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6/01 c:/C|FiC/DateDue.p65-p.15

PROFITABILITY ANALYSIS OF BEAN PRODUCTION IN

HONDURAS

By

Chhime Tshering

?L044 (.3) PCL? £13..

MASTER’S RESEARCH PAPER

Submitted to
Michigan State University
in partial fulfillment of the requirements

for the degree of

MASTER OF SCIENCE

Department of Agricultural Economics
2002
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Profitability Analysis of Bean Production in Honduras
By
Chhime Tshering

W

In Honduras, dry beans are the second most important staple crop, next to maize, in
terms of both production and consumption. During the past decade, agricultural scientists in
Honduras, in collaboration with Bean/Cowpea CRSP scientists, have released numerous new
varieties, developed improved bean-management practices, and actively worked with
governmental agencies, NGOs, and farmer groups to ensure that these improved technologies
are widely available to farmers. However, data on national bean production in Honduras fail
to demonstrate that agricultural research has had an impact on bean production, yields, and
area harvested. Given the situation, profitability analysis represents an alternative approach
for assessing the farm-level impact of research.

This study analyzes the record keeping data collected from Honduran bean farmers in
the main bean-growing regions during the period 1998-2000. The study assesses cost and
pattern of input and labor use, and analyzes the profitability of bean production for farmers
growing traditional and improved bean varieties. Further, the study identifies ways to
improve record keeping studies to reduce the cost of future data collection.

The analysis showed that among the sample of farmers included in the record keeping
surveys, farmers growing modern. varieties had higher average yields and earned higher
profits or suffered less loss than the farmers growing traditional varieties. However, the
difference in yield for the traditional and modern farmers was statistically not significant (at
5% significance level) for three out of five of the data sets. The sensitivity analyses on
enterprise gross margin showed that for traditional farmers, gross margins were more
sensitive to yield and price changes than for modern farmers. The study found that none of
the farmers in the sample completely followed the recommended practices for bean
production and that the major share of the total production cost consisted of labor cost.

It recommendsthat in the future, efforts to assess profitability should utilize a single-
round (post-harvest) or a two-round (mid-season and post-harvest) survey and the sample

size should be increased to at least 26 farmers for each farmer group (i. e., adopters and non-

adopters of improved bean varieties). Furthermore, it is recommended that the standard labor
parameters--which were computed from the pooled data sets--should be used to estimate total
labor cost and labor cost by type of farming operations. The study suggests that in the future,
possible farmers to be included in the survey should be pre-screened to insure that all
“traditional” and all “modern” farmers are relatively homogenous with respect to inputs used
and the sample should include only farmers with a bean area of 0.50 hectare or more. Finally,
additional research is needed to better understand what factors are responsible for the high
variability in farmers yields, why few farmers follow the recommended bean production
practices, whether or not these recommended practices are appropriate for limited-resource
farmers who grow beans in marginal environments, and the potential for identifying labor-

saving technologies that are appropriate for small-scale bean formers in Honduras.

ii

ACKNOWLEDGEMENT

I would like to acknowledge the support of several people and institutions that
contributed to the completion of my Masters Program at the Michigan State University.

First, I would like to express my heartfelt thanks and gratitude to my major professor,
Dr. Richard Bernsten, for all his support, encouragement, and excellent supervision in the
process of designing and writing this research paper. I am highly grateful to Dr. Bernsten for
making the farm record keeping data available for my research.

Many thanks are also due for my committee members, Dr. Eric Crawford, Dr. Irvin
Widders and Dr. Stephen Harsh, for their kind support and valuable comments. Dr. Eric
Crawford’s suggestions and comments in the profitability analysis were very helpful.

I would like to thank Dr. Juan Carlos Rosas, Escuela Agricola Parmericana (El
Zamorano), for allowing me to use the Honduran record keeping, which was collected by his
staff, and for providing supplemental information about the record keeping sample.

I Would like to acknowledge and thank the USAID Bean/Cowpea CRSP Project
(contract # DAN-G-FF-86-0000-8-00) for funding this study.

I would like to extend my gratitude and appreciation to the Ministry of Agriculture,
Royal Government of Bhutan, for giving me the opportunity and supporting my studies at the
Michigan State University.

Many thanks to David Mather and Pejuan Uceles Wolfgang for sharing information
related to my research, helping me in translate the data sets from Spanish to English, and for
making valuable comments on my drafts.

Finally, I would like to thank the graduate students of the Department of Agricultural
Economics and my friends at MSU for their moral and academic support, which I highly

value.

TABLE OF CONTENTS
CHAPTER I. INTRODUCTION
1.1 Problem Statement
1.2 Objectives
1.3 Thesis Outline

CHAPTER H. AN OVERVIEW OF HONDURAS, ECONOMY, AGRICULTURE
AND THE BEAN SUBSECTOR
2.1 Overview of Honduras
2.1.1 Land and Climate
2.1.2 Social Indicators
2.1.3 Honduras Government
2.1.4 The Honduran Economy
2.2 The Agriculture Sector
2.2.1 Major Crops
2.2.2 Government Policies Affecting Agriculture Sector
2.3 The Bean Subsector ‘
2.3.1 Beans in the Honduran Diet
2.3.2 Consumer Preferences
2.3.4 Domestic Consumption
2.3.5 Bean Export and Import
2.3.6 Production Analysis
2.3.7 Production System, Farm Size and Commercial Orientation
2.3.8 Production Inputs, Credits and Extension
2.3.9 Bean Marketing System

CHAPTER III. LITERATURE REVIEW, DATA COLLECTION AND
METHODOLOGY

3.1 Literature Review

3.2 Data Collection

3.3 Data Analysis

iv

PAGE

\OOOQQMUI

10
ll
l3
13
14
l4
17
19
24
25
29

32
34
36

3.4 Characteristics of the Study Area

CHAPTER IV. PROFITABILITY ANALYSIS OF BEAN PRODUCTION

4.1

Socio-economic Characteristic of the Sample Farmers

4.2 Department: Yoro, Honduras, Postrera 2000

4.3

4.4

4.5

4.6

4.7

4.2.1 Patterns and Cost of Labor Use

4.2.2 Patterns and Costs of Input Use

4.2.3 Profitability Analysis

4.2.4 Sensitivity Analysis

Department: Yoro, Honduras, Primera 2000
4.3.1 Patterns and Cost of Labor Use

4.3.2 Patterns and Costs of Input Use

4.3.3 Profitability Analysis

. 4.3.4 Sensitivity Analysis

Department: Olancho, Honduras, Postrera 1999
4.4.1 Patterns and Cost of Labor Use

4.4.2 Patterns and Costs of Input Use

4.4.3 Profitability Analysis

4.4.4 Sensitivity Analysis

Department: Olancho, Honduras, Primera 1999
4.5.1 Patterns and Cost of Labor Use

4.5.2 Patterns and Costs of Input Use

4.5.3 Profitability Analysis

4.5.4 Sensitivity Analysis

Department: El Paraiso, Honduras, Primera 1998
4.6.1 Patterns and Cost of Labor Use

4.6.2 Patterns and Costs of Input Use

4.6.3 Profitability Analysis

4.6.4 Sensitivity Analysis

Summary of Empirical Results

4.7.1 Yield and Prices

39

41
42
42
46
48
51
52
52
56
58
61
63
63
67
69
72
74
74
78
80
83
85
85
89
91
93
95
95

4.7.2 Cost of Production
4.7.3 Labor Use and Cost
4.7.4 Use of Inputs and Cost
- 4.7.5 Revenue and Returns
4.7.6 Sensitivity Analysis

4.7.7 Modern versus Traditional Farmers

CHAPTER V. IMPLICATIONS FOR FUTURE RECORD KEEPING ANALYSIS
5.1 Yield Difference, Significance and the Sample Size
5.2 Standard Labor Parameters by Operation

5.3 Farmers Actual Practices and the Recommended Practices

CHAPTER VI. SUMMARY, RECOMMENDATIONS FOR FUTURE RECORD
KEEPING AND FUTURE RESEARCH

6.1 Summary

6.2 Recommendations for Future Record Keeping

6.3 Future Research
APPENDIX

BIBLIOGRAPHY

vi

95
96
97
97
98
98

100
104
107

108
109
111

BAN ADESA

CIF
CRSP
DICTA

EGM
F AO
FOB
GDP
GI
IADP

LMDSA

MNR

MV

NGO
PROFRIJOL

RK
RFL
SAG
SAP
SD
TEC
TV

ACRONYMS AND ABBREVIATIONS

National Agriculture DeVelopment Bank (Banco Nacional de Desarrollo
Agricola)

Cost Insurance and Freight

Bean and Cowpea Collaborative Research Support Program

Directorate Research, Science and Agricultural Technology (Direccion de
Investigacion C iencr'a y T ecnologia A gropecuaria)

Enterprise Gross Margin

Food and Agricultural Organization

Freight on Board

Gross Domestic Product

Gross Income

Inter-American Development Bank

Honduran Agricultural Marketing Institute (Instituto Hondureno de Mercadeo
Agricola)

Law for the Modernization and Development of the Agricultural Sector (Ley
de Modemizacion y Desarrollo del Sector A gropecuario)

Ministry of Natural Resources

Modern Varieties

Non-Govemmental Organization

Regional Bean Research Program (Programa Cooperativo Regional de

Investigacion en Frijol)

Record Keeping

Return to Family Labor
Ministry of Agriculture (Secretaria de A gricultura)

. Structural Adjustment Program

Standard Deviation

Total Enterprise Cost

. Traditional Varieties

vii

Table 2.1

Table 2.2
Table 2.3

Table 2.4
Table 3.1
Table 4.1
Table 4.2.1.1
Table 4.2.1.2
Table 4.2.1.3
Table 4.2.1.4
Table 4.2.1.5
Table 4.2.2.1
Table4.2.3.1
Table 4.2.3.2
Table 4.2.4.1

Table 4.2.4.2

Table 4.3.1.1

LIST OF TABLES
Contributions to the Agricultural GDP by Principal Products 1989-1991
Compared to 1996-1998, Honduras.
Honduran Total and per Capita Bean Consumption, 1980-1999.
Average Annual Per Capita Consumption and Nutritional Contribution of
Bean in Central American Countries, 1997-99.

Average Bean Supply and Consumption in Central American Countries,

. 1997-1999.

Location, Department and Sample size by Season/Year and Farmer Type.

Socio-economic Characteristics of the Sample Farmers, Honduras.

Labor Use (Average man-days/ha), Posteara 2000, Yoro, Honduras.

Sum and Percentage of Traditional Farmers (N=13) Family, Hired and Total
Labor Use (man-days/ha) by Operation, Postrera 2000, Yoro.

Sum and Percentage of Modern Farmers (N=6) Family, Hired and Total
Labor Use (man-days/ha) by Operation, Postrera 2000, Yoro.

Sum and Percentage of Traditional Farmers (N=13) Family, Hired and Total
Labor Cost (U S$/ha) by Operation, Postrera 2000, Yoro.

Sum and Percentage of Modern Farmers (N=6) Family, Hired and Total
Labor Cost (U S$/ha) by Operation, Postrera 2000, Yoro.

Average Quantity and Cost of Input Use Per Hectare by Type of Farmer,
Postrera 2000, Yoro, Honduras.

Average Yields, Prices, Costs and Returns by Type of Farmers, Postrera
2000, Yoro, Honduras.

Average Total Enterprise cost (U S$/ha), Postrera 2000, Yoro, Honduras.

Traditional Farmers: Sensitivity Analysis on Enterprise Gross Margin with
Changing Bean Yield and Price, Postrera 2000, Yoro, Honduras.

Modern Farmers: Sensitivity Analysis on Enterprise Gross Margin with
Changing Bean Yield and Price, Postrera 2000, Yoro, Honduras.

Labor Use (Average man-days/ha), Primera 2000, Yoro, Honduras.

viii

Page

11
15

16

17

35

41

43

44

45

46

46

48

50

50

51

52
53

Table 4.3.1.2

Table 4.3.1.3

Table 4.3.1.4

Table 4.3.1.5

Table 4.3.2.1

Table4.3.3.1

Table 4.3.3.2
Table 4.3.4.1

Table 4.3.4.2

Table 4.4.1.1
Table 4.4.1.2

Table 4.4.1.3

Table 4.4.1.4

Table 4.4.1.5

Table 4.4.2.1

Table 4.4.3.1

Table 4.4.3.2

Sum and Percentage of Traditional Farmers (N=6) Family, Hired and Total
Labor Use (man-days/ha) by Operation, Primera 2000, Yoro.

Sum and Percentage of Modern Farmers (N=12) Family, Hired and Total
Labor Use (man-days/ha) by Operation, Primera 2000, Yoro.

Sum and Percentage of Traditional Farmers (N=6) Family, Hired and Total
Labor Cost (U SS/ha) by Operation, Primera 2000, Yoro.

Sum and Percentage of Modern Farmers (N=12) Family, Hired and Total
Labor Cost (U SS/ha) by Operation, Primera 2000, Yoro.

Average Quantity and Cost of Input Use Per Hectare by Type of Farmer,
Primera 2000, Yoro, Honduras.

Average Yields, Prices, Costs and Returns by Type of Farmers, Primera
2000, Yoro, Honduras.

Average Total Enterprise Cost (USS/ha), Primera 2000, Yoro, Honduras.
Traditional Farmers: Sensitivity Analysis on Enterprise Gross Margin with
Changing Bean Yield and Price, Primera 2000, Yoro, Honduras.

Modern Farmers: Sensitivity Analysis on Enterprise Gross Margin with
Changing Bean Yield and Price, Primera 2000, Yoro, Honduras.

Labor Use (Average man-days/ha), Posteara 1999, Olancho, Honduras.
Sum and Percentage of Traditional Farmers (N=9) Family, Hired and Total
Labor Use (man-days/ha) by Operation, Postrera 1999, Olancho.

Sum and Percentage of Modern Farmers (N=11) Family, Hired and Total
Labor Use (man-days/ha) by Operation, Postrera 1999, Olancho.

Sum and Percentage of Traditional Farmers (N=9) Family, Hired and Total
Labor Cost (U SS/ha) by Operation, Postrera 1999, Olancho.

Sum and Percentage of Modern Farmers (N=11) Family, Hired and Total
Labor Cost (U S$lha) by Operation, Postrera 1999, Olancho.

Average Quantity and Cost of Input Use Per Hectare by Type of Farmer,
Postrera 2000, Yoro, Honduras.

Average Yields, Prices, Costs and Returns by Type of Farmers, Postrera
1999, Olancho, Honduras.

Average Total Enterprise cost (U S$/ha), Postrera 1999, Olancho, Honduras.

ix

54

55

56

56

58

60
61

62

62

65

66

67

67

69

71
71

Table 4.4.4.1

Table 4.4.4.2

Table 4.5.1.1
Table 4.5.1.2

Table 4.5.1.3

Table 4.5.1.4

Table 4.5.1.5

Table 4.5.2.1

Table 4.5.3.1

Table 4.5.3.2
Table 4.5.4.1

Table 4.5.4.2 ~

Table 4.6.1.1
Table 4.6.1.2

Table 4.6.1.3

Table 4.6.1.4

Table 4.6.1.5

Traditional Farmers: Sensitivity Analysis on Enterprise Gross Margin with
Changing Bean Yield and Price, Postrera 1999, Olancho, Honduras.
Modern Farmers: Sensitivity Analysis on Enterprise Gross Margin with
Changing Bean Yield and Price, Postrera 1999, Olancho, Honduras.

Labor Use (Average man-days/ha), Primera 1999, Olancho, Honduras.

Sum and Percentage of Traditional Farmers (N=10) Family, Hired and Total
Labor Use (man-days/ha) by Operation, Primera 1999, Olancho.

Sum and Percentage of Modern Farmers (N=9) Family, Hired and Total
Labor Use (man-days/ha) by Operation, Primera 1999, Olancho.

Sum and Percentage of Traditional Farmers (N=10) Family, Hired and Total
Labor Cost (U SS/ha) by Operation, Primera 1999, Olancho.

Sum and Percentage of Modern Farmers (N=9) Family, Hired and Total

Labor Cost (U S$lha) by Operation, Primera 1999, Olancho.

Average Quantity and Cost of Input Use Per Hectare by Type of Farmer,
Primera 1999, Olancho, Honduras.

Average Yields, Prices, Costs and Returns by Type of Farmers, Primera
1999, Olancho, Honduras.

Average Total Enterprise Cost (USS/ha), Primera 1999, Olancho, Honduras.
Traditional Farmers: Sensitivity Analysis on Enterprise Gross Margin with
Changing Bean Yield and Price, Primera 1999, Olancho, Honduras.
Modern Farmers: Sensitivity Analysis on Enterprise Gross Margin with
Changing Bean Yield and Price, Primera 1999, Olancho, Honduras.

Labor Use (Average man-days/ha), Primera 1998, El Paraiso, Honduras.
Sum and Percentage of Traditional Farmers (N=6) Family, Hired and Total
Labor Use (man-days/ha) by Operation, Primera 1999, El Paraiso.

Sum and Percentage of Modern Farmers (N=14) Family, Hired and Total
Labor Use (man-days/ha) by Operation, Primera 1998, El Paraiso.

Sum and Percentage of Traditional Farmers (N=6) Family, Hired and Total
Labor Cost (U SS/ha) by Operation, Primera 1998, El Paraiso.

Sum and Percentage of Modern Farmers (N=14) Family, Hired and Total
Labor Cost (U S$fha) by Operation, Primera 1998, El Paraiso.

73

73
75

76

77

78

78

8O

82
82

83

84
85

86

87

88

88

Table 4.6.2.1
Table 4.6.3.1
Table 4.6.3.2
Table 4.6.4.1
Table 4.6.4.2
Table 5.1.1
Table 5.1.2
Table 5.2.1
Table 5.3.1
APPENDIX
Appendix 1.
Appendix 2.
Appendix 3.
Appendix 4.
Appendix 5.
Appendix 6.

Appendix 7.

Average Quantity and Cost of Input Use Per Hectare by Type of Farmer,
Primera 1998, El Paraiso, Honduras.

Average Yields, Prices, Costs and Returns by Type of Farmers, Primera
1998, El Paraiso, Honduras.

Average Total Enterprise Cost (USS/ha), Primera 1998, El Paraiso,
Honduras. '

Traditional Farmers: Sensitivity Analysis on Enterprise Gross Margin with
Changing Bean Yield and Price, Primera 1998, El Paraiso, Honduras.
Modern Farmers: Sensitivity Analysis on Enterprise Gross Margin with
Changing Bean Yield and Price, Primera 1998, El Paraiso, Honduras.
Average Yield and Significance by Type of Farmer, Season/Y ear and
Location. A

Sample Size Required Using the Actual Mean Difference and the
Population Standard Deviation.

Estimated Standard Parameters of labor Use (Mean nd the Median) per
Hectare Bean Farm, for Labor Cost Calculation, by Type of Operation.
The Mean and the Range of Input Quantities and the Recommended
Quantities and Applications (N=96).

Information on Topography, Rainfall and Distance from the Nearest City.
Average Yield Difference Between Traditional and Modern Farmers by
Season/Y ear, Honduras.

Per Unit Cost of Production for Traditional and Modern Farmers by
Season/Y ear, Honduras.

Total Enterprise Cost and its Components for all the Data Sets by Type of
Farmer, Honduras.

Traditional Farmers’ Gross Income (GI), Enterprise Gross Margin (EGM),
and Return to Land and Management (RLM) by Season/Year, Honduras.
Modern Farmers’ Gross Income (GI), Enterprise Gross Margin (EGM), and
Return to Land and Management (RLM) by Season/Year, Honduras.
Validation of Bean Production Profitability Using Standard Labor

xi

9O

92

93

94,

94

101

102

105

108

114

115

115

116

117

117

Appendix 8.

Appendix 9.
Appendix 10.
Appendix 11.

Parameters (using median from the pooled data sets).

Validation of the Bean Production Profitability Using Standard Labor

Parameters (using mean from the pooled data sets).

Average Bean Yield, Price, Gross Income and Returns.

Average Bean Seed Rate, Prices and Total Seed Cost for all Data Sets.

Yield Distribution (for both traditional and modern farmers) by

Season/Year.

xii

118

119

120

121

122

Figure 2.1
Figure 2.2
Figure 2.3
Figure 2.4
Figure 2.5
Figure 2.6
Figure 2.7
Figure 2.8

LIST OF FIGURES
Area Harvested of Major Crops in Honduras, 1990-2001.
Share of Average Total Regional Bean Consumption for 1997-1999.
Dry Bean Trade of Honduras, 1980-1999.
Country Shares of Bean Exports in Central America, 1990-1999.
Average Area Harvested for Major Cereals in Honduras, 199-2001.
Honduran Dry Bean Production and Area Harvested, 1980-2000.

Central American Average Bean Production by Country, 1998-2000.

Honduras: Bean Yield in MT, 1990-2000.

xiii

Page
10
16
l 8
19
21
22
23
24

CHAPTER I
INTRODUCTION

1.1 Problem Statement

In Honduras, dry beans are the second most important staple crop, next to maize, both in
terms of production and consumption. The majority of the bean producers own less than five
hectares of land. These small farmers produce 36% percent of Honduras’ corn crop and 40% of
the bean crop. These crops are the major source of protein for both rural and urban population.

Since the initiation of structural adjustment programs in early 19903, government support
to the Ministry of Natural Resources (MNR) for technology generation and extension had
decreased considerably. As a result, increased pressure has been placed on. collaborative research
programs like the Bean/Cowpea Collaborative Research Support Program (CRSP) to support
research and extension activities.

During the past decade, agricultural scientists in Honduras, in collaboration with
Bean/Cowpea CRSP scientists have released numerous new varieties, developed improved bean
management practices, and actively worked with governmental agencies, Non-Govemmental
Organizations (NGOs), and farmer groups to ensure that these improved technologies are widely
available to farmers (Bemsten et. al., 2000). However, analysis of aggregate national bean data
for Honduras fail to demonstrate that agricultural research has had an impact on national
production, yields, and area harvested. However, fluctuations in production, as reflected in time
series data may be due to year-to-year variations in abiotic/biotic stress.

Given the situation, profitability analysis represents an alternative approach for assessing
the farm-level impact of research. Since 1998, farm record keeping (RK) data has been collected

by staff at Escuela Agricola Panamericana (El Zamorano). These data will be used for the

profitability analysis. Besides profitability assessment, farm records can provide insights into
farmers’ input use and crop production problems. In addition, they can serve as an indicator of
performance and measure of management improvement on the farm.

With regard to the RK data collection process, samples of approximately 20 farmers were
selected (1998-2000), to represent traditional bean variety growers and modern bean variety
growers. An enumerator visited each farmers at least twice a month throughout the season, to
record information about bean operation, including inputs applied (type, amount, cost), labor
used (male, female, hired, family, wage rate), and machinery used (hours, cost). However, the
task proved time consuming and expensive. Therefore, there is a need to explore other
approaches to reduce the amount of information to be collected, which would reduce the number
of enumerator visits. One possibility could be to identify data/information that do not vary from
year-to-year in order to come up with standard parameters that could be used in the fixture. If it is
possible to reduce the amount of data to be collected from each farmer, it would be possible to
increase the sample size, thereby giving more representative and statistically significant results.

Thus, given the importance of assessing the profitability of new bean technologies and
the limitations associated with the farm RK data collection, there is a need to firrther explore

options for improving the process for collecting and analyzing farm RK data.

1.2 Objectives
The general objective of this study is to assess the characteristics and profitability of bean
production in Honduras and to identify ways to improve future Record Keeping studies, to

reduce the cost of data collection.

Specific Objectives

0 Estimate the per hectare cost of production, profits and returns to capital and labor.

0 Analyze farmers’ patterns of labor and input use, in order to estimate production costs,
assess the types and level of technologies used, and identify the degree to which farmers
follow the recommended bean production practices.

0 Carry out sensitivity analysis to identify the most important determinants of profitability.

0 Estimate standard labor parameters, for various operations in bean production, in order to
minimize farm record information to be collected in the fiJtUl’C.

o Validate the new procedures by using the standard labor parameters to reestimate
profitability using the original data sets.

0 Make recommendations regarding the type of data and the sample size required to
achieve various level of confidence and detect varying levels of yield differences in the

future that are statistically significant.

1.3 Thesis Outline

This study is divided into five chapters. Chapter I provides background about the research
issues and identifies the research objectives. Chapter 11 provides an overview of Honduras, its
general economy, agriculture sector and the performance of bean subsector. Chapter III discusses
literature review, data collection and the methods of analysis. Chapter IV characterizes the
socioeconomic characteristics of the sample farmers, discuses the farmers’ patterns of labor use,
input use, and cost, followed by profitability and sensitivity analysis for each data sets and a

summary of the empirical results. Chapter V discusses the implications for fiiture record keeping

analysis, and Chapter VI presents a summary and recommendations for firture record keeping

and future research.

CHAPTER II

AN OVERVIEW OF HONDURAS, HONDURAN ECONOMY, AGRICULTURE AND

THE BEAN SUBSECT OR

2.1 Overview of Honduras:

2.1.1 Land and Climate:

The Republic of Honduras, located in Central America, stretches 175 miles across the
isthmus from the Caribbean Sea to the Gulf of Fonseca on the Pacific Ocean. Honduras borders
Guatemala on the northwest, El Salvador on the southwest, and Nicaragua on the southeast (Map
1). The country covers a total area of 43,278 square miles-about the size of Louisiana.

Based on physical geography, Honduras can be divided into three regions: the western
and the central highlands, Costa de Mosquitos (La Mosquitia) in the east, and the north coast (La
Costa Norte), including the Bay Islands (Islas de la Bahia) just offshore (The Latin American
Alliance', 2001). LaMosquitia is a region of pine savannas, coastal lowlands and shallow
lagoons. In spite of extensive deforestation since the mid 19603, Honduras remains heavily
forested. The central and western highlands are pine covered, and the eastern lowlands and the
north coast have tropical hardwoods. The Olancho Forest Reserve is the largest pine forest in
Latin America (CultureGramsz, 2001).

