and harvesting of the said crops. The said scheme of crop rotation

177

shall allow the gowth by rain cultivation and subject to the prior requirements of the
cotton crop by irrigation water on a portion of the said land of a crop of dura sufficient
for and restricted the tenant’s own requirements. Provided that the tenant shall not sell
any part of the said crop and shall in no way neglect the cultivation of the cotton crop
for the sake of dura crop. Provided further that the tenant shall not remove nor permit
the removal of any stalks of such dura from the said land but shall ensure that they shall
be entirely consumed on the land by animals, and if the tenant shall remove any part of
such stalks or shall not introduce on to the said land animals in the opinions of the
Syndicates to consume such stalks within a reasonable period the syndicate may bring on
to the said land such animals for such period or periods as it thinks fit to ensure the
consumption of such stalks as aforesaid without prejudice to the provisions of condition
13 hereof.

3. The tenant shall at his own cost make the field channels (abu sittas) on his land and
shall bear the cost of the work done by the syndicate in excavating the part of the feeder
channels (abu ishreen) which abuts on his land to an extent not exceeding PT.25 per
chain (twenty meters) and shall during the tenancy keep the same in sound repair and
free from seepage or leaks.

4. The syndicate shall supply the plowing and other machinery necessary for the
cultivation of and shall carry out the plowing of the said land and the cost of such
plowing and the supply of such plowing and the supply of such machinery shall be
apportioned between the tenant and all the other cultivation tenants under the said
ordinance on a feddanage basis.

5. The Syndicate shall supply water necessary for irrigation of the said scheme of crop

rotation but if at any time by reason of breakdown of machinery, canals or other

178

irrigation work or any other compulsory circumstances the supply of water tO the said
land is interrupted, the tenant shall have no claim against the Syndicate for any
compensation on account of the water not reaching the land under cultivation.

6. The tenant during his tenancy shall comply with the sanitary regulations for the time
being in force and shall deliver back to the Syndicate the said land free of all cultivation
together with all gadwals clean and in proper working order on the first day Of June next.

7. Immediately upon harvesting the said cotton crop the tenant shall deliver it to the'

 

Syndicate at the Syndicate’s collection station at
8. If at any time the tenant is reasonably in need of an advance irn money or kind in
order to enable him to carry out his agicultural Obligations hereunder the Syndicate
shall, provided that it considers such a course businesslike and proper, make such
advances on such reasonable terms and to such an extent as the Syndicate shall in its
absolute discretion think fit.

9. The Syndicate shall sell and dispose of the cotton crop harvested and delivered by the
tenant as aforesaid together with that of all the other cultivating tenants under the said
ordinance for such prices and in such manner as it may think fit. The goss profits of
the said cotton crops shall be the sale price thereof realized as aforesaid after deduction
of the cost of transport, ginning and other expenses of sale or incurred for the benefit of
the said crop. 0f the said goss profits the cultivating tenant shall be entitled collectively
to 40 percent while the Syndicate shall retain the remaining 60 percent as the share of
the Syndicate and the Sudan government in satisfaction of rent, land tax, and expenses of
irrigation and management.

10 (I) There shall be opened for the said crop a tenants’ collective account to which shall

be credited the tenants collective 40 percent of the goss profits and any other sums

179

which from time to time may be transferred from the tenant’s reserve fund or which fall
to be credited to the tenants as a whole through the tenants collective account covering
the said crop.

(2) There shall be debited to the said collective tenants account:

(1) The total of the sums from time to time credited in the individual tenants’ accounts
kept by the Syndicate in respect of their share of the net divisible profits whether such
payment be in anticipation of or subsequent to the realization of the goss profits;

(2) The usual and proper tenants’ collective charges and expenses;

(3) The total of the debt balances appearing in individual tenants’ account kept by the
Syndicate as at the 30th June in the year covered by the tenants’ collective account in
question. Individual debit balances so dealt with shall thereafter be deemed to be debt
due by the individual tenant’s collective account.