Climate in Honduras varies according to elevation. It is subtropical in the lowlands and
the temperate at the higher levels (CultureGrams, 2001). While Honduras is mountainous, it is

the only Central American country without volcanoes. Rain falls throughout the year on the

 

' Source: www.1atinsynergy.org/hondurasinfo.htm
2 A division of Millennial Star Network and Brigham Young University
(www.culturegrams.com/eountry/premium/honduras/backgmund/landhun).

north coast, while the rest of the country has its heaviest rainfall between May and November.
Honduras receives an average rainfall of 150 inches a year (Pan American Health Service).

March through May are the hottest months and the highest temperature reaches at 40°C.

 

 

 

 

 

Map 1. Map of Honduras.

Periodically, Honduras is impacted by severe hurricanes. In October1998, heavy rains
and high winds from Hurricane Mitch resulted in the loss of thousands of human lives,

destructions of physical infrastructure and productive investments and deterioration of country’s

natural resources’. Widespread devastation altered the nature, location, and course of many
geographical features.

2.1.2 Social Indicators:

Most of the country’s population is concentrated in the central and western upland
valleys and along the north coast. Population density decreases to the south and east. Almost
50% of the population lives in rural settlements. The largest urban centers are the capital,
Tegucigalpa, San Pedro Sula, and La Ceiba. (The Latin American Alliance, 2001).

The population of Honduras is estimated at 6.4 million (2001) with an annual growth rate
of 2.4%. Forty-two percent of the populations is below 14 years of age and 54% belong to the
age group of 15 to 65 years old. Poverty is widespread in Honduras. Fifiy—one percent of rural
population and 57% of the urban population live below poverty line. At the national level, 53%
of the population lives below the poverty line (World Development Report, 2002)’. The per
capita income for 2000 averaged USS 2,390 (World Development Report, 2002). Seventy-three
percent of the population (15 years and over) is literate’ (1995 est).

Ninety percent of the population is mestizo (mixed Amerindian and European), 7% is
Amerindian (native Indian), 2% is black and 1% is of European descent. Spanish is the official
and dominant language. While about 88% of the populations are Roman Catholic, various other
Christian groups are active and law guarantees the freedom of religion (CultureGram, 2001).

2.1.3 Honduras Government:

Honduras is a democratic constitutional republic. The president, who is the chief of state

and the head of government, governs with a cabinet and serves one four-year term. The judicial

 

3 Source: http://www.hondurasag.org/background/
‘ Information on poverty is based on 1993 survey.
5 Source: www.countryreports.orglcontent/honduras.htm

branch of government is independent. The unicameral Congreso Nacional (National Congress)
has 134seats. Two parties, the liberal party (PLH) and National party (PNH), dominate the
congress. The Republic of Honduras is divided into 18 departamentos, i. e. provinces
(CultureGrams, 2001).

2.1.4 The Honduran Economy:

Magmnomic Policy: In the early-19903, the Government of Honduras (GOH)
launched a process of structural adjustment of the economy. In the initial program of adjustment,
these reforms focused on liberalizing both trade policy and the financial sector, which included
floating the national currency, removing controls on interest rates, food prices, and agriculture
products, and eliminating restrictions on foreign trade. Subsequent sectoral reforms were
initiated in infrastructure, agriculture, and environmental and social sectors.

Gross Domestic Product (GDP) and the Structure of the Economy‘: In 2000, Honduras’
GDP was estimated at USS 5.9 billion. During 1980-1990, GDP grew at an annual rate of 2.7 %.
For 1990-2000, the annual rate of growth averaged 3 .2 %. However, the annual growth rate for
the 1999 was negative 1.9%, due to damage done by hurricane Mitch. The estimated growth rate
for the period 2000-04 is 4.1 % (World Bank, 2001).

Agriculture is the most important sector of the economy. In 2000, agriculture accounted
for 18% of GDP, employed almost 50% of the labor force and accounted for two-thirds of the
country’s exports. The industry and service sectors accounted for 32% and 52% of the GDP,
respectively. For the period 1990-1998, the average annual grth rates for agriculture, industry

and service sector were 3.2%, 3.8% and 5.6%, respectively (World Bank, 2001). However, in

 

‘ The source of Statistics reported in this section is from the World Development Report and World Bank Country
Data

1999 the annual growth rates of agriculture, industry and the service sector dropped to -8.5%,
2.6% and 0.5%, respectively, following hurricane Mitch which severely affected the agriculture
and the service sectors. V

In 2000, the value of total exports (FOB) was USS 1.5 billion and the value of import
(CIF) was USS 2.9 billion (World Bank, 2001). The average annual growth rate for exports of
goods and services in 1990-98 was 10.2 %, which is an increase of almost 8% from the average
annual growth rate during 1980-90. However, the annual growth rate for exports of goods and
services in 1999 was negative 11.2%, which was a record low. Honduras’ major export
commodities are bananas, coffee, sugar cane, shrimp, lobster, minerals, meat and lumber, while
the major imports are machinery and transport equipment, chemical products, manufactured

goods, fuel and oil, and foodstuffs.

2.2 The Agriculture Sector

Historically, Honduras’ economy depends on the export of a limited number of
commodities-primarily bananas, coffee, and sugarcane; supplemented with exports of beef and
lumber. In contrast, the traditional agricultural sector has largely met domestic food
requirements.

Agriculture remains an important sector for the economy of Honduras. The primary
agriculture sector generates approximately 70% of rural employment, accounts for 18% of total
GDP and represents 63% of the value of the country’s exports. Furthermore, agriculture and its
related economic activities are particularly critical for the development of Honduras’ rural

economy.

2.2.1 Major Crops:

Honduras’s major crops may be categorized into two types: traditional export crops and
domestic food crops. The country’s main export crops are banana, coffee and sugar cane, while
the food crops are cereals7 (mainly maize) and beans. Figure 2.1 compares the area harvested for
these crops, from 1990-2001. In the last decade, area harvested for banana and sugar cane has
remained stable, while the area harvested for cereals declined slightly. In contrasts, the area

harvested for coffee and beans increased slightly during the later half of the decade.

 

Figure 2.1. Area Harvested of Major. Crops in Honduras, 1990-2001.

 

 

 

 

 

 

 

 

 

 

 

600,000
500,000 MA

is: , x’

E WW \\._

E 300,000

a 0 A w
100,000 ‘_*"'"‘W$ W

c—s—s=s:3=:

 

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001

Year

 

 

 

-O- Bananas + Coffee + Sugar Cane -*- Beans + Cereals l

 

 

Source: Derived from FAOSTAT database, 2002.

Traditional export crops (coffee, bananas, and sugar cane) account for more than 30% of

the agriculture GDP, livestock and basic grains account for almost 25% and the forestry

 

7 Cereals include maize, paddy rice, sorghum, and wheat.

10

activities account for almost 10% (SAG/UPEG, 1990) (Table 2.1). In the 1990s, the agricultural
GDP increased significantly, as a result of an increase in the production of non-traditional

products such as vegetables, fruits, and African oil palm.

Table 2.1. Contributions to the Agricultural GDP by Principal Products, 1989-1991, Compared to 1996-

 

 

 

 

 

 

1998, Honduras.
Products 1989-1991 1996-1998
Value Percent Value Percent
(million USS) (million USS)
Cofl‘ee 88 11.2 280 21.2
Bananas 111 14.1 94 7.1
Basic Grains 65 8.4 . 116 8.8
Sugar Cane 18 2.3 26 2.0
African Palm. 7 0.9 41 2.2
Other Products (Fruits & Vegetables) 27 3.4 ' 37 2.8
Livestock 167 21.2 199 15.1
Poultry 57 7.2 96 7.3
Forestry 117 14.8 129 9.8
Total Agricultural GDP 789 100 1,318 100

 

Source: SAG/UPEG. 1999. “Compendio Estadisrico Agmpecuario” Table 1 12

2.2.2 Government Policies Affecting the Agriculture Sector:

In 1992, Honduras’s legislative approved the Law for the Modernization and
Development of the Agricultural Sector (LMDSAS). This legislation is a very important
landmark in the history of Honduras, as it introduced substantial change in the law that governs
the agricultural sector. The new law was based on four principles: (1) the need to promote the
development of commercial agriculture in such a way that it will complement the development
of both the small-holder sector and the reformed agricultural sector; (ii) the need to strengthen
public sector capacity to design sectoral policies; (iii) the need to strengthen private sector

participation in defining and implementing these policies; and (iv) the need to decentralize (at

 

8 Ley dc Modemizacion y Desarrollo del Sector A gro-pecuario.

ll

both the institutional and regional levels) the implementation of public services (IADB, 1999).
Some of the reforms introduced under the law are discussed below briefly.

Agricultural Technology Policy. Until the beginning of the 19903, most of Honduras’
agricultural extension and technology services were implemented and financed by the Ministry
of Natural Resources. However, both the provision and the quality of these services were
deficient, and the expected results (in terms of productivity) had not been achieved, despite
increases in funding (Martel, 1995). Under the new law, the Directorate of Agricultural Science
and Technology (DICTA’) was created to improve the level of quality in the research and
development of agricultural technologies. DICTA is now responsible for the design, direction,
and implementation of research and extension program. In addition, it has a mandate to promote
agricultural research in the private sector, with the objective of minimizing public sector
participation in agricultural research.

Land Market Policy. Under LAMDSA, a new set of rules was enacted that legalizes
agricultural land lease and promotes the development of land markets by establishing a more
widespread and inclusive land-titling program (Martel, 1995). More secure land tenure is
expected to promote more efficient resource use, including rapid adoption of new technology.
However, the new rule has been received with mixed feelings. Some argue that, given the
existing skewed land distribution structure, these reforms do not address productivity and equity
issues.

Mooro Policy Chonge. Changes in the price control policy and the international trade,
brought about by the structural adjustment program (SAP), have had a significant affect, on the

agricultural sector.

 

9 Direccion de Ciencia y Tecnologia Agropecuarl'a.

12

During the 19705 and through the 19805, the GOH - through the Agricultural Marketing
Institute (IHMA) - maintained guaranteed producer prices to stimulate the production of basic
grains and beans. However, large bean farmers benefited more than the small farmers did
because small farmers consumed a large share of the production. By the end of 1989, the GOH
initiated price liberalization (IADB, 1999). With the introduction of LAMDSA in 1992, the price
guarantees were eliminated. I

The two trade-related changes that occurred under the SAP are: (i) the elimination of the
fixed exchange rate and adoption of flexible exchange rate, and (ii) signing of a free trade treaty
with other Central American countries, which eliminated tariffs for major agricultural products
traded in the region (Martel, 1995). These changes were expected to enhance the competitiveness

of Honduran agricultural products in the Central American regional market.

2.3 The Bean Subsector
2.3.1 Beans in the Honduran Diet:

Following maize, beans are the second most important staple in the Honduran diet. In
recent years (1997-1999), per capita bean consumption in Honduras has averaged 10 kg per year.
For the period 1997-99, beans provided an average of 89 calories/person/day and 6
gm/person/day of proteins (F A0, 2000), which is the second most important source of proteins
in the Honduran diet (afler maize, 19.0 grams/person/day). Although all households consume
bean everyday, they are more important source of protein for lower income groups than for

higher income households.

13

Honduran’s primarily consume steamed or refried beans for their meals, which are served
with fresh cheese and tortilla. Most often, onion is added to steamed and refried beans. The
majority of the population eats beans three times a day.

2.3.2. Consumer Preferences:

Consumer preference for bean depends on color, Cooking time, and cooked texture.
Consumers prefer quick-cooking beans. Cooking time varies by variety, age and storage
conditions. Beans consumed in Honduras can be grouped into three market classes: small light-
red beans, small dark-red beans, and black beans. However, Martel (1995) reported that most
households in Honduras prefer light red beans").

2.3.4. Domestic Consumption:

Total bean consumption is estimated by subtracting quantity used for seed and waste
from the total domestic supply“. Available data (Table 2.2) indicates that average per capita
consumption has increased fi'om 8.35 kg in the 19805 to 9.64 kg in the 19905 - an increase of
15%”. In recent years (1997-99), per capita bean consumption in Honduras has averaged
lOkg/person. The increase may be due to an increase in income and greater diversification of

bean use.

 

'° In Central America, consumer’s market class preference varies from country-to-country. Consumers in Nicaragua,
Honduras, El Salvador and Panama prefer red beans, while consumers in Guatemala and Costa Rica prefer black
beans.

" Domestic Supply = Production + Imports - Exports + changes in Stock

'2 During this 20-year period (Table 2.2), per capita consumption ranged from high of 11.3 kg/person/year (1997) to
a low of 6.4 kg (1987).

14

Table 2.2. Honduran Total and Per Capita Bean Consumption, 1980-1999.

 

 

Year Consumption (MT) Consumption per capita (kg)
1980 28,399 7.96
1981 28,692 7.78
1982 32,906 8.65
1983 33,031 8.41
1984 32,673 8.06
1985 33,076 7.91
1986 32,236 7.47
1987 28,628 6.43
1988 46,195 10.07
1989 50,727 10.73
1990 50,528 10.38
1991 53,252 10.62
1992 . 46,906 9.08
1993 54,690 10.29
1994 50,652 9.26
1995 50,286 8.94
1996 51,553 8.92
1997 67,002 11.28
1998 63,568 10.42
1999 44,856 7.17

 

 

 

 

Source: Computed from FAO online data, 2000.

Coincidentally, the average per capita bean consumption, for the period 1997-99, for the
Central America wasalsolO kg. For the same period (1997-99), Nicaragua had the highest
average per capita consumption (20.1 kg/person), followed by Belize, which averaged 14.2 kg
/person (Table 2.3). The calories and protein contribution of beans to the Central American
countries averaged 92 calories/person/day and égm/person/day, respectively. Nicaragua and
Belize benefited the most from bean’s nutritional contribution to calories and protein intake.
Honduras stands fourth among the Central American countries in terms of per capita bean

consumption.

15

Table 2.3. Average Annual Per Capita Consumption and Nutritional Contribution of Bean in
Central American Countries, 1997-99.

 

 

 

Country Per Capita (Kg/year) Protein (Gm/person/day) Calories (Gm/person/day
Belize 14.2 8.5 130.3
Costa Rica 7.3 4.4 67.41
El Salvador 9.9 6.0 91.2
Guatemala 6.9 4.1 63.6
Honduras 9.6 5.8 88.9
Nicaragua 20.1 12.0 184.0
Panama 2.0 1.2 18.2

 

 

 

Source: FAO Food Balance Sheet, 2000.

During the 1997-99 periods, Honduras and El Salvador ranked third (18% each) among
Central American nations in terms of their share of total regional bean consumption (Figure 2.2).

The top two consumers were Nicaragua (29%) and Guatemala (23%).

 

Figure 2.2. Share of Average Total Regional Bean Consumption
- for 1997-1999.

Belize
Panama 1% Costa Rica
J

2% /, /' 9%

/’V

 

29% 7 *2?” ’ ““131 Salyador
31,; .14. Wile. 3.2%: 18 /0
Honduras Guatemala

18% 23%

 

 

 

Source: Derived from F AO database, 2000.

16

If we separate out consumption by the country’s preference for red and black beans,
countries with a preference for red beans (i. e. Nicaragua, Honduras, El Salvador and Panama)
account for 67% of the total beans consumed in the region and the countries that prefer black

bean (i. e. the Guatemala and Costa Rica) account for 32% of total consumption (Table 2.4).

Table 2.4. Average Bean Supply and Consumption in Central American Countries, 1997-1999.

 

 

Country Bean supply (MT) Em Consumption
Total (MT) Share (%)

Belize 3,435 3,079 1
Costa Rica 30,576 27,944 9

El Salvador 66,168 59,688 18
Guatemala 85,043 74,536 23
Honduras 66,522 58,475 18
Nicaragua 108,323 96,440 29
Panama 6,3 19 5,469 2
TOTAL 366,386 325,631 100

 

 

 

 

Source: Compiled from FAO database, 2000.

2.3.5. Bean Export and Import:

Over the 1980-1990 period, Honduras experienced significant fluctuations in both its
bean export andimport (Figure 2.3). Imports were highest in 1988 (10,568 MT) and exports
were highest in 1991 (4,506 MT). During the 19805, average annual bean imports (1,940 MT)
exceeded exports (1,863 MT). In contrast, average exports (1,985 MT) in 19905 exceeded
imports (1,773 MT). The general trend in export shows an increase in the quantity exported in
the late-19805 and early-19905, than decreasing to the early-19805 level by the end of the 19905.
The trend in import indicates that import have been increasing, but at a very slow rate. Honduras
was net .1 exporter of beans in the 19805, except during 1980 and 1988. However, in the 19905,
Honduran’s export declined and the country was a net importer during the yearsl990, 1993,

1996, and 1997. Honduras mainly exports to El Salvador and Guatemala and import fi'om

17

Nicaragua. Bean exports represent an opportunity to enhance the household income of the bean

producers and a source of foreign exchange earning for the country.

 

Figure 2.3. Dry Bean Trade of Honduras, 1980-1999

 

 

 

 

 

 

 

 

 

 

 

 

 

12000
10000 A
§ 5000 I
E ll +1»-
port
.13 6000
5 ll. A ”m“
5 4000 [A '
2000- \ ",
OJ‘ AA- El . .W
‘6“ ‘0' a? b 413’ W 1" ‘1’
e e e 49‘" e sips“ e“ safe“

 

 

 

Source: Derived from no database, 2000.

F AO data indicate that in recent years, the region (Central America) has been a net
importer of beans. During the 19905, regional exports and import averaged 16,116 MT and
26,640 MT, respectively. F ifty-four percent of total regional exports (1990-99 average) came
from Nicaragua, followed by Honduras, which contributed 12% (Figure 2.4). The largest

importer in the region has been Costa Rica (28%), followed by El Salvador (27%).

18

 

Figure 2.4. Country Shares of Bean Exports in Central America, 1990-
99.

Panama Belize

El salvador
l 1%

 

Guatemala
3%

Honduras
12%

 

 

 

Source: Derived from F A0 database, 2000.

2.3.6. Production Analysis

R_egi_omtl Perspectives

The three most important bean-producing areas in Honduras are the Mid-Eastern, the
North—Eastem, and the Western region.

The Mid-Eastern region, which consists of the Departments of Francisco Moranzan and
El Paraiso, accounted for 28% of the bean area and 21% of national production in 1999 (MNIL

2000). Topographically, the Mid-Eastem region has a number of small deep valleys. In addition

19

to beans, maize, tobacco, cotton, and horticultural production are important farming enterprise
(Martel, 1995).

The North-Eastern Region, which accounted for 29% of total area and 33% of total
national production in 1999 (MNR, 2000), encompasses the Department of Olancho.

The Western region, which accounted for 13% of the bean area and 15% of total national
bean production in 1999 (MNR, 2000), encompasses the Departments of Copan, Lempira, and
Ocotepeque. Bean production is concentrated in the more mountainous part of the Western
region. The northern part of the Western region, which includes one of Honduras’ most fertile
valleys with abundant rainfall (1,600 mm per year), is dominated by tobacco, cattle, and corn
production. Horticultural crops dominate the southern part of the Western region, which includes

a much drier valley (Martel, 1995).

Ban fie; Production, and Yield

During the most recent three-year period (1999-2001), total area harvested for major
grains (maize, rice, beans and sorghum) in Honduras averaged 568,385 Ha (F A0, 2002). Out of
the total area, 21% was devoted to beans, which ranks second afier maize that accounted 65% of
the area harvested (Figure 2.5). The average annual grth rate of bean area and total production

from 1980-2000 was 3.48% and 6.75%, respectively.

20

 

Figure 2.5. Average Area Harvested for Major Cereals in Honduras,
1999-2001.

 

E Beans

I Maize

El Sorghum
Rice

 

 

 

 

Maize
65%
Source: Derived from FAO database, 2002.

 

 

 

For the period 1998-2000, Honduras’ bean area (harvested) averaged 103,725ha. During
the period of 1990-2000, the area harvested was highest (120,706 ha) in 2000 and the lowest
(68,273 ha) in 1995 (FAO, 2002).

During the past 11 years (1990-00), bean production averaged 64,364 MT, which is 62%
higher than average production during the 19805. However, production varied from year-to-year,
as shown in Figure 2.6. Within the period of 1980-2000, production was highest (84,980 MI) in

2000, while the lowest level (30,543 MT) occurred in 1983 (FAO, 2002).

21

 

Figure 2.6. Honduran Dry Bean Production and Area Harvested,
1980-2000.

 

140000

120000 1 /-
100000 A

 

 

 

 

 

 

 

 

 

 

 

3‘ 30000
'5
A M
60000 V v
40000 "VLW V
+AreaHarvestedO-la)
20MB +Production(MT)
0 I I r V I I I T 7 r I l l T T T T l T 1]]
o '1. ,9 b 9e q. 1): b 90 c9
°o ‘b ‘b $
0 e e e e 0*090‘10‘199e

Year

 

 

 

Source: Derived from FAO database, 2002.

During the past two decades, parallel trend are apparent between production and area
harvested (Figure 2.6). As production is a fimction of area harvested and yield, this suggests that
increase in area contributed significantly to the increase in production.

During the past two decades, there has been a gradual increase in the total regional
(Central America) bean production, which may be attributed to adoption of improved
technologies and increase in the land area devoted to bean. In the most recent three-year period
(1998-2000), average total production of the Central American nations averaged 376,889 MT
(FAO, 2002). Among the countries, Nicaragua produced 35% of total production, followed by
Guatemala (24%), Honduras (19%) and El Salvador (16%). The remaining 6% is shared by

Belize, Costa Rica and Panama (Figure 2.7).

22

 

Figure 2.7. Central American Average Bean Production by Country,

1993-2000.
Panama Belize
1% ‘\ / 1% Costa Rica
\ //_
x / 4%

   
  

 

. \El Salvador
Nicaragua 16%
35%
Guatemala
24%
Honduras
1 9%

 

 

Source: Derived from FAO database, 2002.

M

During the period 1990-2000 (Figure 2.8), bean yields in Honduras have varied
considerably from year—to-year. During the 1990-2000 period, yield averaged 699 kg/ha, which
was 19% higher than the average yield in the 1980s (1'. e. 585 kg/ha). During the last decade, the
lowest yield was reported in 1999 (479 kg/ha) and the highest (922 kg/ha) in 1998. The low yield
in 1999 was due to the crop damage caused by hurricane Mitch, which hit the country in late-

October 1998.

23

 

Figure 2.8. Honduras: Bean Yield in MT, 1990—2000

Yield (Kg)

 

I990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000

Year

 

 

 

Source: Derived from FAO database, 2002.

2.3.7. Production System, Farm Size and Commercial Orientation.

Honduras has two agricultural seasons, the primera (May — August) and postrera
(September — December). Farmers plant beans during both the seasons. Beans are typically relay
cropped with maize in the primera season and planted as monoculture in the postrera.
Approximately 67% of the national bean output is produced during the postrera (SECPLAN,
1993), with two regions, the North-Eastem and the Mid-Eastern, accounting for 70% of the
national total production. Ninety-four percent of beans produced in Mid-eastern region are
harvested in the postrera season. In contrast, the beans grown in North-Eastern region are more

evenly distributed, between seasons, with the primera accounting for 40% of the region’s total

bean production and the postrera for the remaining 60%.

24

Almost 80% of the Honduran bean farmers are small farmers, whose total farm area
averages 3.5 ha or less, with 20% having less than 1 ha. On the other hand, 15% of the bean
farmers own more than 14 ha (Martel, 1995).

National data (SECPLAN,- 1994) indicate the Mid-Eastern bean farmers market 63% of
their total bean production, while North-Eastern farmers market only 53%. One of the reasons
could be the presence of urban centers. The Mid-Eastern region is more densely populated with
larger urban centers, namely Tegucigalpa (580,000 population), the capital of Honduras, and
Danli (30,000 population). In contrast, the two largest urban centers in the North-Eastem region
are Juticalpa and Catacamas, with a population of only 20,000 and 18,000, respectively (Martel,
1995). The other reason for the difference in the marketed share of total production could be
because the headquarters for the National Bean program and Zamorano, the leading agricultural
teaching and research center in Honduras, are located in the Mid-Eastem region. Thus, farmers
of Mid-Eastem region have greater access to new technologies and the inputs and they are better
able to produce marketable surplus.

2.3.8. Production Inputs, Credit and Extension

One of the constraints to increasing bean production is farmers’ limited use of inputs,
such as improved seeds, fertilizers and plant protection chemicals (herbicides, insecticides, and
fungicides). Further, the lack of support services like credit and extension services is a
disincentive for farmers to adopt these improved production technologies. While most Honduran
bean farmers apply few modern inputs (MRN, 1988), informal interviews with farmers suggested
that bean farmers in Mid-eastem region apply higher input levels than the farmers in other

regions of the country (Martel, 1995).

25

Lam Farmers in Honduras use both family labor and hired labor for bean production.
For traditional as well as the improved farming systems, the greatest demand for labor occur
during the land clearing, weeding, and harvesting periods (Martel, 1995). Cash flow constraints
determine the type of labor employed throughout the farming season. Martel reported that under
the traditional system, land clearing and weeding are generally carried out by family labor, while
hired labor is employed mainly at harvest when the cash flow constraint is relaxed. The demand
for labor is very high during the harvest season, both for small and large farmer, as it is done
manually under a time constraint. The time constraint arises from the threat of damage by fungi
and insects if the harvest is delayed and the threat of thefi, if the farmer leaves the ready-to-
harvest crop in the field too long (Martel, 1995).

Improved seeds: Honduras’ principal bean breeding program is located at Zamorano.
Since 1987, Zamarano has released seven improved bean varieties”. In addition to breeding,
Zamarano produces foundation seed of improved varieties, which are multiplied by Zamorano,
the National Bean Program (under the DICTA), Hondugenet (a private seed company), and
NGOs (Mather et. a1, 2002). Mather also reported that both Zamorano and Hondugenet sell
certified seed directly to farmers, which is packaged in 50 lb bags and sold exclusively from
Zamorano’s campus and Hondugenet’s facilities in Tegucigalpa. In addition, various NGOs
distribute improved seed to small-scale farmers associated with their outreach projects. However,
due to the absence of formal seed distribution system, most farmers’ plant saved seed (59%) or

obtained seed from a neighbor (29%). While a recent study indicated widespread adoption of

 

‘3 Improved varieties that were released are Catrachita (1987), Oriente (1990), Dorado (1990), Don Silvio (1993),
DICTA 113 (I996),D1CTA 122 (1996), and Tio Canola (1996)

26

improved bean varieties, the rate of diffiision is slow and since few farmers’ plant certified seed,
the quality of their seed is poor (Mather, et. a1, 2002).

Credit; Framers can obtain credit from informal sources or the formal sources, such as the
National Agriculture Development Bank (Banco Nacional de Desarrollo Agricola, or
BAN ADESA), savings and loan coops and private development organizations (IADB, I999).
HoWever, the services of BAN ADESA and other formal institutions do not reach the majority of
small farmers, especially those bean producers who plant less than 1 ha of beans. Two
constraints preventing the further development of the financial system, particularly in the area of
rural finance, are the weak process of bank supervision and the lack of an effective legal,
regulatory and institutional framework to govern secured transaction (IADB, 1999). On the other
hand, informal agents are far more accessible to bean farmers. These informal credit agents are
mostly local rural traders or traders from nearby urban centers. Typically, these traders use the
expected harvest as collaterals for the loan (Martel, 1995). Lower transaction cost and easy
accessibility are key incentives for farmers to obtain loans from informal sources.However, the
interests charged are much higher than interest charged by formal sources.

Chemical Inputs: Private agro-chemical distributors, who sell these inputs to wholesalers
and the retailers, import all of their chemical inputs. Private agricultural input retailers market
these inputs in most urban centers that have a population of greater than 10,000 (Martel, 1995).
In some locations, BAN ADESA also operates input retail stores. Local traders play an important
role in distributing inputs from urban centers to the farm gate by either providing transport
services or acting as intermediaries between the input stores and farmers (Martel, 1995). The use
of chemical inputs varies among region. Martel (1995), found that farmers in the Mid-Eastern

region used more chemical inputs than those in the other two regions.

27

Extension and Technology Generation: Until the early 19905, most of the agricultural
extension and technology services in Honduras were financed and implemented by the
government. Under the system, the expected results in terms of higher productivity were not
achieved, because both the quality and provision of services proved to be deficient. In order to
improve the level of quality in research and development of agricultural technologies, DICTA
was created under the LMDSA". DICTA was mandated to design, direct, and execute all
research and extension programs, and is responsible for promoting agricultural research in the
private sector to minimize public sector participation in agricultural research. Under this new
institutional arrangement, Zamorano, in collaboration with Bean/Cowpea CRSP and
PROFRIJOL, are responsible for conducting most of the technical research on beans (Martel,
1995).

Since its’ restructuring in the early 19903, MNRs staff has been reduced significantly. As
such, the extension service has been limited to serving organized peasant groups who, as a
cooperative (or any other formal organization), request technical assistance (Martel, 1995).
Under this arrangement, individual farmers have much less. access to extension services.

In support of the field extension effort, the MNR and Zamarano publish technical and
popu1ar agricultural bulletins that deal with wide range of topics such as bean diseases, improved
varieties, fertilization, and entomology and plant protection issues. The MNRs publications are
intended for extension staff. Zamarano ’s bulletins, which are more technical, are intended for
extension staff and field technicians. While these publications serve a purpose, they are not

widely distributed (Martel, 1995).

 

" LMDSA (1992) introduces substantial changes to the series of laws that previously governed the sector.

28

2.3.9. Bean Marketing System”

In the 1980s, bean marketing was dominated by a governmental parastatal, the Honduran
Agricultural Marketing Institute (IHMA). IHMA was established in 1978 with the objective of
improving the basic grains marketing system. Its specific responsibilities were toi 1) provide a
direct marketing channel between producers and consumers, 2) establish minimum producer
price guarantees, 3) build storage facilities in urban and rural areas of Honduras, and 4) manage
all imports and exports of basic grains (Martel, 1995). Price guarantees were designed to
minimize variability in farmer’s annual income, with the expectation that this would stimulate
investment in agriculture, which in turn might lead to higher production. However, IHMA’s
impact on the production and marketing of beans had been minimal.

Under the structural adjustment program (SAP) in early-19905, the marketing parastatal
was dismantled, price controls were eliminated and rules on international trade was relaxed. As a
part of SAP, the role of IHMA was reduced to buying and selling strategic reserves of corn and
beans through public bidding, managing a market information system, and providing storage and
technical assistance to basic grain producers.

Wholesale and Retail markets”:

The principal marketing channel agents are farmers, wholesalers, local traders, regional
traders", Salvadorian traders”, IHMA, BAN ASUPRO, bean packers, bean processors, and

urban retail markets.

 

'5 Based on Martel, 1995

'6 Based on Martel, 1995.

'7 Regional bean traders operate over a larger geographical area than the local traders.

" These are traders from El Salvador who enter with manufactured merchandise for sale to wholesalers and retailers
in major cities and purchase full truckloads of beans for resale in El Salvador.

29

Agricultural wholesale markets, who trade beans in large quantities, are found in all the
urban centers. The buildings used by the wholesalers are either owned or rented by the traders.
Most buildings have the capacity to maintain stock of up to 30 MT. Large traders typically
purchase their stocks from small traders located in the rural areas, or travel to the rural areas and
purchase directly from farmers.

Bean retailing is done through several types of retail outlets, including the. street vendors,
city-market vendors, comer stores, mini-markets, supermarkets, food-marketing parastatal
(BANASUPRO), and Farmers’ market fairs.

Street vendors, who are found in the major cities, use wooden structures, which can be
easily assembled and rolled up. City-market vendors rent retail posts at the municipal markets in
major cities. In addition to the beans, they sell cereals, vegetables and fruits.

Corner stores (Pulperias) are found in urban neighborhoods and rural villages. Some of
the comer stores located in the urban neighborhoods sell processed beans, while those located in
mm] villages sell unprocessed dry beans.

Mini-markets are common in middle class urban neighborhoods. They are normally
bigger than corner stores and most of them sell pre-packet beans in plastic bags of 1 or 5 lb. In
addition to the beans, both corner stores and mini-markets sell other food products and
household goods.

Supermarkets (large modern food retail stores), which serve the middle and middle-upper
class in the cities, are located strategically in commercial areas. Bean products sold in these
facilities include processed (refried beans — frozen, canned and flexi-pack) and unprocessed (dry)

bean in bags of l or 5 lb.

30

BAN ASUPRO, the food retailing parastatal, manages a national chain of food stores. It
was established in 1980 with the mandate to serve poor consumers by assuring a stable supply of
basic consumer goods at subsidized prices. Dry Beans are one of the items sold through this
facility.

In addition, beans produced by small-scale farmers are sold at farmers’ market fairs.
These markets are designed to provide farmers with an opportunity to sell their products directly

to consumers. These fairs, which occur on Saturday, exist in most of the major cities.

31

CHAPTER III

LITERATURE REVIEW, DATA COLLECTION AND METHODOLOGIES

3.1 Literature Review:

Record keeping refers to keeping, filing, categorizing and maintaining farm financial and
production19 information. It can be accomplished through a variety of methods, from basic hand
record-keeping method to an elaborate computerized system. To convert farm records/data into
usefiil information, record analysis must be carried out and the findings reported. Record
analysis refers to evaluating farm records. The process of evaluation allows the farmer/farm
manager to make informed decisions based on actual farm performance. Therefore, establishing
and using an effective farm record keeping system for farm operation aids in farm planning,
informed decision-making and analysis of both production and financial records. Accurate
records and the resulting analysis help farmers to make financial and production decisions,
comply with tax laws and other governmental regulations and support loan applications (Gerloff,
D.C. et. al., 1995).

Farm records are often kept with the expectation that there will be several uses made of
the records. Hopkins and colleagues view accounting information as a tool to assist the manager
in: (l) evaluating the firm’s financial position, relative to its objectives; (2) measuring economic
performance; (3) controlling the daily routine operation of the business; and (4) evaluating
alternative strategies for controlling resources (citation from Harsh, eta], 1981). Other uses of
the records include providing information needed for partnership and tenant-landlord

settlements, monitoring the progress of the business over time, and providing the basis for

 

'9 Production records are items that relate to quantities of inputs and levels of production by enterprise and/or by
resource type. .

32

settling litigation claims (Harsh, et.al., 1981). The number of potential uses of records in the
business is endless. However, what are important uses for one farmer/farm manager may not be
as important for others. Therefore, what the farmer/farm manager desires from his record system
will influence the design of the system and the type of information recorded.

A good record system remains an essential component of a well-managed farm operation.
However, despite the long, sustained and widespread advocacy of farm record systems by
experts in many countries, few small-scale farmers use record keeping for planning and control
(McConnell, et.al.,). This could be due to farmers’ lack of information, their limited education
and/or the type of farming systems, which may not demand such tools for managing their farms.
Generally, the majority of the farmers in the developing countries are subsistence farmers, who
primarily use traditional inputs, cultivate on small land holdings, and have limited
knowledge/skills to carry out farm record keeping. This is not to suggest that farmers in the
developing countries do not carry out planning and control. Rather, they exercise these fiinctions
in informal ways rather than by using formal systems.

In establishing a farm record system, the farmer/farm manager has a number of options.
These options relate to the kind of records, the extent of detail, and the type of accounting system
to use. Some of the common options at hand are detailed versus generalized accounting system,
single entry versus double-entry accounting system, cash versus accrual accounting system,
computerized versus manual record system, and total farm accounting versus cost accounting or
partial enterprises accounting. Each option has its own advantage and disadvantages and the cost
associated with various accounting system varies. In essence, the record keeper must weigh the
opportunity cost of time spent and the resources used in keeping records against the benefits

derived from the records kept.

33

3.2 Data Collection

The farm record keeping data that are analyzed in this study were collected from small-

scale Honduran bean farmers by Zamarano staff during the period 1998-2000. Rather than using

a formal sampling frame, the farmers were selected to represent farmers who used two levels of

technology, traditional technology and modern technology. Table 3.1 shows the sample size,

village and the department for each strata by season and year. These sites (Olancho, Yarn and El

Paraiso) were located in the main bean-growing regions of Honduras (Map 2).

 

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34

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Table 3.1 Locations, Department and Sample Size by Season/Year and Farmer Type.

 

 

Season/ Locality Municipality Department Sample Traditional Modern
Year Size (N) (N)
Primera El barro Danli El Paraiso 4 0 4 .
1998
' Arauli Danli “ 4 O 4
Robledal Sn Matias “ 4 2 2
Limones Moroceli “ 4 4 O
Lavandero Guinope “ 4 O 4
Total N 20 6 l4
Primera Silica Silica Olancho 5 2 3
1999
Zuntul Silica “ 1 1 O
Quilinchuch Silica “ 1 l 0
El Ocotal El Rosario “ 3 1 _ 2
El Rosario El Rosario “ l 0 1
El Pino El Rosario “ 4 4 - O
Yupite El Rosario “ 4 1 3
Total N 19 l 9
Postrera Silica Silica Olancho 7 3 4
1999
Zuntul Silica “ l O 1
El Ocotal El Rosario “ 3 0 3
El Rosario El Rosario “ 1 0 1
El Pino El Rosario “ 4 3 1
Yupite El Rosario “ 4 3- 1
Total N 20 9 l l
Primera Santa Cruz Yorito Yoro S 0 5
2000
La Ladera Yorito “ 4 2 2
Pueblo Viejo Yorito “ 5 4 l
Mina Honda Yorito “ 5 l 4
Total N 18 6 12
Po'strera Santa Cruz Yorito Yoro 5 5 0
2000
La Ladera Yorito “ 4 2 2
Pueblo Viejo Yorito “ 5 1 4
Mina Honda Yorito “ 5 5 0
Total N 19 l 6

 

35

The reporting unit for the survey is the person in the family in charge of the bean farm.
During the initial visit, the enumerators drew a map of the farmers’ field and collected basic
socioeconomic information about the farmers’ household and the bean operation. Throughout the
cropping season, the enumerator visited the farmer at least twice a month to record information
on the farmers’ bean operation.

The data that were collected included farm area devoted to beans, inputs applied (type,
amount, cost), labor used (male, female, hired, family, wage rate) for each operation, and
machinery used (hours, cost). After harvest, the enumerator recorded the harvest and the price
that the farmers received at sale of his/her bean crop. For the analysis, data were than entered

into spreadsheet and read into SPSS for data cleaning, organization and analysis.

3.3 Data Analysis:

Tocharacterize the bean production systems for traditional and modern farmers and to
assess their profitability, the farm record data were analyzed and average quantity and cost of
various inputs '(such as seed, fertilizer, herbicide, insecticide and fungicide) used per hectare was
computed for each group of farmers for comparison and to be used for profitability analysis.
Further, labor use (man-days/ha) and its associated cost per hectare by type of operation were
analyzed and compared between traditional and modern farmers. Labor use and cost per hectare
by operation was segregated into family and hired labor to gain a better understanding of the
composition of labor and distribution of cost. i

To assess the costs and returns of traditional and modern farmers, enterprise budgeting
was used for 'each data set as an analytical tool. The following values for revenue, cost and

returns were estimated for traditional and modem farmers.

36

Revenue:

Gross Income (GI), is defined as the value of the total bean output produced. G1 was
computed by multiplying average yield by average price at farm level. GI includes the output
produced during the year, which may be sold, used for household consumption, used on the. farm
for seed, used for payments in kind; or kept in store for fixture sale (ending stock). Non—market
transactions are valued at their opportunity cost (average market price).

osts:

(a) Operating cost refers to the sum of input cost, traction contract cost and hired labor
cost. Input cost consists of value or expenses incurred on seeds, fertilizer, insecticides,
fungicides, and herbicides, while the traction cost consist of the opportunity cost or the hire cost
for using tractors or oxen'for primary land tillage. Non-purchased inputs, such as owned seeds
were valued at their opportunity cost, 1'. e. market price.

(b) Opportunity Cost of Equity Capital is the amount that the farmer would otherwise be
able to earn at the same risk level as investing on bean production. It was computed at 12% of
cash/operating cost”.

(c) Opportunity Cost of Family Labor is the value of the family labor used, which is
valued at local wage rate (1'. e. the average of the cost paid for hired labor).

(d) Total Enterprise Cost (TEC) refers to the value of all inputs used in production. It is
the sum of operating cost, opportunity cost of equity capital, and the opportunity cost of family
labor. Total cost are generally divided into total variable cost and total fixed cost. However, in
this analysis, total fixed cost are excluded since the fixed costs were minimal. The study did not

assign price for the land, given the difficulty of estimating land values.

 

2° Operating Cost consists of expenses incurred on seeds, agrochemicals, traction contract cost and hired labor cost.

37

BM;

(a) Enterprise Gross Margin (EGM) is defined here as the difference between GI and
Operating cost.

(b) Return to Family Land, Labor and Management were computed by deducting
operating cost and the opportunity cost of equity capital from GI.

(c) Return to Family Land, Labor and Management per Day was computed by dividing
Return to Family Land, Labor and Management by the number of family labor days used. While
thestandard practice is to value family labor at its opportunity cost, this assumes that wage labor
opportunities exist in the community. However, this is so often not the case. Thus, this measure
provides an alternative estimate of profitability - i.e. the implicit daily wage a farm family earns
from growing beans.

(d) Return to Family Land and Management is the difference between the GEI and TEC,
which includes the opportunity cost of family labor and equity capital as part of costs. It
measures the reward to the family for farmers’ management and land.

The results from enterprise budgets were used for sensitivity analysis to assess the degree
by which the. farmers’ enterprise gross margin vary when alternative yields and prices were
substituted for the actual average values used in the budgets.

Finally, standard parameter of labor man-days/ha for various farming operations in bean
production was computed. These standard parameters were mainly computed to reduce the
amount of data that would be collected for future farm record keeping. In so doing, some
resources could be saved and diverted to increase the sample size, thereby giving results that are
more representative. These standard parameters were drawn from pooled sample (N=96) of all

the data sets used in this study. For land preparation, manual weeding and other activities, the

38

survey data were used to estimate mean and the median as the standard man-days/ha for these
farming operations. For harvesting and threshing, standard labor man—days (mean and the
median) were computed based on the assumption that the number for labor man-days/ha for each
of the operation was dependent on the quantity of harvest (i.e. yield). For planting, standard labor
man—days/ha (mean and the median) was based on the assumption that the labor man-days/ha _
required was dependent on the seed rate used. Standard labor parameter for application of
fertilizer, herbicide, insecticide and fungicide was based on the number of days per application
for a one-hectare bean farm. These standard parameters (mean and the median) were validated
for each data set using the actual yield, price, seed rate, aggregated input cost, traction contract
cost, wage rate, and average number of agrochemical (fertilizer, herbicide, insecticide and
fiingicide) applications to evaluate the results (Profitability), using these parameters, compared to

the results obtained when using the actual data.

3.4 Characteristics of the Study Area21

Primera 1999. El Paraiso.

The sample farmers in the data set are from the localities of El Barro, Arauli, Robledal,
Limones and Lavanderos. The average annual rainfall for these localities ranged from 800 to
1,400 mm. The nearest city for El Barro, Arauli and Robledal is Danli, while for Limones and

Lavanderos it is Tegucigalpa, the capital of Honduras (Appendix 1).

 

2' Source: Dr. Juan Carlos Rosas, Director, Programa de Investigaciones en F n'jol, Escuela Agricola Panamerimna,
Zamorano, Honduras.

39

Postrera and Primera 1999. Olancho.

The sample farmers in the data set are from the localities of Silca, Zuntul, El Ocotal, El
Rosan’o, El Pino and Yupite. The majority of these localities are located in plain areas with an
average annual rainfall ranging from 1,200 to 2,000mm. The nearest city to these localities is
Juticalpa (Appendix 1). .

29511213 and Primga 2000, Yoro,

The sample farmers in this data set come are from the localities of Santa Cruz, La
Ladera, Pueblo Viejo and Mina Honda. They are all located in hilly area with an average annual

rainfall ranging from 1,600 to 2,000 mm. The nearest city for all the localities is Yoro (Appendix

1).

40

CHAPTER IV

PROFITABILITY ANALYSIS OF BEAN PRODUCTION

In this chapter, first, the socioeconomic characteristics of the sample of record keeping
farmers are described, followed by the analysis of each of the five data sets. At the end of the

chapter, the overall results are synthesized.

4.1 Socio-Economic Characteristic of the Sample Farmers

Across all sites, the samples of the bean farmers were similar in terms of their
socioeconomic characteristics (Table 4.1).

Across the sites/seasons, farmers’ mean ages ranged from 39 (Primera & Postrera 1999,
Olancho) to 43 (Primera 1998, El Paraiso). Farmers’ education ranged from 3 to 5 years. At all
sites, the number of family members per households ranged from 4 to 6, and the number of
children ranged from 2 to 3. Farmers cultivated a total land area, ranging from 1.25 to 3.23

hectares and their bean area ranged fi'om 0.41 hectares to 0.95.

Table 4.1. Socioeconomic Characteristics of the Sample Farmers, Honduras.

 

 

 

 

 

 

 

Characteristics El Paraiso Olancho Yoro
(Year 1998) Q1 car 1999) (Year 2000)

Farmers Age (Yrs.) 43 39 40
Farmers Education (Yrs.) 5 4 3
Family size 4 5 6
Number of Children in the 2 3 3
family .

Farm size (Ha) 3.23 1.50 1.25
Bean Area (Ha) 0.95 0.99 0.41

 

Note: The figures used above are averages.

41

4.2 Department: Yoro, Honduras, Postrera 2000.

The sample included 13 farmers, who planted traditional bean varieties and six farmers
who planted modern bean varieties. In the. discussion that follows, farmers who planted
traditional varieties are referred to as traditional farmers and those who planted modern varieties
are referred to as modern farmers.

4.2.1 Patterns and Costs of Labor Use

Labor Use by Type of Operation: On average, traditional farmers used a total of 75.5
man-days/ha, compared to 101.6 man-days/ha for modern farmers (Table 4.2.1.1).

In addition, Table 4.2.1.1 reports the mean number of man-days and associated cost of
family and hired labor, by farming operation, for modern and traditional farmers. Because the
number of farmers who carried out each operation varied greatly, the mean reported is the mean
man-days (costs) for those farmers who actually carried out the respective operations. In this
regard, the sum of the means of family and hired labor man-days under each farming operation

(Table 4.2.1.1) do not represent the total average man-days for the respective operation.

42

 

 

 

Table 4.2.1.1. Labor Use (average man-days/ha), Postrera 2000, Yoro, Honduras.
Operation and Labor Traditional (N - 13) Modern (N I 6)
Type No. of Days' 9&% N9, of Days‘ m
L Mean SD." (U_S$__/ha)f n__ Mean SD" M):
Land Preparation:
Family 13 12.7 6.1 28.2 4 15.0 11.7 33.3
Hired 8 8.9 5.0 14.7 5 16.7 7.7 37.7
Planting:
Family 13 9.3 4.9 20.6 4 11.9 8.8 26.4
Hired 11 6.0 3.2 10.5 5 11.2 3.6 21.9
App. Fertilizer:
Family 1 1.2 N.A. 2.8 1 7.5 N.A. 16.7
Hired 1 1.2 N.A. 2.8 0 NA N.A. NA
App. Herbicide:
Family 6 3.0 1.0 6.8 1 2.5 N.A. 5.6
. Hired 5 3.0 1.1 5.7 l 2.5 N.A. 5.7
App. Insecticide:
Family 5 4.2 3.5 9.4 4 2.9 1.4 6.5
Hired 4 2.8 1.6 5.0 4 2.3 0.4 5.2
App. Fungicide:
Family 0 N.A. N.A. N.A. 0 N.A. N.A. N.A.
Hired 0 N.A. N.A. N.A. 0 N.A. N.A. N.A.
Manual Weeding:
Family 7 10.17 4.72 22.56 3 6.68 5.21 14.82
Hired 3 5.01 4.34 14.15 5 10.94 7.82 21.32
Harvesting:
Family 12 12.4 6.5 27.6 6 12.9 15.5 28.6
Hired 8 6.6 4.1 16.2 4 9.00 3.9 11.5
Threshing:
Family 10 8.9 6.7 19.8 2 5.0 3.5 11.1
Hired 6 4.3 1.1 8.4 2 8.8 1.8 17.00
Others: ,
Family 12 7.1 4.0 15.7 5 9.9 2.9 22.1
Hired l 2.4 5.5 2 5.1 2.4 16.0
Total Mean”:
Family 13 55.4 27.0 123.0 6 47.7 42.8 105.9
Hired 13 20.2 7.6 32.0 5 53.9 11.3 108.6
Total 75.5 155.0 101.6 214.6

 

 

 

 

 

 

Note: a/ Converted from hours to number of days using 8 hours equal to one day.

 

bl Standard Deviation of the number of days.
cl Family Labor is valued at its opportunity cost.
(1! Calculated as the weighted average.

For the traditional farmers, the largest share of total labor was used for land preparation
(24.0%), followed by harvesting (20.6%), planting (19.0%), threshing (11.7%), a combination of
other activities such as cleaning and watering (8.9%), manual weeding (8.8%), and agrochemical

applications (7.0%) (Table 4.2.1.2).

43

For modern farmers, the largest share of total labor was used for land preparation
(25.8%), followed by harvesting (20.4%), planting (18.6%), manual weeding (13.4%), sum of
other activities such as watering, cleaning and winnowing (10.8%), threshing (5.0%), and
application of agrochemicals (6.1%) (T able 4.2.1.3).

With respect to their source of labor, traditional farmers’ total labor consisted of 73.4%
family labor and 26.6% hired labor, while modern farmers’ total labor consisted of 51.5% family
labor and 48.5% hired labor.

Table 4.2.1.2 Sum and Percentage of Traditional Farmers (N = 13) Family, Hired and Total
Labor Use (man-days/ha) by Operation, Postrera 2000, Yoro. _

 

 

 

 

 

 

 

 

T of r ion Family %of Hired Labor‘ % of Total Qbor‘ % of
. Labor‘ (man- T? (man-daygha) 3?- (man- T—Lr
a s/ha gays/ha)

Land Preparation 165.0 16.8 71.0 7.2 236.0 24.0
Planting. 120.5 12.3 66.5 6.8 186.9 19.0
App. Fertilizer 1.3 0.1 1.3 0.1 2.5 0.3
App. Herbicide 18.3 1.9 15.0 1.5 33.3 3.4
App. Insecticide 21.2 2.2 11.3 1.1 32.5 3.3
App. Fungicide 0.0 0.0 0.0 0.0
Manual Weeding 71.2 7.2 - 15.0 1.5 86.2 8.8
Harvesting 149.0 15.2 52.9 5.4 201.9 20.6
Threshing 89.3 9.1 25.8 2.6 115.1 11.7
Others 84.9 8.6 2.5 0.2 87.4 8.9
Total Labor Man-days 720.8 73.4 261.1 26.6 981.9 100.0

 

 

 

 

a/ It represents the sum of labor man-days/ha by labor type used by all farmers in the sample for each operation, which is used to
compute the percentage of the total labor man-days/ha by type of labor and operation.

bl Represents the percent of the total labor man-days, used by the farmers in the sample, by type of labor to carry out the each
operations in bean production.