(4) Any sum which may be transferred to the tenants reserve fund irn accordance with
the provisions of condition 12 hereof.

11. There shall be debited to the tenants’ collective account such sums as the government
and the Syndicate may agree should be so debited and paid into a tenants’ Reserve Fund
to be used for the benefit of the cultivation scheme under the said Ordinance for which
fund moneys have already been temporarily provided in advance by the government and
syndicate.

12. If the tenant neglects or is careless in the cultivation of his crops the Syndicates shall
have the right without the consent of the tenant to take such steps as the Syndicate may
consider proper for the safeguarding of the crops, and any expenses incurred thereby
shall be a debt from the tenant to the Syndicate and may without his consent be

deducted by the Syndicate from his share of the proceeds Of the crops. Further, if the

180

tenant neglects or is careless in the cultivation of his crops or neglects to carry the
reasonable orders of the syndicate’s officials in any of the aforesaid matters or fails to
comply with any of the other provisions of the government on the Syndicate, the
Syndicate shall have the right to terminate the tenancy forthwith without any
compensation to the tenant (except as hereinafter provided) and to hand over the land
and cultivation to a new tenant who shall take over the land and cultivation subject to
the debts to the Syndicate secured thereon but free from any claims by the old tenant
(except as hereinafter provided).

13. If the Syndicate terminate the tenancy under condition 13 hereof the Syndicate shall
as soon as the proceeds of the cotton crop become payable to the new tenant pay over
the old tenant out of such proceeds the value of the labor and capital put into the
cultivation of the said crop by the old tenant. Such value shall be assessed as soon as
possible, after the termination of tenancy by the Board composed of a nominee of the
outgoing tenant, a nominee of the incoming tenant and a nonninee of the Syndicate.

14. If in the opirnion of the Syndicate the tenant shall have committed a breach Of these
conditions warranting the cancellation of the annual renewal of his ageement, then the
Syndicate will give the tenant notice of the breach complained of and such notice shall be
delivered to the tenant not later than the first day of June irn the current year Of the
tenancy.

16. The English copy of the tenancy ageement and these conditions shall together form

the official contract. The Arabic translation thereof is merely for the information of the

tenant.

181
THE G IRA OR INANCE1927

Section 11(1) Except as hereinafter provided in sub-section (2) and (3) the owners of
every plot of land which is acquired by the government under this ordinance and which is
irrigated under the irrigation scheme shall have the right to take up within a reasonable
period after the date when water is first available for the said land under the said
irrigation scheme yearly cultivating tenancies of such areas as they themselves are in the
Opinion of the government competent to cultivate subject to the conditions hereafter set
out and in other respects upon the usual terms and conditions upon which from time to
time all cultivating tenancies within the area of the irrigation scheme shall be ganted
and they shall also be entitled to a renewal of the tenancies every season so long as they
shall have duly performed and Observed these conditions.

Section 13(1) Every sale, transfer, assignment or other disposition of crops gowing or

intended to be gown on land comprised within a cultivating tenancy or of the proceeds
thereof every mortgage or a charge by a cultivating tenant purporting to be secured by
such crops on the proceeds thereof shall, if made or created without the consent in
writing of the government be absolutely void and of no effect.
(2) Every transaction to which a cultivating tenant is a party whereby such a tenant is or
may become liable for the payment of any sum of money to the calculated by reference
either expressed or implied to the value of any crops gowing or intended to be gown on
the land comprised within a cultivating tenancy shall, if entered irnto without the consent
in writing of the government, be absolutely void and of no effect.

Section 13(3) no action shall lie for the recovery of any moneys claimed to be payable
under any transaction made void under the provisions of sub-sections (l) and (2) whether

the sale, transfer or assignment or other disposition relates solely on the proceeds

182

thereof mortgaged or charged are alleged to be the sole security or only part of the
security for such moneys or whether the value of the crops is the sole basis or is only
partly the basis for calculating the amount of such moneys.