% ofTL = (Family or hired Labor man-days per hectare! Total sum ofLabor man-days per hectare)‘100.

cl Is the sum offamily and hired labor man-days/ha

44

 

Table 4.2.1.3 Sum and Percentage of Modern Farmers (N = 6) Family, Hired and Total Labor
Use (man-days/ha) by Operation, Postrera 2000, Yoro.

 

 

 

 

 

T of i n Family % of Hired Labor' % of Total Labpr‘ % of
Labor"I (man- T? (man-days/ha) E (man-days/ha) E
M
Land Preparation 83.5 15.0 60.1 10.8 143.6 25.8
Planting 47.6 8.6 55.9 10.1 103.5 18.6
App. Fertilizer 7.5 1.4 0.0 0.0 7.5 1.4
App. Herbicide 2.5 0.4 2.5 0.4 5.0 0.9
App. Insecticide 11.7 2.1 9.2 1.7 20.9 3.8
App. Fungicide 0.0 0.0 0.0 0.0
Manual Weeding 20.0 3.6 54.7 9.8 74.7 13.4
Harvesting 77.2 13.9 35.9 6.5 113.1 20.4
Threshing . 10.0 1.8 17.5 3.2 V 27.6 5.0
Others 49.7 8.9 10.1 1.8 59.9 10.8
Total Labor Man-days 286.4 51.5 269.4 48.5 555.8 100.0

 

 

 

 

a! It represents the sum of labor man-days/ha by labor type used by all farmers in the sample for each operation, which is used to
compute the percentage of the total labor man-days/ha by type of labor and operation.

b/ Represents the percent of the total labor nun-days, used by the farmers in the sample, by type of labor to carry out the web
Operations in bean production.

% of TL = (Family or hired Labor man-days per hectare / Total sum of Labor man-days per hectare)‘ 100.

cl Is the sum of family and hired labor man-days/ha

er Cpsts22 by Type of Operations, Total labor costs for the traditional farmers
averaged US$155.0/ha, compared to US$214.6/ha for modern farmers (Table 4.2.1.1).

For traditional farmers, the largest share of total labor cost per hectare was for land
preparation (22.9%), followed by harvesting (20.6%), planting (17.8%), threshing (12.1%), a
combination of other activities such as cleaning, watering and winnowing (10.1%), manual
weeding (9.7%) and agrochemical application (6.8%) (Table 4.2.1.4).

For modern farmers, the largest share of total labor cost was for land preparation
(27.3%), followed by harvesting (18.4%), planting (18.2%), manual weeding (12.8%), a
combination of other activities such as watering, cleaning and winnowing (12.1%), agro
chemical applications (6.4%), and threshing (4.8%) (Table 4.2.1.5).

For traditional farmers, hired labor cost accounted for 16.4% of average total labor cost

per hectare, compared to 46.1% for modern farmers.

 

2" Family Labor is valued at the wage rate (i.e. US$2.22/day) for postrera 2000.

45

 

Table 4.2.1.4 Sum and Percentage of Traditional Farmers (N = 13) Family, Hired and Total
Labor Cost (U S$/ha)by Operation, Postrera 2000, Yoro.

 

 

 

1er of Ogration Family Labor' % of Hired Labor' % of Total Labor‘ 1/2_o_f

(pssma) “F1? (USS/ha) T—LC‘ (pss/ha) T_L_c_:
Land Preparation 366.2 19.1 73.6 3.8 439.8 22.9
Planting 267.3 13.9 73.6 3.8 340.9 17.8
App. Fertilizer 2.8 0.1 2.8 0.1 5.6 0.3
App. Herbicide 40.6 2.1 22.6 1.2 63.3 3.3
App. Insecticide 47.1 2.5 15.1 0.8 62.2 3.2
App. Fungicide 0.0 0.0 0.0 0.0
Manual Weeding 158.0 8.2 28.3 1.5 186.3 9.7
Harvesting 330.7 17.2 64.8 3.4 395.5 20.6
Threshing 198.2 10.3 33.7 1.8 231.9 12.1
Others 188.5 9.8 5.5 0.3 194.0 10.1
Total Labor Cost 1599.4 83.3 320.1 16.7 1919.6 100.0

 

 

 

 

a/ It represents the sum of labor cost/ha by labor type used by all farmers in the sample for each operation, which is used to
compute the percentage of the total labor cost/ha by type of labor and operation.
bl Represents the percentage of the total labor cost/ha, used by the farmers in the sample, by type of labor to carry out the each
operations in bean production.
% of'l'LC = (Family or hired Labor costperhectare/Total sum ofall Labor cost per hectare)‘100.
cl Is the sum of family and hired labor cost per hectare.

Table 4.2.1.5 Sum and Percentage of Modern Farmers (N = 6) Family, Hired and Total Labor
Cost (U SS/ha) by Operation, Postrera 2000, Yoro.

 

 

 

T of er tion Family Labor‘I % of Hired Labor' % of Total Lappr‘ M

(pss/ha) “FE” mssnla) if? @5501!) 1pc;
Land Preparation 133.4 11.3 188.7 16.0 322.1 27.3
Planting 105.6 9.0 109.5 9.3 215.1 18.2
App. Fertilizer 16.7 1.4 0.0 0.0 16.7 1.4
App. Herbicide 5.6 0.5 5.7 0.5 11.2 1.0
App. Insecticide 25.9 2.2 20.8 1.8 46.7 4.0
App. Fungicide 0.0 0.0 0.0 0.0 0.0 0.0
Manual Weeding 44.5 3.8 106.6 9.0 151.1 12.8
Harvesting 171.4 14.5 45.9 3.9 217.3 18.4
Threshing 22.2 1.9 34.0 2.9 56.2 4.8
Others 110.4 9.4 32.1 2.7 142.5 12.1
Total Labor Cost 635.6 53.9 543.1 46.1 1178.7 100.0

 

 

 

 

 

a/ It represents the sum of labor cost/ha by labor type used by all farmers in the sample for each operation, which is used to
compute the percentage of the total labor cost/ha by type of labor and operation.
b/ Represents the percentage of the total labor cost/ha, used by the farmers in the sample, by type of labor to carry out the each
operations in bean production.
% of TLC = (Family or hired Labor cost per hectare / Total sum of all Labor cost per hectare)‘100.
cl Is the sum of family and hired labor cost per hectare by operation

4.2.2 Patterns and Costs of Input Use

Spec; Farmers in the sample most commonly planted seed that they had saved from their

previous harvest or obtained from other farmers. From the sample of 19 farmers, 13 farmers used

traditional varieties (TV) atan average seed rate of 53.3Kg/ha (Table 4.2.2.1) and six farmers

46

 

used modern varieties (MV), which they planted at an average seed rate of 54.3kg/ha. Average
total cost per hectare for seed (valued at its opportunity cost) was US$33.1/ha for traditional
farmers and US$30.9/ha for modern farmers (Table 4.2.2.1). Traditional farmers mostly planted
Concha Rosada and all of the modern farmers planted TC- 75.

Fenilizer: Only two farmers (one traditional and one modern farmer) in the sample used
fertilizer. The traditional farmer used 2.9kg/ha of urea (45-0-0) but no cost was reported, while
the modern farmer used 59.0kg/ha (urea cmd micronutrients) at an average cost of US$32.0/ha
(Table4.2.2.1).

11511111919; Eight farmers in the sample used herbicide, out of which seven were
traditional and one was a modern farmer. The traditional farmers used an average quantity of
1.91 liters/ha at an average cost of US$1 1.0/ha, while the modern farmer used an average of 1.4
liters/ha at a cost of US$8.5/ha (Table 4.2.2.1). All of the farmers used Paraquat.

Insecticide: Eleven farmers used insecticides, out of which six were traditional farmers
and five were modern farmers. Traditional farmers used an average quantity of 1.2 liters/ha at an
average cost of US$1 1.1/ha, while the modern farmers used 0.9 liters/ha at an average cost of
US$7.4/ha (Table 4.2.2.1). Forty-five percent of farmers who applied insecticide used Methyl

Parathion, while the rest used Cialotrina (27%), Endosulfan (18%), and methamidofos (9%).

47

Table 4.2.2.1. Average Quantity and Cost of Input Use Per Hectare by Type of Farmer, Postrera 2000,
Yoro, Honduras.

 

 

 

 

 

 

 

 

Lte_m Traditional (N= 13) Modern (N=6) Total =19
n' Qttyb Cost n' Qtty.b Cost 11‘ Qt . Cost
(U SS/ha) (U SS/ha) (U SS/ha)
Seed (Kg/ha) 13 53.3 33.1 6 54.3 30.9 19 53.6 32.4
Fertilizer (Kg/ha) 1 2.9 0.0 1 50.0 32.0 2 26.4 32.0
Herbicide (l/ha) 7 1.9 11.0 1 1.4 8.5 8 1.9 10.7
Insecticide (llha) 6 1.2 11.1 5 0.9 7.4 11 1.1 9.4
Fungicide (g/ha) 0 NA NA 0 NA NA 0 NA NA
Traction Contractc 0 NA NA 0 NA NA 0 NA NA
(days/ha)
a/ Number of farmers by type using the particular item.
bl Mean quantity per hectare.

cl Com per hectare of traction contract includes oxen or a tractor hired/used

4.2.3 Profitability Analysis

Various measures of costs and returns are reported in the Table 4.2.3.1 and presented
below.

. Revenue:

Yield. Price and Gross Income: On average, traditional farmers obtained a yield of
288kg/ha' (SD = 159) and modern farmers obtained 423.3kg/ha (SD = 326). Modern farmers
received an average price of US$0.64/kg, while traditional farmers received only US$0.51/kg.
Traditional farmers earned a Gross Income (GI)23 of US$146.9/ha, which was much lower than
US$270.9/ha earned by the modern farmers.

Costs:

Total Entegprise Cost (IEC): For traditional farmers, TEC averaged US$208.4/ha, which
consisted of the opportunity cost of family labor (59.0%), input cost (21.2%), hired labor cost
(15.4%), and opportunity cost of equity capital (4.4%) (Table 4.2.3.2). Operating cost, excluding

the opportunity cost of equity capital and family labor, averaged US$76.2/ha (Table 4.2.3.1).

—._._

3 Gross Income was calculated by multiplying average yield by average price received in the market.

48

For modern farmers, TEC averaged US$276.6, which consists of the opportunity cost of
hired labor (39.3%), family labor cost (38.3%), input cost (15.8%), and the opportunity cost of
equity capital (6.6%) (Table 4.2.3.2). Operating cost, excluding the opportunity cost of equity
capital and family labor, averaged US$152.4/ha (Table 4.2.3.1).

Per pnit Cost of Production (1'. e. total enterprise cost divided by the average yield) for
traditional farmers was US$0.72/ha compared to US$0.65/ha for modern farmers.

Returns:

Enterprise Gross Margin (i. e. GI less operating cost) for traditional farmers averaged
US$70.7/ha, while it was US$118.5/ha for modern farmers.

Retprns to Family Land, Lebor and Management (EfLLM) (i. e. EGM less the
opportunity cost of equity capital) for traditional farmers averaged US$61 .5/ha, compared to
US$100.3/ha for modern farmers.

Returns to Family Land, Labor and Management per Day (1'. e. RFLLM divided by
number of family labor days) for traditional farmers averaged US$1.1/day, while it was
US$2.1/Day for modern farmers.

Return to Family Land and Management (I e. TEC deducted from GI) for traditional

farmers averaged minus US$61 .5/ha, while it averaged minus US$57 for the modern farmers.

49

Table 4.2.3.1. Average Yields, Prices, Costs and Returns by Type of Farmers, Postrera 2000,

Yoro, Honduras.

 

 

 

 

 

 

 

 

 

 

 

Traditional Modern Sig. (t-
Items (N=13) (N=6) test)‘
evenue:
Average Yield (Kg/ha) 288.0 423.3 0.23
Adjusted Price (USS/Kg) 0.5 0.6 0.01‘
(1) Gross Income (USS/ha) 146.9 2709 0.06”
iCosts: ‘
Input Cost“ (USS/ha) 44.2 43.7 0.97
Cost of Equipment (USS/ha) 0.0 0.0
Hired Labor Cost (USS/ha) - 32.0 108.6 0.04’
(2) Total Operating Cost (USS/ha) 76.2 152.4
(3) Opportunity Cost of Equity Capitalc (USS/ha) 9.1 118.3
(4) Family Labor
(4.1) Number of Family Labor Days/ha 55.4 47.7 0.70
(4.2) Family Labor Cost‘ (USS/ha) 123.0 105.9 0.70
(5) Total Enterprise Cost (USS/ha) [2+3+4. 2] 208.4 276.6
(6) Per Unit Cost° (USS/kg) 0.7 0.6
HProfitability Measures
(7) Enterprise Gross Margin (USS/ha) [1-2] 70.7 118.5 0.21
(8) Return to Family Land, Labor and Management (USS/ha) [7-3] 61.5 100.3
(9) Return to Family Land, Labor and Management per Day
loss/Day) [8/4.1] 1.1 2.1
(10) Return to Family Land and Management (USS/ha) [84.2 or 1-5] -61.5 -5.7
al T-test for equality of means:
‘ Significant at 5% significance level.
“ Significant at 10% significant level.
bl Mean of the aggregated total cost of inputs (seeds, fertilizers, insecticides, fungicides and herbicides).
clOpportunitycostofequity capital was valuedat 12% ofOperating Cost
d/ Opportunity cost family labor was valued at the wage rate of US$2.22/Day.
e/ Computed by dividing total enterprise cost by average yield
Table 4.2.3.2. Average Total Enterprise Cost (U S$/ha), Postrera 2000, Yoro, Honduras.
Item Traditional (N=13) Modern (N= 6) Total (N=19)
Cost % of Cost % of Cost % of
(USS/ha) TEC (USS/hay TEC (USS/ha) TEC
Input Costs' 44.2 21.2 43.7 15.8 44.0 20.2
Traction Hire Costs NA NA NA NA NA NA
Family Labor cost 123.0 59.0 105.9 38.3 117.6 54.0
Hired Labor Cost 32.0 15.4 108.6 39.3 45.4 20.9
Equity Capital Cost 9.1 4.4 18.3 6.6 10.7 4.9
Total Enterprise Cost (TEC) 208.4 100.0 276.6 100.0 217.8 100.0

 

 

 

 

 

a/ Total aggregate mean of the cost of inputs (seeds, fertilizers, insecticides, fungicides and herbicides).

50

4.2.4 Sensitivity Analysis“-

The results of the sensitivity analysis are reported for traditional (Table 4.2.4.1) and
modem (Table 4.2.4.2) farmers, with respect to a re 50 percent change in bean yield and bean
price, holding operating cost” constant.

For traditional farmers (Table 4.2.4.1), holding operating cost (US$76.2/ha) and one of
either yield (288.0kg/ha) or price (U S$0.5 1/kg) constant, the EGM falls below zero with a 50%
decrease in price or yield. On the other hand, holding only operating cost constant, EGM falls
below zero with 30% decrease in price and yield.

For modern farmers (Table 4.2.4.2), holding operating cost (U S$152.4) and one of either
yield (423.3kg/ha) or price (U S$0.64/ha) constant, EGM falls below zero with a 50% decrease
in price or yield. On the other hand, holding operating cost constant, EGM falls below zero with

20% decrease in both price and 30% in yield and vice versa.

Table 4.2.4.1 Traditional Farmers: Sensitivity Analysis on Enterprise Gross Margin with Changing
Bean Yield and Price, Postrera 2000, Yoro, Honduras.

 

 

 

 

 

 

  
   

 

 

 

Bean Price (uss/Kg)

026 031 0.36 041 046 0.510.56 0.61 0.66 0.71 0.77

Yield (Kg/ha) % Chan_ 50% ”-40% 30% -20% 40%“ 0% 10% 20% 30% 40% 50%
143.99 -50° l :=I p. 4.59 11.93 19.27 26.62 33.96
172.78 40843 . 3.12 11.93 20.7 29.55 38.36 47.18 55.99
201.58 -30 9,,“ Q 605 16.3 26.62 36.9 47.18 57.46 67.74 78.02
230.381 20%. :39 6.05 178 29.6 41.3 53.1 64.8 76.55 88.3 100.1
259.17 409.13w 3.12 16.3 29.55 42.8 55.99 69.2 82.42 95.64 108.9 122.1
287.97 e3 11.9 26.6 41.3 56 70.67 85.4 100.1 114.7 129.4 144.1
316.77 10° 4.59 20.7 36.9 53.05 69.2 85.36 102 117.7 133.8 150 166.1
345.56 20° 11.93 29.6 47.2 64.8 82.4 100.1 118 135.3 152.9 170.5 188.2
374.36 30°/19.27 38.4 57.5 76.55 95.6 114.7 134 152.9 172 191.1 210.2
403.16 40°/ 26.62 47.2 67.7 88.3 109 129.4 150 170.5 191.1 211.7 232.2
431.96 50°/ 33.96 56 78 100.1 122 144.1 166 188.2 210.2 232.2 254.3]

 

 

2" Operating cost (input and hired labor cost) is held constant, assuming that yield changes are due to weather related
risk.

25 The operating costs do not include the opportunity cost of family labor and equity capital. Thus, the positive
scenario may change if we included these cost.

51'

Table 4.2.4.2 Modern Farmers: Sensitivity Analysis on Enterprise Gross Margin with Changing Bean Yield
and Price, Postrera 2000, Yoro, Honduras.

 

Bean Price (USS/Kg)

 

0.32

0.38 0.45 0. 51

0.58 0.64 0.70 0.77 0.83

0.90 0.96

 

 

% Chan -50%

 

 

.; a
“A“ “4;“.-
x

20°/ 10.17
30°/ "23.72
40°/ 37.26
50‘/ 50.81

 

 

-- ...~.e
. .
... ‘. .... .... ._..
veshfic exit-3R-
.

 

-30° -20% -1o%

.“

- ;.:,_.~.--=: 13.3 42.158

37.26 64.35
56.23 86.03
75.19 107.7
94.15 129.4
113.1 151
132.1 172.7

._ '5 ”m 8‘ Kat

     

nnnnnn

164.6
189
213.4

226.9
254

 

10%

20%

- . 10.17

42.68
75. 19
107.7
140.2
172.7
205.2
237.7
270.2
302.8
335.3

30%
23.72
58.94
94.15
129.4
164.6
199.8
235
270.2
305.5
340.7
375.9

40% 50%
37.26 50.81
75.19 91.45
113.1 132.1

151 172.7

189 213.4
226.9 254
264.8 294.6
302.8 335.3
340.7 375.9
378.6 416.5
416.5 457.2

 

 

4.3 Dgartment: Yoro, Honduras, Pn'mera 2000.

The sample included 6 farmers, who planted traditional bean varieties and 12 farmers

who planted modern bean varieties. In the discussion that follows, farmers who planted

traditional varieties are referred to as traditional farmers and those who planted modern varieties

are referred to as modern farmers.

4.3.1 Patterns and Costs of Labor Use

Leber Use by Type ef Operation: On average, traditional farmers used a total of 122.6

man-days/ha, compared to 56.5man-days/ha for modern farmers (Table 4.3.1.1).

In addition, Table 4.3.1.1 reports the mean number of man-days and associated cost of

family and hired labor, by farming operation, for modern and traditional farmers. Because the

number of farmers who carried out each operation varied greatly, the mean reported is the mean

man-days (costs) for those farmers who actually carried out the respective operations. In this

52

regard, the sum of the means for family and hired labor man-days under each farming operation

(Table 4.3.1.1) do. not represent the total average man-days for the respective operation.

Table 4.3.1.1. Labor Use (average man-days/ha), Primera 2000, Yoro, Honduras.

 

 

 

 

Operation and Labor Traditional (N 8 6) . Modern (N 8 12)
Type Ne, ef Days' _Co_st Ne. of Days' %
n Mean S.D.b (QS§/ha)° p Mea_n S.Db (nglhaf

Land Preparation:

Family 6 11.9 10.0 25.7 10 4.1 3.7 8.9

Hired 4 20.7 13.8 24.8 11 8.4 4.9 16.3
Planting

Family 6 6.8 3.9 14.7 10 3.5 2.1 7.6

Hired 5 11.2 5.8 20.6 10 7.3 4.4 18.1
App. Fertilizer:

Family 0 NA NA NA 2 1.5 1.0 3.2

Hired 0 NA NA NA 0 NA NA NA
App. Herbicide:

Family 6 5.3 2.8 11.4 6 2.4 2.6 5.3

Hired 0 NA NA NA 7 3.2 1.5 9.7
App. Insecticide:

Family 3 3.3 1.5 7.2 7 2.8 3.3 6.1

Hired 2 1.8 0.8 4.5 4 2.0 0.6 4.6
App. Fungicide:

Family 0 NA NA NA 0 NA NA NA

Hired 0 NA NA NA 1 2.5 NA 5.8
Manual Weeding:

Family - 4 23.7 21.7 51.4 7 4.7 3.4 10.1

Hired 3 13.2 1.2 21.8 5 6.5 6.3 16.9
Harvesting:

Family 5 26.4 16.2 57.1 9 8.0 9.0 17.3

Hired 4 14.8 8.3 50.9 9 7.0 4.2 13.7
Threshing:

Family 4 9.3 2.5 20.1 10 3.6 3.6 7.9

Hired 3 3.2 3.2 4.3 7 8.3 9.1 20.0
Others:

Family 3 3.3 1.4 7.2 9 4.0 2.4 8.7

Hired 1 5.0 11.5 2 1.3 1.7 3.8
T otal Mean”:

Family 6 71.2 49.5 154.3 12 24.3 21.5 52.5

Hired 5 51.3 16.5 100.9 11 32.2 19.2 76.9

Total 122.6 255.2 56.5 129.4

 

 

 

 

 

 

Note: a/ converted from hours to number of days using 8 hours equal to one day.
Bl Standard Deviation of the number of days.
Cl Family Labor is valued at its opportunity cost.
D/ Calculated as the weighted average.

53

For the traditional farmers, the largest share of total labor was used for harvesting

(28.0%), followed by land preparation (22.5%), manual weeding (19.7%), planting (14.2%),

threshing (6.8%), agrochemical applications (6.6%), and a combination of other activities such as

cleaning and watering (2.2%) (Table 4.3.1.2).

For modern farmers, the largest share of total labor was used for harvesting (21.0%),

followed by land preparation (20.7%), planting (16.8%), threshing (14.6%), agrochemocal

application (10.5%), manual weeding (10.1%), and a combination of other activities such as

watering, cleaning and winnowing (6.0%) (Table 4.3.1.3).

With respect to their source of labor, traditional farmers’ total labor consisted of 62.6%

family labor and 37.4% hired labor, while modern farmers’ total labor consisted of 45.0% family

labor and 55.0% hired labor.

Table 4.3.1.2 Sum and Percentage of Traditional Farmers (N = 6) Family, Hired and Total Labor
Use (man-days/ha) by Operation, Primera 2000, Yoro.

 

 

 

 

 

 

 

Tm of gnngion Family %of Hired Labor" % of Total Qbor‘ % of
' ' Labor' (men- T—Lr (man-deyslha) E (man- fir
da s/ha days/ha)

Land Preparation 71.2 10.4 82.7 12.1 154.0 22.5
Planting 40.7 6.0 56.0 8.2 96.7 14.2
App. Fertilizer 0.0 0.0 0.0 0.0 0.0 0.0
App. Herbicide 31.6 4.6 0.0 0.0 31.6 4.6
App. Insecticide 9.9 1.5 3.7 0.5 13.6 2.0
App. Fungicide 0.0 0.0 0.0 0.0 0.0 0.0
Manual Weeding 94.9 13.9 39.6 5.8 134.5 19.7
Harvesting 131.9 19.3 59.2 8.7 191.1 28.0
Threshing 37.1 5.4 9.6 1.4 46.6 6.8
Others 10.0 1.5 5.0 0.7 15.0 2.2
Total Labor Man-days 427.3 62.6 255.9 37.4 683.2 100.0

 

 

 

 

 

a! It represents the sum of labor man-days/ha by labor type used by all farmers in the sample for each operation, which is used to

compute the percentage of the total labor man-days/ha by type of labor and operation.

BlRepresentsthepercentofthetotal laborman-days,usedbythefarmersinthesample,bytypeoflabortocarryouttheeach

operations in bean production.

% ofTL = (Family or hired Labor man-days per hectare / Total sum ofLabor man-days per hectare)‘100.

CI Is the sum offarnily and hired labor man-days/ha

54

Table 4.3.1.3 Sum and Percentage of Modern Farmers (N = 12) Family, Hired and Total Labor
Use (man-days/ha) by Operation, Primera 2000, Yoro.

 

 

 

 

 

 

gm of Qgrafion Family ' % of Hired Labor' % of Total Labor‘ '/o of
Labor‘ (man- TL:- (man-days/ha) E (man-days/ha) TLT
' da slha

Land Preparation 41.3 6.4 92.1 14.3 133.4 20.7
Planting 35.1 5.4 73.2 11.4 108.2 16.8
App. Fertilizer 2.3 0.4 0.0 0.0 2.3 0.4
App. Herbicide 14.7 2.3 22.4 3.5 37.1 5.8
App. Insecticide 19.6 3.0 7.9 1.2 27.5 4.3
App. Fungicide 0.0 0.0 2.5 0.4 2.5 0.4
Manual Weeding 32.7 5.1 32.4 5.0 65.2 10.1
Harvesting 71.9 11.1 63.3 9.8 135.2 21.0
Threshing 36.5 5.7 57.8 9.0 94.3 14.6
Others 36.2 5.6 2.6 0.4 38.8 6.0
Total Labor Man-days 290.2 45.0 354.2 55.0 644.4 100.0

 

 

 

 

 

alItrepresentsthesrnnoflaborman—dayslhaby labortypeusedbyall farmers inthe sample foreach operation, which isusedto
compute the percentage of the total labor man-days/ha by type of labor and operation.

BlRepresentsthepercentofthetotal 1aborman-days,usedbythefarmersinthe samplebytypeoflabortocarryouttheeach
operations in bean production.

% ofTL = (Family or hired Labor man-days per hectare / Total sum ofLabor man-days perhectare)‘100.

Cl Is the sun of family and hired labor man-dayslha

Labor Costs26 by Type of Operations: Total labor costs for the traditional farmers
averaged US$255.2/ha, compared to US$129.4/ha for modern farmers (Table 4.3.1.1). .

For traditional farmers, the largest share of total labor cost per hectare was for harvesting
(34.2%), followed by manual weeding (18.9%), land preparation (17.7%), planting ( 13.4%),
agrochemical applications (6.9%), threshing (6.5%), and combination of other activities such as
cleaning, watering and winnowing (2.3%) (Table 4.3.1.4).

For modern farmers, the largest share of total labor cost was for harvesting (19%),
followed by land preparation (28.0%), planting (17.1%), threshing (15.7%), agrochemical
applications (13.0%), manual weeding (11.1%), and combination of other activities such as.
watering, cleaning and winnowing (6.2%) (Table 4.3.1.5).

For traditional farmers, hired labor costs accounted for 35.3% of average total labor cost

per hectare, compared to 54.9% for modern farmers.

 

2‘ Family Labor is valued at the wage rate (i.e. US$2.17/day) for primera 2000.

55

Table 4.3.1.4 Sum and Percentage of Traditional Farmers (N = 6) Family, Hired and Total Labor
Cost (U S$/ha) by Operation, Primera 2000, Yoro.

 

 

 

 

Tm of 0331i“ Family Labor‘ % of Hired Labor‘ % of Tetg Labor‘ M

ass/ha) TL fllSSIhg) r—LE‘ gees/erg) 1L9
LandPreparation ‘ 154.4 10.8 99.2 6.9 253.6 17.7
Planting ‘ 88.2 6.2 103.0 7.2 191.2 _ » 13.4
App. Fertilizer 0.0 0.0 0.0 0.0 0.0 0.0
App. Herbicide 68.5 4.8 0.0 0.0 68.5 4.8
App. Insecticide 21.6 1.5 9.0 0.6 30.5 2.1
App. Fungicide 0.0 0.0 0.0 0.0 0.0 0.0
Manual Weeding 205.6 14.4 65.3 4.6 270.9 18.9
Harvesting 285.7 20.0 203.5 14.2 489.2 34.2
Threshing 80.3 5.6 12.9 0.9 93.2 6.5
Others 21.7 1.5 11.5 0.8 33.2 2.3
Total Labor Cost 925.9 64.7 504.3 35.3 1430.2 100.0

 

 

 

 

alltrepresentsthesmnoflaborcostlhabylabortypeusedbyallfarmersinthesample foreachoperatioerhichisusedto
compute thepercentage of thetotal laborcost/habytype of laborand operation.
B/Representsthepercentage ofthetotallaborcost/ha,usedbythefarmersinthesample,bytypeoflabortocan'youttheeach
operationsinheanproduction.
960me=(Fami1yorhired1aborcostperhectarel'1‘otalsumofallIaborcostperhectare)‘100.
ClIsthestunoffamilyandhiredlaborcostperhectare.

Table 4.3.1.5 Sum and Percentage of Modern Farmers (N = 12) Family, Hired and Total Labor
Cost (USS/ha) by O eration, Primera 2000, Yoro.

 

 

 

 

W Family Labor‘ % of Hired Labor‘ % of Tetal er‘ M.

» (USS/ha) TLC‘ (USS/ha) TLC‘ (USS/ha) 1!
Land Preparation 89.4 6.4 162.9 11.6 252.3 18.0
Planting 75.9 5.4 162.8 11.6 238.8 17.1
App. Fertilizer 6.5 0.5 3.8 0.3 10.3 0.7
App. Herbicide 31.9 2.3 68.2 4.9 100.1 7.2
App. Insecticide 42.5 3.0 23.1 1.6 65.5 4.7
App. Fungicide 0.0 0.0 5.8 0.4 5.8 0.4
Manual Weeding 70.9 5.1 84.6 6.0 155.5 11.1
Harvesting 155.7 11.1 109.5 7.8 265.2 19.0
Threshing 79.1 5.7 140.2 10.0 219.4 15.7
Others 78.4 5.6 7.7 0.5 86.1 6.2
Total Labor Cost 630.2 45.1 768.5 54.9 1398.7 100.0

 

 

 

 

 

a/ It represents the sum of labor cost/ha by labor type used by all farmers in the sample for each operation, which is used to
compute the percentage of the total labor cost/ha by type of labor and operation.
Bl Represents the percentage of the total labor cost/ha, used by the farmers in the sample, by type of labor to carry out the weh
operations in bean production.
% ofTLC = (Family or hired Labor cost per hectare / Total sum ofall Labor cost per hectare)‘100.
Cl Is the sum of family and hired labor cost per hectare by operation.

4.3.2 Patterns and Costs of Input Use

Sm; Farmers in the sample mostly planted seed saved from previous harvest or obtained

from other farmers. From the sample of 18 farmers, six farmers used traditional varieties at an

average seed rate of 49.5kgs/ha and 12 farmers used modern bean varieties, which they planted

56

 

at an average seed rate of 46.4kg/ha (Table 4.3.2.1). Average total cost for seed used was
US$34.7/ha for traditional farmers and US$29.5/ha for modern farmers (Table 4.3.2.1). All
traditional farmers planted Concha Rosada and all of the modern farmers planted 7C- 75 .

Fertilizer: Four farmers (two traditional and two modern farmers) in the sample used
fertilizer. The traditional farmers used 16.1kg/ha at an average cost of US$5.8/ha, while the .
modern farmers used 18.4kg/ha at an average cost of US$5.5/ha (Table 4.3.2.1). Two farmers
(one traditional and one modern) used urea, while the other traditional and modern farmers used
micronutrients and [8460, respectively. ‘

Hefiyieiie; Fifteen farmers in the sample used herbicide, out of which six were traditional
and nine were modern farmers. The traditional farmers used 2.1 liters/ha at an average cost of
US$12.6/ha, while the modern farmers used 2.5 liters/ha at an average cost of US$15.00/ha
(Table 4.3.2.1). All of the farmers used Paraquat.

Ineegicide: Nine farmers used insecticide, out of which three were traditional farmers
and six were modern farmers. Traditional farmers used 1.4 liters/ha at an average cost of
US$14.1/ha, while the modern farmers used 0.4 liters/ha at an average cost ofUS$11.1/ha (Table
4.3.2.1). The most common insecticides used were Methyl Parathion, Cialotrina and
Endosulfan.

Fungicide: Only one traditional farmer in the sample used fungicide. The farmer used
1.4g/ha at an average cost of US$14.4/ha (Table 4.3.2.1).

Equipment Hired: Eight farmers in the sample rented pumps for applying agrochemicals.

Two of them were traditional farmers and the other six were modern farmers. The traditional

57

farmers used the pumps27 for an average of 0.9 man-days/ha and paid an average amount of
US$7.7/ha. The modern farmers used the pumps26 for an average of 2.7 days/ha and paid an

average ofUS$'11.1/ha (Table 4.3.2.1).

Table 4.3.2.1. Average Quantity and Cost of Input Use Per Hectare by Type of Farmer, Primera 2000,

 

 

 

 

 

 

 

 

Yoro, Honduras;
Lem Tradip'qofl (N= 6) Modernm=121 T 1 =18
n‘ Qtty Cost n' Qtty. Cost 11‘ Qtty. Cost
(U SS/ha) (U SSlha) (U SSIha)

Seed (Kg/ha) . 6 49.5 ' 34.7 12 46.4 29.5 18 47.4 31.2
Fertilizer (Kg/bar 2 16.1 5.8 2 18.4 5.5 4 17.3 5.6
Herbicide (l/ha)2~ 6 2.1 12.6 9 2.5 15.0 15 2.3 14.0
Insecticide (llha). 3 1.4 14.1 6 0.4 11.1 9 0.7 12.1
Fungicide (g/ha) 1 1.4 14.4 0 NA NA 1 1.4 14.4
Equipment Hire}

(days/ha) 2 0.9 7.7 6 2.7 11.1 8 2.2 10.3
al Number fatness under each category using the particular item.
Bl Mean quantity-

cl Cost per heetceof equipment hire, mainly pump for applying fertilizer, fungicide and insecticide.

4.3.3: Profitability Analysis

Various measures of costs and returns are reported in the Table 4.3.3.1 and presented

below.
Revenue:
Yield, Eg'ee are (leg Income (G1): On average, traditional farmers obtained a yield of

248.7kglha~ (SI). = 23 8) and the modern farmers obtained 303.9kglha (S.D. =277). Traditional
farmers received an average price of US$0.45/kg, while the modern farmers received
US$0.47/kg: Traditional farmers’ GI averaged US$111.9/ha, while it averaged US$142.9/ha for

modern farmers.

 

2’ Hand Sprayers and knap-sacks

58

Costs:

Totel Entegprise Cost (TEC): For traditional farmers, TEC averaged US$341.7/ha, which
consisted of the opportunity cost of family labor (45.2%), hired labor cost (29.5%), input cost
(17.2%), the opportunity cost of equity capital (5.9%), and equipment hire cost (2.3%) (Table
4.3.3.2). Operating cost, excluding the opportunity cost of equity capital and family labor, was
US$167.30/ha (Table 4.3.3.1).

For the modern farmers, TEC averaged US$203.9/ha, which consists of hired labor cost
(37.7%), opportunity cost of family labor (25.8%), input cost (23.1%), opportunity cost of equity
capital (8%), and equipment hire cost (5.5%) (Table 4.3.3.2). Operating cost, excluding the
opportunity cost of equity capital and family labor, was US$135.2/ha.

Per unit Cost of Productien (i. e. total enterprise cost divided by the average yield) for
traditional farmers was US$1.37/ha compared to US$0.67/ha for modern farmers.

Returns:

Enterprise Gross Margin (EGM) (i. e. GI less Operating Cost) for traditional farmers

averaged minus US$55.4/ha, while it averaged US$7.7/ha for modern farmers.
Regrn to Femily Land, Labor and Management (R_Ff1_.LM) (i. e. EGM less the opportunity

cost of equity capital) for traditional farmers’ averaged minus US$75.5/ha, while it averaged

minus US$8.5/ha for modern farmers.

Return to Family Land, Labor and Management per Day (i.e. RF LLM divided by man-

days of the family labor) for traditional farmers averaged minus US$1.1/day, while the modern

farmers averaged minus US$0.3/day.

59

Retpm to Family Land and Management (i. e. TEC deducted from GI) for the traditional

farmers averaged minus US$229.8/ha, while it averaged minus US$61 . 1/ha for the modern

farmers.

Table 4.3.3.1. Average Yields, Prices, Costs and Returns by Type of Farmers, Primera 2000,

Yoro, Honduras.

 

 

 

 

 

 

Traditions Modern Sig. (t-
Items 1 (N=6) =12) test)‘
evenue:
Average Yield (Kg/ha) 248.7 303.9 0.65
Adjusted Price (USS/Kg) 0.5 0.5 0.50
(1) Gross Income 111.9 142.9 0.50
ICosts:
Input Cost" (USS/ha) 58.7 47.2 0.31
Cost of Equipment (USS/ha) 7.7 11.1 0.72
Hired Labor Cost (USS/ha) 100.9 76.9 0.45
(2) Total Operating Cost (USS/ha) 167.3 135.2
(3) Opportunity Cost of Equity Capital‘ (USS/ha) 20.1 16.2
(4) Family Labor
(4. 1) Number of Family Labor Days/ha 71.2 24.3 0.07“
(4.2) Family Labor‘ Cost (USS/ha) 154.3 52.6 0.07"
(5) Total Enterprise Cost (USS/ha) [2+3+4. 2] 341.7 203.9
(6) Per Unit Coste (USS/Kg) 1.4 0.7
'Profitability Measures
(7) Enterprise Gross Margin (USS/ha) [1-2] -55.4 7.7 0.08"
(8) Return to Family Land, Labor and Management (USS/ha) [7-3] -75.5 -8.5
(9) Return to Family Land, labor and Management per day (USS/day) '
[8/4.1] -1.1 -0.3
(10) Return to Family Land and Management (USS/ha) [84.2 or 1-5] -229.8 -61.1

 

 

a/ T-test for equality of means:
" Significant at 5% significance level.
“ Significant at 10% significant level.

bl Mean of the aggregated total cost of inputs (seeds, fertilizers, insecticides, fungicides and herbicides).

cl Opportunity cost of equity capital was valued at 12% of Operating Cost
dl Opportunity cost family labor was valued at the wage rate of US$2. l7/Day.
e! Computed by dividing total enterprise cost by average yield.

60

Table 4.3.3.1. Average Total Enterprise Cost (U S$/ha), Primera 2000, Yoro, Honduras.

 

 

 

 

 

 

Item Traditional (N=6) Modern (N= 12) T9191 1E=18)

Cost % of Cost % of .Cost % of

(USS/ha) TEC (USS/ha) TEC (USS/ha) ’ TEC
Input Cost‘ 58.7 17.2 47.2 23.1 51.0 21.8
Equipment Hire Costb 7.7 2.3 11.1 5.5 10.3 4.4
Family Labor Cost 154.3 45.2 52.6 25.8 86.5 36.9
Hired Labor Cost 100.9 29.5 76.9 37.7 70.7 30.2
Equity Capital Cost 20.1 5.9 16.2 8.0 15.8 6.8
Total Enterprise Cost (TEC) 341. 7 100. 0 203. 9 100. 0 234.3 100.0

 

a/ Total aggregate mean of the cost of inputs (seeds, fertilizers, insecticides, fungicides and herbicides).

bl Hire of pump for applying fertilizer, fungicide and insecticide.

4.3.4 Sensitivity Analysis”:

The results of the sensitivity analysis are reported for traditional (Table 4.3.4.1) and

modern (Table 4.3.4.2) farmers with respect to a :1: 50 percent change of bean yield and price,

holding operating cost29 constant.

For traditional farmers (Table 4.3.4.1), holding operating cost (U S$167.3/ha) and one of

either yield'(248.7kg/ha) or price (U SSO.45/kg) constant, EGM (minus US$55.4/ha), became

positive with a 50% increase in price or yield. Holding only the operating cost constant, EGM

became positive with 30% increase in price and 20% increase in yield and vice versa.

For modern farmers (Table 4.3.4.2), holding operating cost (US$135.2/ha) and one of

either yield (303.9kg/ha) or price (US$0.47) constant, EGM falls below zero with a 10%

decrease in price or yield.

 

2‘ Operating cost (input and hired labor cost) are held constant, assuming that yield changes are due to weather

related risk.

 

29 The operating costs do not include the oppommity cost of family labor and equity capital. Thus, the scenario will
be worse if we included these cost.

61

Table 4.3.4.1 Traditional Farmers: Sensitivity Analysis on Enterprise Gross Margin with Changing Bean Yield
and Price, Primera 2000, Yoro, Honduras.

 

BeanPn'ce(USS/Kg)

0.23 0.27 0.32 0.36 0.41 0.45 0.5 0.54 0.59 0.63 0.68
Yield (Kg/11a) % Chan e -50% 40% -30% -20% 40% 0% 10% 20% 30% 40% 50°/

124.36 -50°/ - ‘ “ - "
149.23 -40°/ .
174.1 aw ,- '
198.98i -20°/ ' . 1.;22 ‘. - "
223.85 -10°/ - , ,3, %»4 , ~ .-, ' ..
248.72 0°/ . . 0.59
273.59 10°/ j ‘1. fa,” , 4 ' .4 - 5.06 17.37
298.46 20°/ - .. - - 7.3 20.73 34.16
323.34 30°/ ‘ "‘3 " ~ " , .- 7.3 21.85 36.4 50.95
348.21 40°/ - " - v; i“ 5.06 20.73 36.4 52.07 67.74
373.08 50? ~- ,. ._ ' _ 0.59 17.37 34.16 50.95 67.74 84.53

 

 

 

 

 

4’

 

 

 

Table 4.3.4.2. Modern Farmers: Sensitivity Analysis on Enterprise Gross Margin with Changing Bean Yield and
Price, Primera 2000, Yoro, Honduras.

 

Bean Price (USS/Kg)

0.24 028 033 0.38 0.42 0.47 0.52 0.56 0.61 0.66 0.71
Yield (1ng °/. Chane 750% 40% -30% -20% -10% 0% 10% 20°/. 30% 40% 50°

151.97 -500 ,4. w '<. -. 1'. ”fiat" :-- 833m, ‘—‘

182.36 ,_-'_'i_ 1,2,-'__,'-. _ . .52.
243.15 -~ . .3 ~ ' gs: 3‘33?“ 1.98 13. 41 24.83 36.26
273.55 a 838%,,» 6.26 19.12 31.98 44.83 57.69
303.94 g 7.69 21.98 36.26 50.55 64.83 79.12,
334.33 626 21.98 37.69 53.4 69.12 84.83 100.6
364.73 a 1.981912 36.26 53.4 70.55 87.69 104.8 122
395.12 343 3.??? 13.41 31.98 50.55 69.12 87.69 106.26 124.8 143.
425.52 0,, 483 24. 83 44.83 64.83 84.83 104.8 124.83 144.8 164.
455.91 sovai’asfi 14.83 36.26 57.69 79.12 100.55 122 143.4 164.8 186.3

 

 

 

 

 

  
    
  

 

    

 

    

 

 

 

62

 

4.4 Department: Olancho, Honduras, Postrera I 999.

The sample included 9 farmers who planted traditional bean varieties and 11 farmers who
planted modern bean varieties. In the discussion that follows, farmers who planted traditional
varieties are referred to as traditional farmers and those who planted modern varieties are
referred to as modern farmers. 2

4.4.1 Patterns and Costs of Labor Use

Labor Us; by Tm; of Operation: On average, traditional farmers used 36.4man-days/ha,
compared to 37.5man-days/ha for modern farmers (Table 4.4.1.1). '

In addition, Table 4.4.1.] reports the mean number of man-days and associated cost of
family and hired labor, by farming operation, for modern and traditional farmers. Because the
number of farmers who carried out each operation varied greatly, the mean reported is the mean
man-days (costs) for those farmers who actually carried out the respective operations. In this
regard, the sum of the means for family and hired labor man-days under each farming operation

(Table 4.4.1.1) do not represent the total average man-days for the respective operation.

63

 

 

 

 

 

Table 4.4.1.1. Labor Use (average man-days/ha), Postrera 1999, Olancho, Honduras.
Operation and Labor Traditional (N =9) Modern (N =11)
Type No. of Days' 92; No. of Days' Egg
0 Mean so; mss/har 8. Meg §_.9_° (psi/liar

Land Preparation:

Family 9 1 6.3 13.8 16.6 5 3.2 2.2 8.4

Hired 6 8.7 5.7 18.9 10 8.9 4.6 ' 23.4
Planting:

Family 8 2.4 2.0 6.2 6 1.9 1.7 4.9

Hired 8 8.8 7.5 19.1 11 5.8 4.0 15.6
App. Fertilizer:

Family 0 NA NA NA 0 NA NA NA

Hired 0 NA NA NA 2 2.7 0.8 7.3
App. Herbicide:

Family 5 1.4 0.5 3.7 5 1.1 0.2 2.8

Hired 2 2.0 1.8 4.2 4 2.1 1.2 6.4
App. Insecticide:

Family 3 1.1 0.3 2.8 3 1.1 0.3 2.9

Hired 0 NA NA NA 3 2.7 3.2 7.5
App. Fungicide:

Family 0 NA NA NA 1 1. 1 NA 2.8

Hired 0 NA NA NA 0 NA NA NA
Manual Weeding:

Family 2 0.8 0.4 2.1 l 0.7 1.9

Hired 2 7.5 1.5 13.7 4 8.3 1.6 22.6
Harvesting: ‘

Family 9 1.0 0.8 2.7 , 7 2.7 3.4 7.0

Hired 9 6.9 4.7 13.3 10 9.7 3.3 24.3
Threshing:

Family 7 0.7 0.4 2.0 6 0.9 0.4 2.3

Hired 7 2.2 1.7 7.5 10 4.0 1.5 13.1
Others:

Family 2 2.7 2.3 7.0 0 NA NA NA

Hired 0 NA NA NA 0 NA NA NA
Total Mean”:

Family 9 12.0 16. 7 31.5 10 6.2 6.] 16.2

Hired ' 9 24.4 19.4 52. 7 1 1 31.3 14. 6 84. 9

Total 36.4 84.2 37.5 101.1

 

 

 

 

 

 

Note: a/ converted from hours to number of days using 8 hours equal to one day.
b/ Standard Deviation of the number of days.
cl Family Labor is valued at its opportlmity cost.
11! Calculated as the weighted average.

For the traditional farmers, the largest share of total labor was used for land preparation
(33.4%), followed by planting (27.3%), harvesting (21.9%), threshing (6.3%), manual weeding
(5.1%), agrochemical applications (4.4%), and a combination of other activities such as cleaning

and watering (1.6%) (Table 4.4.1.2).

For modern farmers, the largest share of total labor was used for harvesting (28.4%),
followed by land preparation (26.0%), planting (18.4%), threshing (11.1%), manual weeding
(8.3%), and agrochemical application (7.8%) (Table 4.4.1.3).

With respect to their source of labor, traditional farmers’ total labor consisted of 32.9%
family labor and 67.1% hired labor, while modern farmers’ total labor consisted of 15.2% family

labor and 84.8% hired labor.

Table 4.4.1.2. Sum and Percentage of Traditional Farmers (N = 9) Family, Hired and Total Labor

 

Use (man-days/ha) by Operation, Postrera 1999, Olancho.

 

 

 

 

 

 

T of tlon Family %of Hired Labor“ % of Total Lgbor‘ 74%!
Labor' (man- -T—Lr (man-gayslha) TLT (man- fl:
gays/ha) a

Land Preparation 57.0 17.4 52.4 16.0 109.5 33.4
Planting 19.0 5.8 70.5 21.5 89.5 27.3
App. Fertilizer 0.0 0.0 0.0 0.0 0.0 0.0
App. Herbicide 7.1 2.2 3.9 1.2 11.0 3.4
App. Insecticide 3.2 1.0 0.0 0.0 3.2 1.0
App. Fungicide 0.0 0.0 0.0 0.0 0.0 0.0
Manual Weeding 1.6 0.5 15.0 4.6 16.6 5.1
Harvesting 9.4 2.9 62.4 19.0 71.7 21.9
Threshing 5.3 1.6 15.4 4.7 20.7 6.3
Others 5.4 1.6 0.0 0.0 5.4 1.6
Total Labor Man-days 107.9 32.9 219.7 67.1 327.6 100.0

 

 

 

 

 

a/ It represents the sum of labor man-days/ha by labor type used by all farmers in the sample for each operation, which is used to

compute the percentage of the total labor man-days/ha by type of labor and operation.

b/Representsthepercentofthetotallaborman-days,usedbythefmmelsinmesamplebytypeoflabortocan'youttheeach

operations in bean production.

% of TL = (Family or hired Labor man-days per hectare / Total sum of Labor man-days per hectare)‘100.

cl Is the sum of family and hired labor man-days/ha

65

Table 4.4.1.3 Sum and Percentage of Modern Farmers (N = 11) Family, Hired and Total Labor
Use (man-days/ha) by Operation, Postrera 1999, Olancho.

 

 

 

 

T f 1 Family % of Hired Labor' % of Total Labor‘ % of

Labor” (man- E (man-days/ha) E (man-days/ha) E
da slha .
Land Preparation 16.0 3.9 89.5 22.0 105.5 26.0
Planting 11.2 2.8 63.4 15.6 74.6 18.4
App. Fertilizer 0.0 0.0 5.4 1.3 5.4 1.3
App. Herbicide 5.4 1.3 8.5 2.1 13.9 3.4
App. Insecticide 3.3 0.8 8.2 2.0 11.5 2.8
App. Fungicide 1.1 0.3 0.0 0.0 1.1 0.3
Manual Weeding 0.7 0.2 33.1 8.1 33.8 8.3
Harvesting 18.8 4.6 96.7 23.8 115.5 28.4
Threshing 5.2 1.3 40.0 9.8 45.2 11.1
0111ch 0.0 0.0 0.0 0.0 0.0 0.0
Total Labor Man-days 61.7 15.2 344.8 84.8 406.5 100.0

 

 

 

 

a/ It represents the sum of labor man-days/ha by labor type used by all farmers in the sample for each operation, which is used to
compute the percentage of the total labor man-days/ha by type of labor and operation.
blReta’esentstlwpercentofthetotallaborman-days, usedbythe fannersinthesample,bytypeoflabortocanyouttheeach

 

operations in bean production.
% ofTL = (Family or hired Labor man-days per hectare / Total sum ofLabor man-days per hectare)‘100.
cl Is the sum of family and hired labor man-days/ha.

Labpr Costs30 by Type of Operations: Average total labor costs for the traditional farmers
averaged US$84.2/ha, compared to US$101 . 1/ha for modern farmers (Table 4.4.1.1).

For traditional farmers, the largest share of total labor cost per hectare was for land
preparation (34.7%), followed by planting (26.7%), harvesting (19.1%), threshing (8.8%),
agrochemical applications (4.7%), manual weeding (4.2%), and a combination of other activities
such as cleaning, watering and winnowing (1.9%) (Table 4.4.1.4).

For modern farmers, the largest share of total labor cost was for harvesting (26.7%),
followed by land preparation (25.2%), planting (18.4%), threshing (13.2%), manual weeding
(8.4%), and agrochemical applications (8.1%) (Table 4.4.1.5).

For traditional farmers, hired labor cost accounted for 62.6% of average total labor cost

per hectare, compared to 85.2% for modern farmers.