4. No execution under the provisions of order XV of schedule I to the civil Justices
ordinance shall be ganted by seizure and sale of the crops of any cultivating tenancy;
and save with the consent Of the governor or commissioner appointed under this
ordinance no such execution shall be ganted by attachment of any sum due to a
cultivating tenantin respect of the proceeds of or any part of the proceeds of the crops
of his cultivating tenancy except in the cases following; that is to say (a) an execution Of
an order to pay maintenance alimony or other family allowances made by a court of a
competent authority against such cultivating tenant; (b) an execution of a decree for the
payment Of a sum of money due by such cultivating tenant to a laborer for wages in
respect of labor performed by such a laborer on a cultivating tenancy; and (c) an
execution of a decree for the payment of a sum of money due by such cultivating tenant
in respect of any transaction mentioned in sub-sections (l) and (2) to which the consent

in writing of the government has been Obtained.

APPENDIX B

STANDARD PRACTICES ON THE GEZIRA RESEARCH FARM

10.

183

APPENDIX B
STANDARD PRACTICES ON THE GEZIRA RESEARCH FARM
COTTON
VARIETIES: Shambat (MS), Barakat (LS).
W June
The fallow preceding cotton is plowed after the rains. This prevents weeds from
seeding. ClOd-crushing, levelling, ridges, gadwals, tagnats and re-ridging are
necessary.
W
Pre-watering follows ridging to prevent weed infestation that could seed from one
watering.
W
2N per feddan of urea is broadcasted evenly a week after sowing. Machine
distributors can be used.

Abavit B plus 30 percent dieldrin at the rate of 3 gams per pound of seed for
protection against bacterial blight and flea beetles.

SQMNQ July 15, - August 15.

Sowing is done by seluka on top of the ridge. It starts at the beginning of August.
Light watering may be necessary to facilitate germination.

Spacing is 80 cm x 50 cm. Spacing for a late sowing is 80 cm X 30 cm. 6-10 seeds
per hole and a seed rate of 20 pounds that include resowing reserve.
M August

Commences immediately after germination not later than 14 days after the
original sowing.

Carried out during the 4 weeks after sowing. Bait is applied for termite control.
THEME , .
Diseased and weak plants are thinned leaving 3 plants per hole. Thinned out
plants have to be removed from the farm. .

w September - November

Essential during the early stages of gowth. Presowing weeding is necessary.
WAIIIE BINQ

Light waterings are given during the rainy season. Flooded plots have to be
drained as soon as soon as possible. After the rains, normal irrigations should be
about 400 cubic meters per feddan at a regular 14 day interval. Heavy watering is
necessary at the time of fruit formation. Watering should stop by the end of
March.

PICKING January - March

Picking begins in January and continues every 14 days till complete. Seed cotton is
packed in sacks to the collection station for transportation to the ginneries.
W April

The cotton stalks are uprooted, heaped and burnt. Cotton ratoon and volunteer
crops have to be eliminated by May.

14.

184

HELD
Highest yields are 12 Kantars/feddan for Shambat and 7.9 Kantars/feddan for

Barakat.

WHEAT

VARIETIES: Condor, Debeira

W September

Plowing, clod-crushing and levelling wheat is very susceptible to water-logging.
Proper levelling reduces the risk and improves the efficiency of irrigation.
Prewatering two weeks before sowing to control weeds, provide good seed bed
and more efficient future irrigation.

W

Before planting treat with Dieldrex B at the rate of l gam for each pound of
seed for protection from termites and fungal diseases.

W October 15, - November 15.

Sowing is carried out on the flat by seed drilling. The gadwals, tagnats and sub-
plots are made after seed drilling. Mechanical planting is recommended for
superior wheat stands.

S IN S

Planted in rows 20 cm apart. Seed rate is 50 Kg/feddan.

W At SOWing

2N of urea per feddan broadcasted at the time of sowing.

W October 16, - February 30.