 

3° Family Labor is valued at the wage rate (i.e. US$2.63/day) for postrera I999.

66

Table 4.4.1.4 Sum and Percentage of Traditional Farmers (N = 9) Family, Hired and Total Labor
Cost (U S$/ha) by Operation, Postrera 1999, Olancho.

 

 

 

gm of Omtipn Family Labor’ % f Hired Labor‘ % of Totgl LaMr‘ ,'_/o_qu

(USS/hp) TLé (USS/ha) TLC—2 (USS/hp) E
Land Preparation 149.9 4 19.8 113.5 15.0 263.4 34.7
Planting 49.8 6.6 152.5 20.1 202.4 26.7
App. Fertilizer 0.0 0.0 0.0 0.0 0.0 0.0
App. Herbicide 18.6 2.5 8.3 1.1 27.0 3.6
App. Insecticide 8.5 1.1 0.0 0.0 8.5 1.1
App. Fungicide 0.0 0.0 0.0 0.0 0.0 0.0
Manual Weeding 4.2 0.6 27.5 3.6 31.7 4.2
Harvesting 24.6 3.2 119.8 15.8 144.5 19.1
Threshing 13.8 1.8 52.6 6.9 66.5 8.8
Others 14.1 1.9 0.0 0.0 14.1 1.9
Total Labor Cost 283.6 37.4 474.3 62.6 757.9 100.0

 

 

 

 

a/Itrepresentsthesumoflaborcost/babylabortypeusedbyallfumersinthesarnpleforeachopaafiomwhichisusedto
eomputethepercentage ofthetotallaborcost/habytypeoflaborandoperation.
b/Representsthepu'centageofthetotallaborcost/ha,usedbythefannersinthesample,bytypeoflabortocanyouttheeach
operations in bean production.
%ofTLC=(FamilyorhiredI.aborcostperhectare/Totalsumofall Laborcostperhectare)‘100.
c/Isthesumoffamilyandhiredlaborcostperhectare.

Table 4.4.1.5 Sum and Percentage of Modern Farmers (N = 11) Family, Hired and Total Labor
Cost (U S$/ha) by Operation, Postrera 1999, Olancho.

 

 

 

1pr of Oggtion Family Labor' % of Hired Labor' % of Total ppm! M

m§$lha1 TTE' ass/ha) TLE (pss/bg) 1y;
Land Preparation 42.0 3.8 233.7 21.3 275.7 25.2
Planting 29.5 2.7 171.8 15.7 201.3 ' 18.4
App. Fertilizer 0.0 0.0 14.7 1.3 14.7 . 1.3
App. Herbicide 14.2 1.3 25.8 2.4 40.0 3.7
App. Insecticide 8.6 0.8 22.6 2.1 31.1 2.8
App. Fungicide 2.8 0.3 0.0 0.0 2.8 0.3
Manual Weeding 1.9 0.2 90.6 8.3 92.5 8.4
Harvesting 49.4 4.5 243.0 22.2 292.4 26.7
Threshing 13.7 1.2 131.3 12.0 145.0 13.2
Others 0.0 0.0 0.0 0.0 0.0 0.0
Total Lab;or Cost 162.1 14.8 933.4 85.2 1095.5 100.0

 

 

 

 

 

a/Itrepresentsthesumoflaborcost/habylabortypeusedbyall farmersinthe sample foreach operation, which isusedto
compute the percentage of the total labor cost/ha by type of labor and operation.
b/Representsthepercentageofthc total laborcost/ha,usedbythe fannersinthesample,bytypeoflabortocanyouttheeach
operations in bean production.
%ofTLC =(FamilyorhiredLaborcostperhectare/Total smnofall Laborcostperhectare)‘100.
c/Isthesmnoffamilyandhiredlaborcostperhectarebyoperation

4.4.2 Patterns and Costs of Input Use

5m; Farmers in the sample most commonly used seed saved from previous harvest.

From the sample of 20 farmers, nine farmers planted traditional varieties and 11 farmers planted

67

 

modern varieties. The average seed rate for traditional farmers was 46.7kg/ha at an average cost
of US$27.5/ha, while the modern farmers seed rate was 51.4kg/ha at an average cost of
US$28.5/ha (Table 4.4.2.1). Traditional farmers planted Chimino and Rojo, while the modern
farmers planted TC- 75 and Dorado.

Fmilizg; None of the traditional farmers in the sample used fertilizer, while one modern
farmer did. The modern farmer used 0.8kg/ha of F oliar Fertilizer at a cost of US$5.5/ha (Table
4.4.2.1).

Hgmicide; Twelve farmers in the sample used herbicide, out of which five were
traditional farmers and seven were modern farmers. Traditional farmers used an average of 1.7
liters/ha at an average cost of US$13.7/ha, while the modern farmers used 1.4 liters/ha at an '
average cost of US$10. l/ha (Table 4.4.2.1). Most of the farmers applied Paraquat, while few
applied Fluziflop.

Inggticide: Eight farmers in the sample used insecticide, out of which three were
traditional farmers and five were modern farmers. Traditional farmers used an average of 0.6
liters/ha at an average cost of US$4.8/ha, while the modern farmers used an average of 0.8
liters/ha at an average cost of US$5.8/ha (Table 4.4.2.1). Almost all the farmers who applied
insecticide used Methyl Parathion, while one of them used Methamidifos.

Fpngicide: None of the traditional farmers used firngicide, while one modern farmer used
1.4g/ha at a cost ofUS$l4.7/ha (Table 4.4.2.1).

Tractipn Qpntract: Nineteen farmers in the sample used animal traction for primary land
tillage, out of which eight were traditional farmers and eleven were modern farmers. Traditional

farmers used animal traction equal to 4.8 days/ha at an average cost of US$36.2/ha, while the

68

modern farmers used animal traction equal to 5.1 days/ha at an average cost of US$36. l/ha

(Table 4.4.2.1).

Table 4.4.2.1. Average Quantity and Cost of Input Use Per Hectare by Type of Farmer, Postrera 1999,
Olancho, Honduras.

 

 

 

 

 

 

 

 

Item Traditional (N=9) Modern (N=1 1 ) Total =20 -
n' Qtty Cost n' Qny.b Cost 11‘ Qtty." Cost
(U S$lha) (U SS/ha) (USS/ha)
Seed (Kg/ha) 9 46.7 27.5 11 51.4 28.5 20 49.4 27.7:
Fertilizer (Kg/ha) . 0 NA - NA 1 0.8 5.5 1 0.8 _ 5.5
Herbicide (Illa) 5 1.7 13.7 7 1.4 10.1 12 1.5 11.6
Insecticide (Illa) 3 0.6 4.8 5 0.8 5.8 8 0.7 5.5
Fungicide (g/ha) ' 0 NA NA 1 1.4 14.7 1 1.4 14.7
Traction Contract°
(days/ha) 8 4.8 36.3 11 5.1 36.1 19 5.0 36.2
al Number farmers under each category using the particular item.
bl Mean quantity

c/Costpa' hectare of oxen hired/used for land preparation.

4.4.3 Profitability Analysis

Various measures of costs and returns are reported in the Table 4.4.3.] and presented
below.

Revenue:

Yield, Price and Gross Income (G1): On average, traditional farmers obtained a yield of
361 .4kglha (SD. = 153) and the modern farmers obtained 641.7kglha (SD. = 306). Traditional
farmers received an average price of US$0.52/kg, while the modern farmers received
US$0.51/kg. GI for traditional farmers averaged US$187.9/ha, while it averaged US$327 .3/ha
for. modern farmers.

Costs:

Tptfl Entegprise Cost (11:39): For traditional farmers, TEC averaged US$176.0/ha, which
consist of hired labor cost (29.9%), input cost (22.7%), animal traction cost (20.6%), opportunity

cost of family labor (17.9%), and the opportunity cost of equity capital (8.8%) (Table 4.4.3.2).

69

Operating cost, excluding opportunity cost of equity capital and family labor, was US$128.99/ha
(Table 4.4.3.1).

- For modern farmers, TEC was US$193.7/ha, which consists of hired labor cost (43.8%),
input cost (19.4%), animal traction cost (18.7%), opportunity cost of equity capital (9.8%), and
opportunity cost of family labor (8.4%) (Table 4.4.3.2). Operating cost, excluding the .
opportunity cost of equity capital and family labor, was US$158.5/ha (Table 4.4.3.1).

Per unit Cost pf Prpduction (i. e. total enterprise cost divided by the average yield) for
traditional farmers was US$0.49/ha compared to US$0.30/ha for modern farmers.
Returns:

Entegprisg floss Margin (EGM) (i. e. GI less operating cost) for traditional farmers
averaged US$58.9/ha, while it averaged US$168.8/ha for modern farmers.

Return 19 Family Lang, Labor and Management (ELLM) (i. e. EGM less the opportunity

coSt of equity capital) for traditional farmers’ averaged US$43.4/ha, compared to US$149.8/ha

for modern farmers.

Rgprn to Family Land, labor and Management per Day (1'. e. RFLLM divided by the-

number of family labor days) for traditional farmers’ averaged US$3.6/day, while the modern

farmers’ averaged US$24.2/day.

Return t9 Family Lang and Management (i.e. TEC deducted from GI) for traditional
farmers was US$11.9/ha, while it was US$133.6/ha for the modern farmers (Table 4.4.3.1).

7O

Table 4.4.3.1. Average Yields, Prices, Costs and Returns by Type of Farmers, Postrera 1999,

Olancho, Honduras.

 

 

 

 

 

 

 

 

 

 

Traditional Modern Sig. (t-
Items ' (N=9) (N=1l) test)‘
lRevenue:
Average Yield (Kg/ha) 361.4 641.7 0.02’
Adjusted Price (USS/Kg) 0.5 0.5 0.49
(1 ) Gross Income (USS/ha) 187.9 327.3 0.04‘
lCosts:
Input Cost“ (USS/ha) 40.0 37.5 0.70
Traction Contract Cost (US$lha) 36.3 36.1 0.99
Hired Labor Cost (USS/ha) 52.7 84.9 0.12‘“
(2) Total Operating Cost (USS/ha) 129.0 158.5
(3) Opportunity Cost of Equity Capital‘ (USS/ha) 15.5 ' 19.0
(4) Family Labor
(4. 1) Number of Family Labor Days/ha 12.0 6.2 0.30
(4.2) Family Labor Cost‘ (USS/ha) 31.5 16.2 0.30
(5) Total Enterprise Cost (USS/ha) [2+3+4. 2] 176.0 193.7
(6) Per Unit Cost“ (USS/kg) 0.5 0.3
[Profitability Measures
(7) Enterprise Gross Margin (USS/ha) [1-2] 58.9 168.8 0.07”
('8) Return to Family Land, Labor and Management (USS/ha) [7.3] 43.4 149.8
(9) Returns to Family Land, Labor and Management per Day
(USS/day) [8/4.1] 3.6 24.2
(10) Return to Family Land and Management (USS/ha) [84.2 or 1-
5] 11.9 133.6
al T-test for equality of means:
‘ Significant at 5% significance level.
" Significant at 10% significant level.
Bl Mean of the aggregated total cost of inputs (seeds, fertilizers, insecticides, fungicides and herbicides).
CI Opportunity cost of equity capital was valued at 12% of Operating Cost.
Dl Opportunity cost family labor was valued at the wage rate of US$2.63/Day.
1y Computed by dividing total enterprise cost by average yield.
Table 4.4.3.2. Average Total Enterprise Cost (US$lha), Postrera 1999, Olancho, Honduras.
Item Traditional (N=9) Modern (N=11) Total (N=20)
Cost % of Cost % of Cost % of
(USS/ha) TEC (U SS/ha) TEC (USS/ha) TEC
Input Cost‘ 40.0 22.7 37.5 19.4 ' 38.6 20.4
Traction Contract cost” 36.3 20.6 36.1 18.7 36.2 19.1
Family Labor cost 31.5 17.9 16.2 8.4 . 23.5 12.4
Hired Labor Cost 52.7 29.9 84.9 43.8 73.4 38.7
Equity Capital Cost 15.5 8.8 19.0 9.8 17.8 9.4
_T_otal Enterprise Cost (TEC) 176.0 100.0 193.7 100.0 189.4 100.0

 

 

 

 

 

 

al Total aggregate mean of the cost of inputs (seeds, fertilizers, insecticides, fungicides and herbicides).

Bl Cost per hectare of animal traction for land preparation.

71

4.4.4 Sensitivity Analysis”:

The results of the sensitivity analysis are reported for traditional (Table 4.4.4. 1) and
modern (Table 4.4.4.2) farmers with respect to a :1: 50 percent change in bean yield and bean
price,.holding operating cost32 constant.

For traditional farmers (Table 4.4.4.1), holding operating cost (US$129.0/ha) and one of
either yield (361.4kglha) or price (U S$0.52/kg) constant, EGM falls below zero with a 40%
decrease in price or yield. Holding operating cost constant, EGM falls below zero with a 20%
decrease in price and yield.

For modern farmers (Table 4.4.4.2), holding operating cost (US$158.5) and one of either
yield (641 .7kg/ha) or price (U S$0.5 I/kg) constant, EGM remained positive with a 50% decrease
in price or yield. Holding operating cost constant at US$ 158.5/ha, EGM would fall below zero

with a 20% decrease in yield and 40% decrease in price and vice versa.

 

3' Operating cost (input and hired labor cost) are held constant, assuming that yield changes are due to weather
related risk.

32 The operating costs'do not include the opportlulity cost of family labor and equity capital. Thus, the positive
scenario may change if we included these cost.

72

Table 4.4.4.1 Traditional Farmers: Sensitivity Analysis on Enterprise Gross Margin with Changing Bean Yield
and Price, Postrera 1999, Olancho, Honduras.

 

 

 

 

 

         

  

 

 

 

 

 

 

 

 

 

   
 

 

Bean Price (USS/Kg)

0.26 031 0.36 0.42 047 052 057 068 0.73 0.78

Yield (Kg/ha) % Change -50% 40% -30% 20% -10% 0% 10% 30% 40% 50%
180.69 50% .... 2.55 “.94
216.82 40% ........... 17. 58 28.86 40.13
252.96 30% ,,,,, 42.01 55.16 68.32
289.1 40°/gs: 51.41 66.44 81.47 96.5
325 23 -10°/ ............................. 73.96 90.87 107.78 124.69
361.34 0°/4 96.5 115.3 134.09 152.88
39751 . . . . 119.05 139.72 160.4181.07
433.64 28.86 51.41 73.96 96.5 119.05 141.6 164.15 186.7 209.25
469.78 42.01 66.44 90.87 115.3 139.72 164.15 188.58 213.01 237.44
505.92 55.16 81.47 107.78 134.09 160.4 186.7 213.01 239.32 265.63
542.06 50% 11.94 40.13 68.32 96.5 124.69 152.88 181.07 209.25 237.44 265.63 293.81

 

l
1

Table 4.4.4.2 Modern Farmers: Sensitivity Analysis on Enterprise Gross Margin with Changing Bean Yield and

 

Price, Postrera 1999J Olancho, Honduras.

 

 

 

 

 

 

 

      
  
 
  

       

 

       
  
 

   

 

 
 
   

Bean Price (USS/KgL
0.26 0.31 0.36 0.41 0.46 0.51 0.56 0.61 0.66 0.71 0.77
Yield (Kg/ha) %Chan_e -5014.“ 40% -307. -20% 4.0% 0% 10% 20% 30% 40% 50°/...
‘ 320.84 ~. " 4.. at» 5.15 21.51 37.87 54.24 70.6 86.96
385.01 -40°- gilw‘fif3357 18 24 37.87 57.51 77.14 96.78116.42136.05
449.18 -30°-s 24.78 47.69 70.6 93.51 116.42 139.32 162.23 185.14
513.34 -20°;. 50.96 77.14 103.33 129.51 155.69 181.87 208.05 234.23
577.51 .' _ 18.24 47.69 77.14 106.6136.05 165.5 194.96 2244125386 283.32
641.68 0° 5.15 37.87 70.6 103.33 136.05 168.78 201.5 234.23 266.95 299.68 332.41
705.85 10° 21.51 57.51 935112951 165.5 201.5 237.5 273.5 309.5 345.5 381.49
770.02 20° 37.87 77.14 116.42 155.69 194.96 234.23 273.5 312.77 352.04 391.31 430.58
834.18 30° 54.24 96.78 139.32 181.87 224.41 266.95 309.5 352.04 394.58 437.13 479.67
898.35 40° 70.6 116.42 162.23 208.05 253.86 299.68 345.5 391.31 437.13 482.94 528.76
962.52 50% 86.96 136.05 185.14 234.23 283.32 332.41 381.49 430.58 479.67 528.76 577.85

 

 

 

73

 

4.5 Qegartment: OlanchoI Honduras, Primera I 999.

The sample included 10 farmers, who planted traditional bean varieties and nine farmers,
who planted modern bean varieties. In the discussion that follows, farmers who planted
traditional varieties are referred to as traditional farmers and those who planted modern varieties

are referred to as modern farmers.

4.5.1 Patterns and Costs of Labor Use

Labor Lise by Type of Operation: On average, traditional farmers used a total of
34.6man-days/ha, compared to 46.8man-days/ha for modern farmers (Table 4.5.1.1).

In addition, Table 4.5.1.] reports the mean number of man-days and associated cost of
family and hired labor, by farming operation, for modern and traditional farmers. Because the
number of farmers who carried out each operation varied greatly, the mean reported is the mean
man-days (costs) for those farmers who actually carried out the respective operations. In this
regard, the sum of the means for family and hired labor man-days under each farming operation

(Table 4.5.1.1) do not represent the total average man-days for the respective operation.

74

 

 

 

 

Table 4.5.1.1. Labor Use (average man-days/ha), Primera, 1999, Olancho, Honduras.
Operation and Labor Traditional (N 1-10) Modern (N =9)
' Type No. of Days‘ gs; No. of Days' $1
11 Mean 5.1)." (flSS/ha)‘ a Mcag s__.r_)_" (ESQ/1131‘

Land Preparation:

Family 9 3.4 3.3 9.2 6 1.9 0.6 5.2

Hired 8 4.3 3.6 10.7 8 8.6 5.7 21.7
Planting

Family 9 1.7 1.6 4.5 4 1.6 .9 4.4

Hired 9 5.0 3.5 11.3 9 7.0 4.3 15.2
App. Fertilizer:

Family 0 NA NA NA 0 NA NA NA

Hired 0 NA NA NA 2 1.671 0.8 3.8
App. Herbicide:

Family 6 1.7 0.7 4.5 4 1.7 1.7 4.5

Hired 3 2.3 1.8 6.0 5 2.2 1.6 6.7
App. Insecticide:

Family 1 1.1 2.9 l 1.1 0 2.9

Hired 2 2.1 0 5.6 3 1.4 0.6 3.9
App. Fungicide:

Family 0 NA NA» NA 0 NA NA NA

Hired 0 NA NA: NA 0 NA NA NA
Manual Weeding:

Family 8 3.8 5.5 10.2 3 1.9 1.1 5.1

Hired 8 6.0 4.0 14.7 8 10.6 5.5 25.7
Harvesting:

Family 6 2.9 4.9 8.0 4 1.2 0.6 3.4

Hired 8 7.4 6.6 14.8 8 11.2 6.4 26.6
Threshing:

Family 4 0.9 0.4 2.5 4 1.2 0.6 3.4

Hired 8 3.3 2.5 10.2 9 4.4 3.2 16.2
Others:

Family 3 0.2 0.0-- 0.6 l 2.5 NA 6.7

Hired 0 NA NA' NA NA NA ' NA
Total Mean':

Family 9 12.1 14.5 32.6 7 6.3 4.3 17.0

Hired 10 22.5 19. I 52.3 9 40.5 15. 7 103.1

Total 34.6 84.9 46.8 120.0

 

 

 

 

 

 

Note: a/ converted from hours to number of days using 8 hours equal to one day.
Bl Standard Deviation of the number of days. -
C/ Family Labor is valued at its opportunity cost.
D/ Calculated as the weighted average.

For the traditional farmers, the largest share of total labor was used for manual weeding
(23.6%), followed by harvesting (23.1%), land preparation (19.6%), planting (17.9%), threshing

(9.0%), agrochemical applications (6. 7%), and a combination of other activities such as cleaning

and watering (0.2%) (Table 4.5.1.2).

7S

For modern farmers, the largest share of total labor was used for harvesting (23.2%),

followed by manual weeding (22.2%), land preparation (19.6%), planting (17.0%), threshing

(10.9%), agrochemical application (6.4%), and a combinations of other activities (0.6%) (Table

4.5.1.3).

With respect to their source of labor, traditional farmers’ total labor consisted of 32.7%

family labor and 67.3% hired labor, while modern farmers’ total labor consisted of 10.8% family

labor and 89.2% hired labor (Table 4.5.1.3).

Table 4.5.1.2 Sum and Percentage of Traditional Farmers (N = 10) Family, Hired and Total

Labor Use (man-days/ha) by Operation, Primera 1999, Olancho.

 

 

 

 

 

 

 

 

T 0 tion Family %of Hired Labor‘ % of To Labor‘ % of
Labor' (man— TIT (man-days/ha) TLT (man- ‘ W
d:- m Lara/.121

Land Preparation 30.8 9.2 34.7 10.4 65.5 19.6
Planting ‘ 15.0 4.5 44.7 13.4 59.7 17.9
App. Fertilizer 0.0 0.0 0.0 0.0 0.0 0.0
App. Herbicide 10.1 3.0 6.8 2.0 16.9 5.1
App. Insecticide 1.1 0.3 4.3 1.3 5.4 1.6
App. Fungicide 0.0 0.0 0.0 0.0 0.0 0.0
Manual Weeding 30.4 9.1 48.4 14.5 78.8 23.6
Harvesting 17.6 5.3 59.5 17.8 77.1 23.1
Threshing 3.8 1.1 26.3 7.9 30.1 9.0
Others 0.6 0.2 0.0 0.0 0.6 0.2
Total Labor Man-days 109.3 32.7 224.7 67.3 334.1 100.0

 

 

 

 

a/ It represents the sum of labor man-days/ha by labor type used by all farmers in the sample for each operation, which is used to

compute the percentage of the total labor man-days/ha by type of labor and operation.

Bl Represents the percent ofthe total labor man-days, used by the farmers in the sample, by type oflabor to carry out the each

operations in bean production.

% ofTL = (Family or hired Labor man-days per hectare l Total sum ofLabor man-days per hectare)‘100.

Cl Is the sum of family and hired labor man-days/l'la

76

 

Table 4.4.1.3 Sum and Percentage of Modern'Farmers (N = 9) Family, Hired and Total Labor
Use (man-days/ha) by ()jeration, Primera 1999, Olancho.

 

 

 

 

 

 

W Family % of Hired Labor‘ % of Total Lgbor‘ % of
_1_a_Labor' m n— E." 1__cl_i_aman- a 8m '11" W E"
» a slha

Land Preparation 11.6 2.8 68.5 16.8 80.1 19.6
Planting ‘ 6.6 1.6 62.9 15.4 69.5 17.0
App. Fertilizer 0.0 0.0 3.2 0.8 3.2 0.8
App. Herbicide 6.7 1.6 11.0 2.7 17.7 4.3
App. Insecticide 1.1 0.3 4.3 1.0 5.4 1.3
App. Fungicide 0.0 0.0 0.0 0.0 0.0 0.0
Manual Weeding 5.7 1.4 85.0 20.8 90.7 22.2
Harvesting 5.0 1.2 90.0 22.0 . 95.0 23.2
Threshing 5.0 1.2 39.7 9.7 . 44.7 10.9
Others 2.5 0.6 0.0 0.0 2.5 0.6
Total Labor Man-days 44.2 10.8 364.6 89.2 408.8 100.0

 

 

a/It represents the sum of labor man-days/ha by labor type used by all farmers in the sample for each operation, which is used to
compute the percentage of the total labor man-days/ha by type of labor and operation.

B/Representsthe percent ofthetotal laborman-days, usedbythe farmersinthe sample,by typeoflabo’rtocarryouttheeach
operations in bean production.

% of TL = (Family or hired Labor man-days per hectare I Total sum of Labor man-days per hectare)‘100.

Cl Is the sum of family and hired labor man-days/ha

Labor Costs33 by Type of Operations: Total labor costs for the traditional farmers
averaged US$84.9/ha, compared to US$120.0/ha for modern farmers (Table 4.5.1.1).

For traditional farmers, the largest share of total labor cost per hectare was for manual
weeding (24.4%), followed by land preparation (20.6%), harvesting (20.3%), planting (16.0%),
threshing (11.2%), agrochemical applications (7.2%), and a combination of other activities such
as cleaning, watering and winnowing (0.2%) (Table 4.5.1.4).

For modern farmers, the largest share of total labor cost was for harvesting (21.6%),
followed by manual weeding (21.2%), land preparation (19.6%), threshing (15.2%), planting
(14.8%), agrochemical applications (7.0%), and a combinations of other activities (0.6%) (Table
4.5.1.5).

For traditional farmers, hired labor cost accounted for 64.0% of average total labor cost

per hectare, compared to 88.7% for modern farmers.

 

33 Family Labor is valued at the wage rate (i.e. US$2.69/day) for primera 1999.

77

 

Table 4.5.1.4 Sum and Percentage of Traditional Farmers (N = 10) Family, Hired and Total
Labor Cost (U S$/ha) by Operation, Primera 1999, Olancho.

 

 

 

 

113' of Opgntion Family Labor' % of Hired Labor' % of Total La r‘ M

(fig/ha) (QSS/ha) TL? (LBS/hp) E
Land Preparation 82.7 10.1 85.9 10.5 168.5 20.6
Planting 40.2 4.9 90.5 11.1 130.7 16.0
App. Fertilizer 0.0 0.0 0.0 0.0 0.0 0.0
App. Herbicide 27.2 3.3 17.9 2.2 45.1 5.5
App. Insecticide 2.9 0.4 11.3 1.4 14.1 1.7
App. Fungicide 0.0 0.0 0.0 0.0 ' 0.0 0.0
Manual Weeding 81.6 10.0 117.7 14.4 199.2 24.4
Harvesting 47.4 5.8 118.6 14.5 165.9 20.3
Threshing 10.1 1.2 81.3 10.0 91.4 11.2
Others 1.7 0.2 0.0 0.0 1.7 0.2
Total Labor Cost 293.7 36.0 523.0 64.0 816.7 100.0

 

 

 

 

a/Itrewaentsthesmnoflaborcost/habylabortypeusedbyall farmersinthesample foreach operation, whichisusedto
computethepercentage ofthetotal laborcost/habytypeoflaborandoperation.
HlRepresentsthepercentageofthetotallaborcostlha,usedbythefarmasinthesample,bytypeoflabortocarryouttheeach
operationsinheanp'oduction.
%ofTLC =(Familyorhired1aborcostperhectare/Totalsmnofall Iaborcostperhectare)‘100.
ClIsthesumoffamilyandhiredlaborcostperhectare.

Table 4.5.1.5 Sum and Percentage of Modern Farmers (N =. 9) Family, Hired and Total Labor
Cost (U SS/ha) by Operation, Primera 1999, Olancho.

 

 

 

Tm or Ourafign Family Labor' °/. of Hired Lahor' % of Total -Lal_lt_)r‘ 10.9!

m TL mssm) TLE (pssmgl LLQ
LandPrepalation 31.1 3.0 173.8 16.6 204.9 ' 19.6
Planting 17.8 1.7 136.7 13.1 154.4 14.8
App. Fertilizer 0.0 0.0 7.7 0.7 7.7 0.7
App. Herbicide 17.9 1.7 33.6 3.2 51.5 4.9
App. Insecticide 2.9 0.3 11.8 1.1 14.6 1.4
App. Fungicide 0.0 0.0 0.0 0.0 0.0 0.0
Manual Weeding 15.4 1.5 206.0 19.7 221.4 21.2
Harvesting 13.5 1.3 212.6 20.3 226.1 21.6
Threshing 13.5 1.3 145.7 13.9 159.1 15.2
Others 6.7 0.6 0.0 0.0 6.7 0.6
Total Labor Cost 118.7 11.3 927.8 88.7 1046.5 100.0

 

 

 

 

 

a! It represents the sum of labor cost/ha by labor type used by all farmers in the sample for each operation, which is used to
compute the percentage of the total labor cost/ha by type of labor and operation.
B/Representsthepercentage ofthetotal laboreost/hausedbythefarmers inthesample, bytypeoflabortocarryouttheeach
operations in bean production.
%ofTLC = (FamilyorhiredlaborcostperhectarelTotal sum ofall Laborcostperhectare)‘100.
CI Is the sum of family and hired labor cost per hectare by operation.

4.5.2 Patterns and Costs of Input use

§_e_e_d_:_ Most of the farmers in the sample planted seed saved fi'om the previous harvest.

From the sample of 19 farmers, 10 farmers used traditional varieties and nine farmers used

78

 

modern varieties. Traditional farmers used an average seed rate of 41.8kg/ha at an average cost
of US$22.9/ha, while the modern farmers used an average seed rate of 53. lkglha at an average
cost of US$42.7/ha (Table 4.5.2.1). Traditional varieties grew were Chimino, Rojo and Olanchito
and the modern varieties grew were Dorado, T C- 75 and Danli.

Fmilizgr: None of the traditional farmers used fertilizers, while two modern farmers used
12-24-12. These modern farmers used an average quantity of 97.4kg/ha at an average cost of
US$19.9/ha (Table 4.5.2.1).

Herbicide: Thirteen farmers in the sample used herbicide, of which six were traditional
farmers and seven were modern farmers. Traditional farmers used an average of 2.2 liters/ha at
an average cost of US$12.8/ha, while the modern farmers used an average of 2.2 liters/ha at an
average cost of U88 1 5.4/ha (Table 4.5.2.1). Twelve farmers used Paraquar and one farmer used
Fluziflop.

Insecticide: Two traditional farmers and three modern farmers used insecticide.
Traditional farmers used an average of 0.9 liters/ha at an average cost of US$5.2/ha, while the
modern farmers used 0.7 liters/ha at an average cost of US$3.4/ha (Table 4.5.2.1). All these
farmers used Methyl Parathion.

Fpngigide: None of the farmers in the sample used fungicide.

Traction Qontract: Eighteen farmers in the sample used animal traction for primary
tillage”, of .which ten were traditional farmers and eight were modern farmers. Traditional
farmers used animal traction equal of 4.5 days/ha at an average cost of US$35.0/ha, while the
modern farmers used animal traction equal to 5.9 days/ha at an average cost of US$32.8/ha

(Table 4.5.2.1).

 

3‘ Ploughing and row making

79

Table 4.5.2.1. Average Quantity and Cost of Input Use Per Hectare by Type of Farmer, Primera 1999,
Olancho, Honduras.

 

 

 

 

 

 

 

 

1M Tragitjonal (N=10) Modern (N=9) Total =19
n' Qtty Cost n' Qtty. Cost n' Qtty. Cost
(U SS/ha) (U S$/ha) (U SS/ha)
Seed (Kg/ha) 10 41.8 22.9 8 53.1 42.7 18 46.5 31.7
Fertilizer (Kg/ha) 0 NA NA 2 97.4 19.9 2 97.4 19.9
Herbicide (Mn) 6 2.2 12.8 7 2.2 15.4 13 2.2 14.2
Insecticide (llha) 2 0.9 5.2 3 0.7 3.4 5 0.8 4.1
Fungicide (g/ha) 0 NA NA 0 NA NA 0 NA NA
Traction Contract"
(days/ha) 10 4.5 35.0 8 5.9 32.8 18 5.1 34.0
a/ Number farmers under each category using the particular item.
bl Metm quantity

c/Costperhectareof oxenhired/medforlandpreparation.

4.5.3 Profitability Analysis
Various measures of costs and returns are reported in the Table 4.5.3.] and presented
below.

Revenue:

Yigld, Price and floss Income (QI): On average, traditional farmers obtained a yield of
325.1kg/ha (SD. = 207) and the modern farmers obtained 707.4kg/ha (SD. = 440). Traditional

farmers received an average price of US$0.49/kg and the modern farmers received US$0.51/kg.
Traditional farmers earned a GI of US$159.3/ha, while the modern farmers earned US$360.8/ha.

Costs:

Total Entegprise Cost (:1 EC): For traditional farmers, TEC averaged US$161 .8/ha, which
consist of hired labor cost (32.3%), animal traction cost (21.7%), opportunity cost of family labor
(20.2%), input cost (17.3%), and the opportunity cost of equity capital (8.6%) (Table 4.5.3.2).
Operating cost, excluding opportunity cost of equity capital and family labor, was US$115.30/ha
(Table 4.5.3.1).

For modern farmers, TEC was US$231.2/ha, which consists of hired labor cost (44.6%),

input cost (24.0%), animal. traction cost (14.2%), opportunity cost of equity capital (9.9%), and

80

opportunity cost of family labor (7.3%) (Table 4.5.3.2). Operating cost, excluding opportunity
cost of equity capital and family labor, was US$191 .3/ha (Table 4.5.3.1).

Pgr pnit Cost of Production (i. e. total enterprise cost divided by the average yield) for
traditional farmers was US$0.50/ha compared to US$0.33/ha for modern farmers.

Returns:

Entggprisg Gross Margin (EGM) (i. e. GI less operating cost) for traditional farmers
averaged US$44.0/ha, compared to US$169.5/ha for modern farmers.

Ram 19 Fpmily Lgnd, Labor and Management (R_FLLM) (i. e. EGM less the opportunity

cost of equity capital) for traditional farmers’ averaged US$30.1/ha, while it averaged

US$146.5/ha for modern farmers.

Rgmm to Family Land, Labor and Management per Dgy (i. e. RFLLM divided by number

 

of family labor days) for traditional farmers’ averaged US$2.5/day, while it averaged
US$23.2/day for modern farmers.
Return tp Family Land and Management (i. e. TEC deducted from GI) for traditional

farmers averaged minus US$2.5/ha, while it averaged US$129.6/ha for the modern farmers.

81

Table 4.5.3.1 Average Yields, Prices, Costs and Returns by Type of Farmers, Primera 1999,

Olancho, Honduras.

 

 

 

 

 

 

Traditional Modern Sig. (t-
Items =10) (N=9) test)‘
evenue: .
Average Yield (Kg/ha) 325.1 707.4 0.04"
Adjusted Price (USS/Kg) 0.5 0.5 0.37
(1) Gross Income (USS/ha) 159.3 360.8 0.03“
osts:
Input Cost” (USS/ha) 28.0 55.5 0.028
Traction Contract Cost (USS/ha) 35.0 32.8 0.82
Hired Labor Cost (USS/ha) 52.3 103.1 0.04‘I
(2) Total Operating Cost (uss/ha) 115.3 ' 191.3
(3) Opportunity Cost of Equity Capitalc (USS/ha) 13.8 23.0
(4) Family Labor
(4.1) Number of Family Labor Days/ha 12.1 6.3 0.23
(4.2) Family Labor Cost‘I (USS/ha) 32.6 17.0 0.23
(5) Total Enterprise Cost (USS/ha) [2+3+4.2] 161.8 231.2
(6) Per Unit Cost‘ (USS/kg) 0.5 0.3
rofitability Measures
(7) Enterprise Gross Margin (USS/ha) [1-2] 44.0 169.5 0.09"
(8) Return to Family Land, Labor and Management (USS/ha) [7-
3] 30.1 146.5
(9) Returns to Family Land, Labor and Management per Day
(USS/day) [8/4.1] 2.5 23.2
(10) Return to Land and Management (USS/ha) [84.2 or 1-5] -2.5 1296

 

a! T-test for equality of means:
‘ Significant at 5% significance level.
” Significant at 10% significant level.

bl Mean of the aggregated total cost of inputs (seeds, fertilizers, insecticides, fimgicides and herbicides).

cl Opportunity cost ofequity capital was valued at 12% ofOperating Cost.
d/ Opportunity cost family labor was valued at the wage rate of US$2.69IDay.
e/ Computed by dividing total enterprise cost by average yield.

Table 4.5.3.2. Average Total Enterprise Cost (U S$/ha), Primera 1999, Olancho, Honduras.

 

 

 

 

 

 

Item Traditignal (N=10) Modern (N=9) Total =19

Cost % of Cost % of Cost % of

(USS/ha) TEC (USS/ha) TEC (USS/ha) TEC
Input Cost‘ 28.0 17.3 55.5 24.0 41.7 21.3
Traction Contract Costb 35.0 21.7 32.8 14.2 34.0 17.3
Family Labor cost 32.6 20.2 17.0 7.3 25.8 13.1
Hired Labor Cost 52.3 32.3 103.1 44.6 76.4 38.9
Equity Capital Cost 13.8 8.6 23.0 9.9 18.3 9.3
Total Enterprise Cost (TEC) 161.8 100.0 231.2 100.0 196.1 100.0

 

a/ Total aggregate mean of the cost of inputs (mds, fertilizers, insecticides, fungicides and herbicides);

b/ Cost per hectare of oxen hired/used for land preparation.

82

 

 

4.5.4 Sensitivity Analysis”:

The results of the sensitivity analysis are reported for traditional (Table 4.5.4.1) and
modern (Table 4.5.4.2) farmers with respect to a :t 50 percent change in bean price and yield,
holding operating cost36 constant.

For traditional farmers (Table 4.5.4.1), holding operating cost (U SS] 15.3/ha) and one of
either yield (325.1kg/ha) or price (US$0.49/kg) constant, EGM falls below zero with a 30°/o
decrease in price or yield. Holding operating cost constant, EGM falls below zero with a 10%
decrease in price and 20% decrease in yield and vice versa. 0
For modern farmers (Table 4.5.4.2), holding operating cost (U 83191.3) and one of either yield
(707.4kg/ha) or price (U 8305 1/kg) constant, EGM falls below zero with a 50% decrease in
price or yield. Holding operating cost constant at US$ 191.3/ha, EGM would fall below zero

with a 30% decrease in yield and price.

Table 4.5.4.1 Traditional Farmers: Sensitivity Analysis on Enterprise Gross Margin with Changing Bean
Yield and Price, Primera 1999, Olancho, Honduras.

 

Bean Price(US$/Kg)
I 0.25 0.29 0.34 0.39 0.44 0.49 0.54 0.59 0.64 0.69 0.74
-30% -20% -lO% 0% 10% 20% 50°/o

 

           
      
 

Yield (Kg/ha) % Change

 

 

 

-_ 4.5:. . . . .;.,.'._._. ......._..._._...:.;.:. .....................

    

   

 

 

162.53 -50°/ #5 ~55 822.8: 4.16
195.03 409 ;25::_ . 18.49 28.05
227.54 -30°/ «39 . 1 40.79 51.94
260.04 -200/ . 24.86 37.6 50.35 63.09 75.83
292.55 -10°/ . . 42.38 56.72 71.05 85.39 99.72
325.05 59.9 75.83 91.76 107.7 123.6
357.56 77.42 94.941125 130 147.5
390.06 5555555555555555 94.94 114.1 13321523 171.4
422.57 112.5 133.2 15391746 195.3
455.07 130 152.3 174.6 196.9 219.2
487.58 147.5 17141953 219.2 243.1

 

 

3’ Operating cost (input and hired labor cost) are held constant, assuming that yield changes are due to weather
related risk.

3‘ The operating costs do not include the opportunity cost of family labor and equity capital. Thus, the positive
scenario will change if we included these cost.

83

 

Table 4.5.4.2. Modern Farmers: Sensitivity Analysis on Enterprise Gross Margin with Changing Bean Yield
and Price, Primera 1999, Olancho, Honduras.

 

 

 

 

 

 

 

  

  
 

  
  
 
  

  

 

  

Bean Price (USS/Kg
0.26 0.31 0.36 0.41 0.46 0.51 0.56 0.61 0.66 0.71 0.77
Yield (Kg/ha) 9. Chan_ -50°/ _ -40° -3o° _ 2 10% 20% 30% 40% 50°/or
353-72 '50" 2H." = - 5 4.2453325 7.13 25.17 43.21 61.25 79.29
424.46 -40° “5} ‘2 “ 3.53 25.17 46.82 68.47 90.12 111.8 133.4
495.2 -30° 36 61.25 86.51 111.8 137 162.3 187.5
565.94 zog‘idaifi'i-T . 68.47 97.33 126.2 155.1 183.9 212.8 241.7
636.69 40°/iii??? 3.53 36 68.47 100.9 133.4 165.9 198.4 230.8 263.3 295.
707.43 2852‘? 25.17 61.25 97.33 133.4 169.5 205.6 241.7 277.7 313.8 349.9
778.17 10°/ 7.13 46.82 86.51 126.2 165.9 205.6 245.3 284.9 324.6 364.3 404
848.92 20°/ 25.17 68.47 111.8 155.1 198.4 241.7 284.9 328.2 371.5 414.8 458.1
919.66 30°/ 43.21 90.12 137 183.9 230.8 277.7 324.6 371.5 418.4 465.3 512.2
990.4 40°/ 61.25 111.8 162.3 212.8 263.3 313.8 364.3 414.8 465.3 515.9 566.4
1061.15 50°/ 79.29 133.4 187.5 241.7 295.8 349.9 404 458.1 512.2 566.4 620.5

 

 

4.6. Dgartment: El Paraiso, Honduras, Primera 1998.

The sample included 6 farmers, who planted traditional bean varieties and 14 farmers,

who planted modern bean varieties. In the discussion that follows, farmers who planted

traditional varieties are referred to as traditional farmers and those who planted modern varieties

are referred to as modern farmers.

4.6.1 Patterns and Costs of Labor Use

Labor Use by Type of Operation: On average, traditional farmers used a total of
79.7man-days/ha, compared to 104.8man-days/ha for modern farmers (Table 4.6.1.1).

In addition, Table 4.6.1.1 reports the mean number of man-days and associated cost of

family and hired labor, by farming operation, for modern and traditional farmers. Because the

number of farmers who carried out each operation varied greatly, the mean reported is the mean

man-days (costs) for those farmers who actually carried out the respective operations. In this

84

regard, the sum of the means for family and hired labor man-days under each farming operation

(Table 4.6.1.1) do not represent the total average man-days for the respective operation.

 

 

 

 

 

Table 4.6.1.1. Labor Use (avergge man-days/ha‘l, Pfimerrb 1998, El Paraiso, Honduras.
Operation and Labor Traditional (N '6) Modern (N =14)
Type N9, of Dayg' SEE No. of Days' 931-
‘ a Mm 8p." ass/bar a Man g): 1118mm:

Land Preparation:

Family 4 6.6 4.5 16.8 4 40.7 34.4 103.7

Hired l 7.6 17.0 2 15.0 3.0 33.4
Planting: 2

Family 6' 5.6 5.2 14.3 12 6.3 9.8 16.1

Hired 4 5.3 2.6 11.1 10 8.7 5.2 19.6
App. Fertilizer:

Family 2 2.5 0.5 6.4 5 7.6 9.1 19.4

Hired 2 3.1 0.3 6.3 6 2.2 1.3 4.6
App. Herbicide:

Family 2 1.2 0.3 3.0 0 NA NA NA

Hired l 1.1 32.5 3 3.2 1.5 6.6
App. Insecticide:

Family 3 1.1 0.0 2.9 7 6.2 8.2 15.8

Hired 0 NA NA NA 8 3.6 2.1 7.6
App. Fungicide:

Family 0 NA NA NA 1 0.9 1.2

Hired 0 NA NA NA 2 1.4 0.7 2.7
Manual Weeding:

Family 6 8.8 6.6 22.5 8 24.3 20.5 ' 62.0

Hired 3 27.9 11.6 60.1 10 30.7 18.2 65.2
Harvesting

Family ' 5 7.1 4.4 18.2 5 11.3 8.9 28.7

Hired 4 17.3 6.9 35.6 11 14.1 5.8 30.4
Threshing: -

Family 2 4.5 1.7 11.4 7 4.5 3.2 11.5

Hired 1 13.0 57.8 9 7.6 4.1 24.0
Others:

Family 3 2.2 1.5 5.7 4 4.5 4.7 11.5

Hired 0 NA NA NA 4 5.1 3.1 12.5
Total Mean”:

Family 6 29.2 10. 7 74.4 14 44.4 63.3 113.1

Hired 4 50.5 28. 0 121.8 12 60.3 30. 1 135.7

Total 79. 7 196.2 104. 8 248. 8

 

 

 

 

 

 

Note: a/ Converted from hours to number of days using 8 hours equal to one day.
bl Standard Deviation of the number of days.
c/ Family Labor is valued at its opportunity cost.
(1! Calculated as the weighted average.

85

For the traditional farmers, the largest share of total labor was used for manual weeding
(26.3%); followed by harvesting (27.8%), planting (14.5%), land preparation (9.0%), threshing
(5.8%), agrochemical applications (4.8%), and a combination of other activities such as cleaning
and watering (1.8%) (Table 4.6.1.2).

For modern farmers, the largest share of total labor was used for manual weeding

(37.3%), followed by harvesting (15.7%), land preparation (14.3%), planting (12.2%),

agrochemical application (10.2%), threshing (7.5%), and a combinations of other activities

(2.8%) (Table 4.6.1.3).

With respect to their source of labor, traditional farmers’ total labor consisted of 46.5%

family labor and 53.5% hired labor, while modern farmers’ total labor consisted of 46.2% family

labor and 53.8% hired labor.

Table 4.6.1.2 Sum and Percentage of Traditional Farmers (N = 6) Family, Hired and Total Labor
Use (man-days/ha) by @eration, Primera 1998, El Paraiso.

 

 

 

 

 

 

 

T of ration Family %of Hired Labor’ % of Total LaMr‘ % of
Labor' (man- E (man-days/ha) E (man- EL:
da slha da slha

Land Preparation 26.3 7.0 7.6 2.0 34.0 9.0
Planting 33.7 8.9 21.1 5.6 54.8 14.5
App. Fertilizer 5.0 1.3 6.1 1.6 11.2 3.0
App. Herbicide 2.4 0.6 1.1 0.3 3.5 0.9
App. Insecticide 3.4 0.9 0.0 0.0 3.4 0.9
App. Fungicide 0.0 0.0 0.0 0.0 . 0.0 0.0
Manual Weeding 53.1 14.1 83.8 22.2 136.8 36.3
Harvesting 35.7 9.5 69.2 18.3 104.9 27.8
Threshing 9.0 2.4 13.0 3.4 22.0 5.8
Others 6.7 1.8 0.0 0.0 6.7 1.8
Total Labor Man-dgys 175.3 46.5 201.9 53.5 377.2 100.0

 

 

 

a/ It represents the sum of labor man-days/ha by labor type uwd by all farmers in the sample for each operation, which is used to
compute the percentage of the total labor man-days/ha by type of labor and operation.
blRepresentsthepercentofthetotallaborman-days,usedbythe farmersinthesample,bytypeoflabortocarryouttheeach
operations in bean production.

% ofTL = (Family or hired Labor man-days per hectare / Total sum oflabor man-days per hectare)‘100.

c/Is the sum offarnily andhiredlaborman-days/ha

86

Table 4.6.1.3 Sum and Percentage of Modern Farmers (N = 14) Family, Hired and Total Labor
Use (man-days/ha) by Operation, Primera 1998, El Paraiso.

 

 

 

 

 

 

 

 

 

Tm of Ogration Family % ot' Hired Labor‘ % of Total Labor‘ % of
Labor’ (man- TL? (man-days/ha) E (manjayslhg) TLT
da slha

Land Preparation 162.9 12.1 30.1 2.2 193.0 14.3
Planting 75.9 5.6 88.6 6.6 164.6 12.2
App. Fertilizer 38.1 2.8 13.2 1.0 51.2 3.8
App. Herbicide 0.0 0.0 9.5 0.7 9.5 0.7
App. Insecticide 43.4 3.2 29.0 2.2 72.4 5.4
App. Fungicide 1.0 0.1 2.9 0.2 3.8 0.3
Manual Weeding 194.8 14.5 306.9 22.8 501.7 37.3
Harvesting 56.3 4.2 154.8 11.5 211.1 15.7
Threshing 31.6 2.3 68.8 5.1 100.5 7.5
Others 18.1 1.3 20.3 1.5 38.3 2.8
Total Labor Man-days 622.0 46.2 724.1 53.8 1346.1 100.0

 

 

a/ It represents the sum of labor man-days/ha by labor type used by all farmers in the sample for each operation, which is used to
compute the percentage of the total labor man-days/ha by type of labor and operation. '
blRepresentsthepercentofthetotal laborman-days,usedbythefmmersindtesarnplebytypeoflabortocanyouttheeach
operations in bean production.

% ofTL = (Family or hired Labor man-days per hectare / Total sum ofLabor man-days per hectare)‘100.

cl Is the sum of family and hired labor man-days/ha

Labor Costs37 by Typg of Operations: Total labor costs for the traditional farmers
averaged US$196.2/ha, compared to US$248.8/ha for modern farmers (Table 4.6.1.1).

For traditional farmers, the largest share of total labor cost/ha was for manual weeding
(33.8%), followed by harvesting (25.0%), planting (13.9%), land preparation (9.0%), threshing
(8.6%), agrochemical applications (7.7%), and a combination of other activities such as cleaning,
watering and winnowing (1.8%) (Table 4.6.1.4). .

For modern farmers, the largest share of total labor cost/ha was for manual weeding
(35.8%), followed by land preparation (15.0%), harvesting (14.9%), agrochemical applications
(10.0%), threshing (9.2%), and a combination of other activities (2.9%) (Table 4.6.1.5).

For traditional farmers, hired labor cost accounted for 52.2% of the average total labor

cost per hectare, compared to 50.7% for modern farmers.

 

37 Family Labor is valued at the wage rate (i.e. US$2.55/day) for primera 1998.

87

Table 4.6.1.4 Sum and Percentage of Traditional Farmers (N = 6) Family, Hired and Total Labor
Cost (U SS/ha) by O eration, Primera 1999, El Paraiso.

 

 

 

 

Mun—00.! W %or W %or M %
0185M E cam TTC' amn E
Land Preparation 67.1 7.2 17.0 1.8 84.0 9.0
Planting 85.8 9.2 44.4 4.8 130.2 13.9
App. Fertilizer 12.8 1.4 12.5 1.3 25.3 2.7
App. Herbicide 6.1 0.7 32.5 3.5 38.6 4.1
App. Insecticide 8.7 0.9 0.0 0.0 8.7 0.9
App. Fungicide . 0.0 0.0 0.0 0.0 0.0 0.0
Manual Weeding 135.2 14.5 180.5 19.3 315.7 33.8
Harvesting 90.9 9.7 142.4 15.3 233.3 25.0
Threshing 22.9 2.4 57.8 6.2 80.7 8.6
Others 17.0 1.8 0.0 0.0 17.0 1.8
Total Labor Cost 446.4 47.8 487.1 52.2 933.5 100.0

 

 

 

 

 

alltrepeaentsthesmnoflaborcostlhabylabortypeusedbyallfumasinthemmpleforeachopaadomwhichisusedto
computetbepercentageofthetotallaborcostlhabytypeoflaborandoperation.
blRep’eaentstheper-centageofthetotallaborcostlhausedbythefarmersinthesample,bytypeoflabortocarryouttheeach
operationsinheanproduction.
%ofTLC=(Familyorhired1aborcostperhectare/TotalsumofallLaborcostperhectme)‘100.
cllsthesmnoffamilyandhiredlaborcostperhectare.

Table 4.6.1.5 Sum and Percentage of Modern Farmers (N- — 14) Family, Hired and Total Labor
Cost (U SS/ha) by Operation, Primera 1998,E1Paraiso.