10 irrigations are required. Commences immediately after sowing and then at a 14
day interval. Care has to be taken to avoid wash out of seeds by the earlier
irrigations.

w

Well prepared seed bed minimizes weed infestation. High plant population and
presowing weeding. Hand weeding is required during the early stages Of gowth.
W March 1-30

Delay in harvesting results in losses through shattering and lodging. Harvesting is
by combines.

YIELD

Maximum yield under research conditions is one ton per feddan.

GROUNDNUTS.

VARIETIES: Ashford, baberton

W May

Groundnuts follows cotton in the rotation. The usual operations are plowing,
clod-crushing, levelling and ridging 60 cm apart.

W Before Planting

Dieldrex B at the rate of one gam for each pound of kernel for protection
against fungi and termites.

SQWINQ June 1-20

Highest yields are obtained from the earliest sowing dates.
W

Grown on ridges spaced 60 cm apart. Planted in holes 15 cm apart, 2-3 kernels
per hole using a sowing stick. The seed rate is 50 kgs of shelled seed per feddan.

 

10.

185
W June 16 - October 15

8 irrigations are recommended starting with sowing at a 14 day interval. Avoid
water logging in the rainy season. A light irrigation before harvest will facilitate
hand lifting.

W June 20-30

Done three weeks after sowing and before flowering.

w July 20, - August 30

Weeding should be done three weeks after planting.

LEM November 10-30

Lifting is done by hand following a light irrigation. Delayed lifting can cause
shedding Of mature nuts during the Operation whereas early harvesting results in
small unfilled nuts.

W

Groundnuts are stacked and the dry pods are stripped Off, cleaned from adhering
soil by rubbing against each other and bagged.

YIELD

The highest yield Obtained under research conditions is 1.22 tons per feddan.

SORGHUM

VARIETIES: Hegari, white milo, Feterita and Hageen Dura 1.

m2 PREPARATION June

Plowing clod-crushing and levelling gadwals and tagnats are made after planting
when the seed is drilled.

W Before Sowing

Seed treated with fernasan D at the rate of one gam for every pound of seed for
protection against soil pests, smut and other fungi.

some July 1-15

Sowing in early July results in high yields and freedom from rrnidge and aphids.
Sowing is on a flat bed using a seed drill or broadcasting
W

Grown on ridges spaced 80 cm apart with a spacing Of 50 cm between plant holes
made by the Seluka. The seed rate is 12 pounds per feddan giving 6-8 plants per
hole.

we July 10-15

Resowing is carried out not later than 14 days after the original sowing.

Thinning can be done to reduce the plant population.

EEKIEIZER August 1-10

IN as urea is broadcasted one month after sowing followed by an irrigation. Need
to eradicate early weeds before fertilizer application.

IRRIGATION July 16, - October 15

During the rains water is given according to the crop weeds. 4 irrigations are
necessary at 14 day interval following the end of the rains. Avoid over irrigation

because sorghum is susceptible to water lodging. Stop irrigation 14 days before
harvest.

10.

186

m August 15, - September

Weeding is thorough by a hand hoe. nggg is removed and fed to animals or
burnt. Close spacing and nitrogen application help reduce the number of weeding
as the crop canopy can smother weeds. .
W October 16, - November 15

The heads are cut two inches below the lowest gain and are fed into a stationary
combine for threshing. The sorghum straw is cut and used as animal feed or
building shelters for workers. Stubble is gazed over by cattle and sheep.

YIELD Maximum research conditions yield is 0.92 tons/feddan.

APPENDIX C

EXPLANATIONS OF ABBREVIATIONS USED IN THE LP MATRIX

187

APPENDIX C EXPLANATION OF ABBREVIATIONS USED IN LP MATRIX

ROW N UMBER

RESOURCES (RQWS)

W

LANT Total land

LANF Fallow land

LANC Cotton land

LANW Wheat land

LAGS Groundnuts/ Sorghum land
JUN June hire labor

JUL July hire labor

AUG August hire labor

SEP September hire labor
OCT October hire labor

NOV November hire labor

DEC December hire labor

JAN January hire labor

FEB February hire labor

MAR March hire labor ‘

APR April hire labor

MAY May hire labor

JUNW June water

JULW July water

AUGW August water

SEPW September water

OCTW October water

N OVW November water

DECW December water

JANW January water

FEBW February water

PMSC Produce cotton MS

PISC Produce cotton LS

PWHT Produce wheat

PGNT Produce goundnuts
PISO Produce local sorghum
PHSO Produce hybred sorghum
MSBR Minimum subsistence requirement
JUNC June Operating capital
JULC July Operating capital
AUGC August operating capital
SEPC September Operating capital
OCT C October Operating capital
NOVC November Operating capital
DECC December Operating capital
JANC January operating capital
FEBC February Operating capital
MARC March operating capital
APRC April operating capital
MAYC May operating capital
ENDC End of operating capital
RPBM Repay borrowed money

188
EXPLANATIONS OF ABBREVIATIONS USED IN LP MATRIX

W
W W12 W
1 FALL Fallow land
2 MSCI Grow medium staple cotton 1
3 MSC2 Grow medium staple cotton 2
4 LSC1 Grow long staple cotton 1
5 LSC2 Grow long staple cotton 2
6 WHTl Grow wheat 1
7 WHT2 Grow wheat 2
8 GNTI Grow goundnuts 1
9 GNT2 Grow goundnuts 2
10 L801 Grow local sorghum l
11 LS02 Grow local sorghum 2
12 H801 Grow hybrid sorghum 1
13 H802 Grow Hybrid sorghum 2
14 JUNL June hired labor
15 JULL July hired labor
16 AUGL August hired labor
17 SEPL September hired labor
18 OCTL October hired labor
19 N OVL November hired labor
20 DECL December hired labor
21 JANL January hired labor
22 FEBL February hired labor
23 MARL March hired labor
24 APRL April hired labor
25 MAYL May hired labor
26 SMSC Sell medium staple cotton
27 SLSC Sell long staple cotton
28 SWHT Sell wheat
29 SGNT Sell goundnuts
30 SLSO Sell local sorghum
31 SHSO Sell hybrid sorghum
32 BISO Buy local sorghum
33 CLSO Consume local sorghum
34 JNKT June capital transfer
35 JLKT July capital transfer
36 AGKT August capital transfer
37 SPKT September capital transfer
38 OTKT October capital transfer
39 NVKT November capital transfer
40 DCKT December capital transfer
41 JAKT January capital transfer
42 FBKT February capital transfer
43 MRKT March capital transfer
44 APKT April capital transfer
45 MYKT May capital transfer
46 KT Capital transfer
47 BMJN Borrow money in June
48 BMJL Borrow money in July
49 BMAG Borrow money in August

189

Borrow money in September
Borrow money in October
Borrow money irn November
Borrow money in December
Borrow money in January
Borrow money in February
Borrow money in March
Borrow money in April
Borrow money in May
Repay borrowed money

190

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132
771 W

The standard tenancy size in the Gezira is 20 feddans in a single field. The survey
reveals that 80 percent of the tenants possess the standard tenancy size. The Board’s
policy limits the available land for each crop to the area specified by the rotation pattern.
772 W

Collinson (1983) asserts that both labor availability and use need to be treated as
flows which are only meaningful at a point in time. The usual techniques tend to assume
a theoretical level of availability as a constant constraint on the Observed usage at peak

periods can be accepted as a linnit throughout the season. This study employs the

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

T TABLE 7.7 FAMILY AND HIRED LABOR IN MAN-DAYS PER FEDDAN.
PERIOD \ DEMAND FAMILY HIRED
June 15 35
July 15 35
August 15 35
September 15 35
October ‘ 15 35
November 15 35
December 15 35
January 25 90
February 25 90
March 25 90
April 15 35
May 15 35
TOTAL 210 585
Source: Compiled from survey data.

 

 

 

   

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