 

 

 

 

312; of Opggtio Fgmily Labor' % of Hired Labor' % of Tptal Labor‘ M

cuss/ha) fuss/ha) TTC‘ mssma) 1E
LandPreparation 414.9 12.9 66.8 2.1 481.7 15.0
Planting 193.4 6.0 196.2 6.1 389.6 12.1
App. Fertilizer 96.9 3.0 27.7 0.9 124.6 3.9
App. Herbicide 0.0 0.0 19.8 0.6 19.8 0.6
App. Insecticide 110.4 3.4 61.2 1.9 171.6 5.3
App. Fungicide 2.4 0.1 5.3 0.2 7.7 0.2
Manual Weeding 496.1 15.4 652.4 20.3 1148.5 35.8
Harvesting 143.4 4.5 334.1 10.4 477.5 14.9
Threshing 80.5 2.5 216.2 6.7 296.7 9.2
Others 46.0 1.4 48.2 1.5 94.2 2.9
Total Labor Cost 1584.0 49.3 1627.9 50.7 3211.9 100.0

 

 

 

 

 

alltrepresentsthesmnoflaborcostlhabylabortype usedbyall farmersinthesample foreach operation, which isusedto
compute the percentage of the total labor cost/ha by type of labor and operation.
bl Represents the percentage of the total labor cost/ha, used by the farrners in the sample, by type of labor to carry out the each
operations in bean production.
%ofTLC=(Farnilyorhiredlaborcostperhectare/Totalsmnofalllaborcostperlwctare)‘lOO. ,
cllsthesumoffamilyandhiredlaborcostperhectarebyoperation

4.6.2 Patterns and Costs of Input Use

5m; All the farmers in the sample planted seed saved from previous harvest. From the

sample of twenty farmers, six farmers planted traditional varieties and 14 farmers planted

modern varieties. The average seed rate for traditional farmers was 70.7kg/ha at an average cost

88

of US$59.6/ha, while the seed rate for modern farmers was 51.3kg/ha at an average cost of
US$40.8/ha (Table 4.6.2.1). Traditional varieties planted were Paraisito, Cuarent, Seda, and
Chile, and the modern varieties planted were Dorado, Dicta 113, Dicta 122 and T C— 75 .

Fertilizer: Eighteen farmers in the sample applied fertilizer, out of which six were
traditional farmers and 12 were modern farmers. Traditional farmers applied an average of
121.7kglha at an average cost of US$37.0/ha, while the modern farmers applied an average of
13.0.4kg/ha at an average cost of US$42.2/ha. The majority of the farmers used 12-24-12, and,
F oliar Fertilizer.

Hmicide: Seven farmer in the sample used herbicide, out of which three were traditional
farmers and four were modern farmers. Traditional farmers used an average of 1.2 liters/ha at an
average cost of US$6.6/ha, while the modern farmers used an average of 1.9 liters/ha at an
average cost of US$22. llha (Table 4.6.2.1). The majority of the farmers used Paraquat and a
few used F luziflop.

Insecticide: Seventeen farmers used insecticide, out of which five were traditional
farmers and 12 were modern farmers. Traditional farmers applied an average of 0.8 liters/ha at
an average cost of US$7.8/ha, while the modern farmers applied 1.7 liters/ha at an average cost
of US$18.9/ha (Table 4.6.2.1). The types of insecticide used were Methyl Parathion,
Methamidafos, and Endosulfan. I

Fpngicige: None of the traditional farmers used fungicide, while six modern farmers
applied an average of 2.6g/ha at an average cost of US$14.5/ha (Table 4.6.2.1). The type of
fungicide used was Mancozeb.

Tregien Contract: Seventeen farmers in the sample used either a tractor or animal

traction for primary land tillage, out of which six were traditional farmers and 11 were modem

89

farmers. Traditional farmer used animal traction equal to 6.2 man-days/ha at an average cost of
US$51.7/ha, while the modern farmers used tractor/animal traction for 2.3 days/ha at an average
cost of US$89.6/ha (Table 4.6.2.1). The difl‘erence in the days and cost between modern and the
traditional farmers was because the six of the farmers who used tractors were all modern farmers.

Thus, their average for days was relatively low while the cost was higher.

Table 4.6.2.1. Average Quantity and Cost of Input Use Per Hectare by Type of Farrner,‘Primera 1998, El
Paraiso, Honduras.

 

 

 

 

 

 

 

 

Leg Tgeg'tienal (N=6) Modern (N=14) To =20
n' Qtty" Cost 11‘ Qtty.” Cost n' Qtty.b Cost
(U SS/ha) (U S$/ha) (U SSlhaL
Seed (Kg/ha) 6 70.7 59.6 14 51.3 40.8 20 57.1 46.4
Fertilizer (Kg/ha) 6 121.7 37.0 12 130.4 42.2 18 127.5 40.5
Herbicide (liter) 3 1.2 6.6 4 ' 1.9 22.1 7 . 1.6 15.5
Insecticide (l/ha) 5 0.8 7.8 12 1.7 18.9 17 1.4 15.7
Fungicide (g/ha) 0 NA NA 6 2.6 14.5 6 2.6 ' 14.5
Traction Contract‘ .
(days/ha) 6 ’ 6.2 51.7 11 2.3 89.6 17 3.6 76.2
al Number farmers under each category using the particular item.
b/ Mean quantity

cl Cost per hectare of tractor and oxen hired/used for land preparation.

4.6.3 Profitability Analysis

Various measures of costs and returns are reported in the Table 4.6.3.] and presented
below.

Revenue:

Yield, Price and Gross Income (GI): On average, traditional farmers obtained 955.7kg/ha
(S.D.= 590) and the modern farmers obtained 1,265.4kg/ha (SD. = 695). Traditional farmers
received an average price of US$0. 1 8/kg, while the modern farmers received an average price of
US$0.11/ha. GI for traditional farmers averaged US$172.0lha, while it averaged US$139.2/ha

for modern farmers.

90

Costs:

Total Entegprise Cost (:1 EC): For traditional farmers, TEC averaged US$3 87 .5/ha, which
consists of hired labor cost (31.4%), input cost (27.4%), opportunity cost of family labor
(19.2%), traction contract cost (13.3%), and the opportunity cost of equity capital (8.7%)
(Table4.6.3.2). Operating cost, excluding opportunity cost of equity capital and family labor, was
US$279.5/ha (Table 4.6.3.1).

For modern farmers, TEC averaged US$488.3/ha, which consists of hired labor cost
(27.8%), opportunity cost of family labor (23.2%), input cost (22.5%), traction contract cost
(18.4%), and opportunity cost of equity capital (8.2%) (Table 4.6.3.2). Operating cost, excluding
the opportunity cost of equity capital and family labor, averaged US$334.9/ha (Table 4.6.3.1).

Per pnit Cost of Production (i. e. total enterprise cost divided by the average yield) for
traditional farmers was US$04 l/ha compared to US$0.39/ha for modern farmers.

Returns:

Enterprise floss Margin (EGM1EGM (i. e. GI less operating cost) for traditional farmers
averaged minus US$107.5/ha, while it averaged minus US$195.7/ha for modern farmers.

Remm to Family Land, Labor and Management (fljLLM) (i. e. EGM less the opportunity
cost of equity capital) for traditional farmers averaged minus US$141 .0/ha, while it averaged

minus US$235.9/ha for modern farmers.

Realms 19 Family Land, Labor and Management per [M (i. e. RFLLM divided by the

 

number of family labor days) for traditional farmers averaged minus US$4.8/day, while that of

modern farmers averaged minus US$5.3/day.

91

Rmrn to Family Land and Management (1'. e. TEC deducted from GI) for traditional

farmers averaged minus US$215.4/ha, while it averaged minus US$349.1/ha for the modern

farmers.

Table 4.6.3.1 Average Yields, Prices, Costs and Returns by Type of Farmers, Primera

 

 

1998, El Paraiso, Honduras.
Traditional Modern Sig. (t-
Items (N=6) =14) test)‘
Revenue:
Average Yield (Kg/ha) 955.7 1265.4 0.34
Adjusted Price (USS/Kg) 0.2 0.1 0.21
(1) Gross Income (US$lha) 172.0 139.2 0.54
Costs:
Input cost” (US$lha) 106.1 109.7 0.88
Traction Contract Cost (US$lha) 51.7 89.6 0.14
Hired Labor Cost (USS/ha) 121.8 135.7 0.44
(2) Total Operating Cost (US$lha) 279.5 ’ 334.9
(3) Opportunity Cost of Equity Capitalc (US$lha) 33.5 40.2
(4) Family Labor
(4.1) Number of Family Labor Days/ha 29.2 44.4 0.39
(4.2) Family Labor Cost‘ (US$lha) 74.4 113.1 0.39
(5) Total Enterprise Cost (US$lha) [2+3+4. 2] 387.5 488.3
(6) Per Unit Coste (USS/kg) 0.4 0.4
Profitability Measures
(7) Enterprise Gross Margin (US$lha) [1-2] -107.5 -l95.7 0.46
(8) Return to Family Land, Labor and Management (US$lha) _
[7-3] -l41.0 -235.9
(9) Returns to Family Land, Labor and Management per Day
(USS/day) [8/4.1] -4.8 -5.3
(10) Return to Land and Management (USS/ha) [84.2 or 1-5] -215.4 -349.1

 

 

 

 

 

 

al T-test for equality of means:
‘ Significant at 5% significance level.
" Significant at 10% significant level.

bl Mean of the aggregated total cost of inputs (seeds, fertilizers, insecticides, fungicides and herbicides).

cl Opportunity cost of equity capital was valued at 12% of Operating Cost.
11! Opportrmity cost family labor was valued at the wage rate of US$2.55/Day.
e/ Computed by dividing total enterprise cost by average yield.

92

Table 4.6.3.1. Average Total Enterprise Cost (U S$/ha), Primera 1998, El Paraiso, Honduras.

 

 

 

 

 

Item Traditional (N=6) Modern (N=14) Total =20

Cost % of Cost % of Cost % of

- (US$lha) TEC (US$lha) TEC (USS/ha) TEC
Input Cost' 106.1 27.4 109.7 22.5 108.5 23.8
Traction Contract Cost” 51.7 13.3 89.6 18.4 76.2 16.7
Family Labor Cost 74.4 19.2 113.1 23.2 101.5 22.2
Hired Labor Cost 121.8 31.4 135.7 27.8 132.2 29.0
Equity Capital Cost 33.5 8.7 40.2 8.2 38.0 8.3
Total Enterprise Cost (TEC) 387.5 100.0 488.3 100.0 456.5 100.0

 

 

a/ Total aggregate mean of the com of inputs (seeds, fertilizers, insecticides, fungicides and herbicides)
b/Costperhectare of tractorandoxenhiredlused forlandpreparation.

4.6.4 Sensitivity Analysis”:

The results of the sensitivity analysis are reported for traditional (Table 4.6.4.1) and

modern (Table 4.6.4.2) farmers with respect to a i 50 percent change of bean price and yield,

holding operating cost” constant.

For traditional farmers (Table 4.6.4.1), holding operating cost (U S$279.5/ha) and one of

either yield (955.7kg/ha) or price (U 850. 1 8/kg) constant, EGM remained minus with a 50%

increase in price or yields. Holding operating cost constant, EGM became positive at 30%

increase in price and yield.

1 For modern farmers (Table 4.6.4.2), EGM remained negative, even if the price and the

yield increased by 50°/o.

 

3' Operating cost (input and hired labor cost) are held constant, assuming that yield changes are due to weather

related risk.

39 The operating costs do not include the opportrulity cost of family labor and equity capital. Thus, the scenario will

worse if we included these cost.

93

 

Table 4.6.4.] Traditional Farmers: Sensitivi

ty Analysis on Enterp

rise Gross Margin with Changing Bean Yield

 

 

 

 

 

 

 

and Price, Primera 1998, El Paraiso, Honduras.
Bean Price (USSACgL .
0.09 0.11 0.13 0.14 0.16 0.18 0.2 0.22 0.23 0.25 0.27
Yield (jg/y) % Chan e -50°/. 40% 30% -20°/. -10°/. 0% 10% 2015/0 30% 40% 50°/
477.87 5052/ - . . - .4 2
573. -40°/
669.01 -30°/
764.5 -20°/
860.16 4051/
955.73 0°/
1051.3 10°/ 2
1146.9 20°/ 9.5 30.15
1242.5 3041/ 11.22 33.59 55.95
133 40°/ 9.5 33.59 57.67 81.76
1433. 50% 4.34 30.15 55.95 81.76 107.56

 

 

Table 4.6.4.2 Modem Farmers: Sensitivity Analysis on Ente

Price, Primera 1998, El Paraiso, Honduras.

 

rprise Gross Margin with Changing Bean Yield and

 

 

 

 

 

 

 

 

94

Bean Price(US$lL(gL
0.06 0.07 0.08 0.09 0.1 0.11 0.12 0.13 0.14 0.15 0.1

Yield Ma) % Chan e -50% 40% -30% -20% 40% 0% 10% 20% 30% 40% 50°/

632.72 -50°/, jg, . -_ 2‘- .

759.2 -40°/ ‘

885.81 -30°/ . . . ,

1012.34 -20°/ -- '

1138.89' 405/ ...-,2. - ,. 2 .3-

1265.43 0°/ _.', ”V 5, _‘

1391.97 1W. 2.2.2 2 ,2

1518.52 20°/= : iii” 1““ '.

1645.06 30°/ F 511;. " 22,3525 22‘3"

1771.6 40°/ N“ , “‘2.

1898.15 50°/ 5. ...-2.. “ 2‘: a5

 

 

4.7 Summary of Empirical Results

4.7.1 Yield and Prices

The yields for modern farmers were higher than that of traditional farmers for all the
data sets (Appendix 2). The mean yield difference between traditional and modern
farmers ranged from 55.2kg/ha (Yoro, primera 2000) to 382.4kg/ha (Olancho,
Primera 1999).

Among the traditional and modern farmers of the three sites (Yoro, Olancho and El
Paraiso), modern farmers of El Paraiso (1,265kg/ha in Primera 1998) had the
highest average yield, while the traditional farmers of Yoro (249kg/ha in Primera
2000) had the lowest yield (Appendix 2).

Traditional farmers received higher prices for the beans sold than modern farmers did
during primera 1998 (El Paraiso) and postrera 1999 (Olancho). The modern farmers
received higher prices than traditional farmers during primera 1999 (El Paraiso),

postrera 2000 (Yoro), and primera 2000 (Yoro).

4.7.2 Cost of Production:

The Per unit Cost (U S$/kg) of bean production was higher for traditional farmers than
for modern farmers across all data sets (Appendix 3). This is due to the lower yield
that traditional farmers obtained, compared to the modern farmers yields.

Cost of labor (hired and family labor) constituted the highest share of total enterprise

cost/ha across all data sets (Appendix 4).

95

4.7.3 Lebor flee end Qest:

0 Average total number of man-days/ha (average for traditional and modem farmers)
for bean production ranged from 34.6man-days/ha (Traditional farmers during
Postrera 1999, Olancho) to lOSman-days/ha (Modern farmers during Primera 1998,
El Paraiso). The number of days used were higher in the hilly areas than those in the
plains.

o Across all data sets, modern farmers used more labor days than the traditional

' farmers, except during primera 2000 (Yoro), where the traditional farmers used more
labor days than the modern farmers did.
0 In general, both traditional and modern farmers used more hired labor than family
. labor, except for the traditional farmers of Yoro (Primera and Postrera 2000), where
they used more family labor than hired labor.

9 When family labor was valued at its opportunity cost, cost of labor represented
greater than 50% of the total enterprise cost for both traditional and modern farmers
across all data sets, except for traditional farmers (47.8%) in Olancho (Postrera
1999)

o The share of total labor used for each .operation varied greatly across data sets. For
example, in data sets where yields were highest, harvest labor accounted for a larger

share of labor, compared to other activities.

96

4.7.4 flee ef Inputs and Cost:

0 None of the farmers in any of the data sets (N = 96) strictly followed the
recommended bean production practices“).

0 Out of the sample (N=96), 57% of the farmers applied herbicide, followed by
insecticide (52%), fertilizer (28%), and fungicide (8%). However, input use varied
greatly by location. For example, 90% of the farmers in El Paraiso applied both
fertilizer and insecticides, while only nine farmers fi'om Yoro and Olancho combined
applied fertilizer.

0 Input costs (seeds, fertilizer, herbicide, insecticide and fungicide) constituted the
second largest (after labor cost) share of total enterprise cost (16% to 27% of TEC)

across all data sets, except for traditional farmers during postrera 1999 (Olancho).

4.7.5 Revenue and Returns:

0- All the data sets showed that modern farmers earned higher enterprise gross margins,
and returns to land and management than the traditional farmers.

0 Enterprise gross margin (i. e. operating cost deducted from gross income) was
negative for both traditional and modern farmers during primera 1998 (El Paraiso)
and for traditional farmers during primera 2000 (Yoro) (Appendix 5 & 6). This could
be because they spent a substantial amount for hired labor, which consist of greater
than 40% of the total operating cost in the both cases.

0 Returns to land and management was negative (ranging from US$2.50/ha to

US$349/ha) for farmers (both traditional and modern farmers) in Yoro (Primera

 

4° See table 5.3.1 in section 5.3 for recommended practices.

97

1998) and El Paraiso (Primera and Postrera 2000), and for traditional farmers of
Olancho (Primera 1999) (Appendix 5 & 6).

o The traditional farmers (Postrera 1999) and modern farmers (Primera and Postrera
1999) in Olancho had positive returns to land and management because they used
relatively less labor man-days/ha. The majority of the sample farmers/farms was
located in the plain areas and they used oxen for primary land tillage.

0 Returns to Family Land, Labor and Management per Day across all data sets for both
traditional and modern farmers ranged from minus US$5.3/day (modern farmers of El
Paraiso, Primera 1998) to US$24.2/day (modern farmers of Olancho, Postrera

1999)

4.7.6 Sensitivity Anelysis:

0 Sensitivity Analysis on enterprise gross margin showed that traditional farmers’ gross
margins were more sensitive to yield and price changes than the gross margins of

modern farmers. This may be due to higher yield obtained by the modern farmers.

4.7.7 Modern versus Trflional Farmers:

A major objective of carrying out these record-keeping studies was to compare the
profitability of farmers who used modern bean technology, compared to those who used
traditional technology. It was assumed that farmers who used traditional varieties applied few
other cash inputs (fertilizers, insecticides, herbicides, fungicides) and that farmers who used
modern varieties applied relatively more cash inputs and at higher levels. However, this analysis

demonstrates that there was considerable variability in types and amounts of inputs applied

98

within the group of traditional and modern farmers, across all sites/seasons. In addition, in some
of the data sets, a greater percentage of the traditional farmers applied modern inputs like
fertilizers and insecticides, than did the modern farmers. For example, during postrera 2000
(Yoro), seven traditional farmers used herbicide (average of 1.9 liters/ha), while only one modern
farmer used herbicide (1.4 liters/ha). Similarly, during the same season, six traditional farmers
used insecticide at an average rate of 1.2 liters/ha, while five modern farmers only used at an
average rate of 0.9 liters/ha (which is lower than the rate used by traditional farmers). This
suggests, the variety planted is a weak indicator of whether or not a farmer uses only traditional
inputs, versus those who uses modern inputs, broadly defined as fertilizer, herbicide, insecticide

and fimgicide.

99

CHAPTER V

MPLICATIONS FOR FUTURE RECORD KEEPING ANALYSIS

The analysis in Chapter 4 provides numerous detailed insights regarding the nature of the
bean production system in selected sites/years in Honduras. However, in most cases the observed
differences in yields (and other data values) of traditional versus modern farmers were not
statistically significant.

This chapter analyzes the potential causes of the significance problem and possible
solutions. In addition, given the time and cost required to collect record keeping‘data, the chapter
explores options for using a single interview survey plus standard labor parameters for
estimating the Cost and returns to bean production in Honduras. Finally, the chapter contrasts the

existing bean production recommendation with the farmers’ current practices.

5.1 Yield Difference, Significance and the Sample Size

The average yields across different data sets/locations were highly variable. In general,
the traditional farmers of Yoro (Primera, 2000) had the lowest average yield (284.5kg/ha), while
the modern farmers in El Paraiso (Primera, 1998) reported the highest (1,167.6kg/ha). These
high yield variability is likely due to the location of the farms (hillside versus valleys),
types/quantities of inputs (agro-chemicals) used by the farmers (which is evident from the data
set), and varying soil and weather conditions and disease pressure.

As shown in Table 5.1.1, the average yields of modern farmers were higher than the
yields of traditional farmers. The difference between traditional and modern farmers’ average

yield ranged from 55.2kg/ha (Primera, 2000) to 382.4kg/ha (Primera, 1999). However, upon

100

doing t—test for equality of means, only the difference in average yield (traditional versus modern

farmers) for Olancho (Primera and Postrera 1999) were statistically significant at the 5%

significance level. The failure of the significance test for other data sets is likely due to the small

sample size for each group (traditional versus modern) and unequal sample size between groups,

which is evident for primera 1998, primera 2000 and postrera 2000 data sets (Table 5.1.1).

Table 5.1.1. Average Yield and Significance by Type of F armer, Season/Year and Location.

 

 

 

 

 

 

 

Season, Year and ~ I Traditional n Modern Mean Sig. (t- N ' Total Standard
Location Farmers Farmers Difference test) Deviation
Primera 1998, El 6 955.7 14 1265.4 309.7 0.336 20 1167.6 663.6
Paraiso
Postrera 1999, 9 361.4 11 641.7 280.1 0.018' 20 515.5 281.8
Olancho
Primera 1999, 10 325.1 9 707.4 382.4 0.037‘ 19 516.2 387.6
Olancho
Postrera 2000, Yoro 6 288.0 12 423.3 135.3 0.233 18 330.7 222.0
Primera 2000, Yoro 13 248.7 6 303.9 55.2 0.499 19 284.4 225.2

 

 

 

 

 

 

 

 

 

 

‘The means are statistically significant at 5% significance level.

Sample sizes required for the data sets, which did not show statistical difference in yields,

were estimated using the following formula:

N = (Zn/2 + la)” (a I 6f

Where by;

0 a is the significance level or the risk of rejecting the null hypothesis when it is true.

0 B is the risk of accepting a false null hypothesis when a particular value of the alternative

hypothesis is true.

0 o is the value of the population standard deviation, and

o 8 is the minimum difference in yield between traditional variety and the modern variety

that we want to detect.

101

 

The values used for each variable were; a = 5%, B = 10%, and the values for 6 and 0 were the
population standard deviations and the actual difference between mean yields of traditional
farmer and the modern farmers, respectively. The quantities of the 20,025 (1.960) and 20,10
(1.282) are the upper critical values from the normal distribution.

The sample size that would have been required for the mean yield difference to be
statistically significant at the 5% significance level varied by site/season. The required sample
size for primera 1998, primera 2000 and postrera 2000, using the actual mean difference (6) and
their respective pooled (traditional and modern farmers) standard deviation (0) for each site were

48, 29 and 175 farmers respectively (Table 5.1.2).

Table 5.1.2. Sample Size Required Using the Actual Mean Difference and the Population
Standard Deviation.

 

 

 

 

 

 

 

 

 

Season, Year and Traditional Modern Mean Population Sample Size
Location Farmers Farmers Difference Standard Required
Deviation
Primera 1998, El Paraiso 955.73 1265.43 309.70 663.57 48
Postrera 2000, Yoro 287.97 423.29 135.32 224.96 29
Primera 2000, Yoro 248.72 303.94 55.22 225.19 175

 

Sample sizes required (Table 5.1.2) are highly variable since the mean difference and the
standard deviation vary greatly between data sets. As such, the hypothetical sample size that
would be required for the yield difference to be statistically significant was estimated, assuming
different levels of standard deviations, while using the same values for a (5%), B (10%), and 8

(lOOkgs/ha). The following were the results:

102

 

 

Standard Sample Size
Deviation Required

140 21

160 27

180 34

200 42

220 51

260 71

300 95

 

 

 

 

From the results above, a sample size of 20 would detect a minimum mean yield

difference of lOOkgs/ha, between the traditional and modern farmers, if 95% of the samples
mean yields fall within the range of :t 280kgs/ha (2 standard deviation) from the mean yield. On
the other hand, a sample size of 95 farmers would be required to detect a minimum mean yield
difference of lOOkgs/ha, if 95% of the sample’s mean yields fall within the range of :t 600kg/ha

(2 standard deviations) from the mean yield. The results indicate that a larger sample is required
to detect the difference between the mean yield, if the standard deviations were higher. All the
results are computed assuming a normal distribution in the sample.

Assuming that the expected standard deviation will be around 225 (which is the average
standard deviation for postrera and primera 2000) in future data sets, the sample size required to
identify a 100 kg yield difference as statistically significant (at 5% significance level) would be
approximately 52 farmers (26 traditional and 26 modern farmers). Standard deviation of the yield
of Primera 1998 was dropped fi'om including in the computation of expected average standard
deviation, as it was very high (S.D.=664). Thus, for future record keeping survey, 52 farmers are
required to detect a lOOkg difference in the mean yield of traditional and modern farmers at 5%
significance level with the assumption that their pooled standard deviation was approximately

225.

103

However, causes of high standard deviation in this particular study may be due to the
presence of high heterogeneity in the samples of farmers (e. g. with respect to input used,
topography, etc.) and very large differences in the size of each group (traditional and modern).
Thus, in the future, the sample of farmers in each group (Traditional versus Modern) must be
carefully stratified, each group must be equal in size, and they must be selected to reduce

heterogeneity in terms of their farming environment (hill versus valley) and input use.

5.2 Standard Labor Parameters by Operation

Standard labor parameters (mean and the median) for labor use by type of operation were
estimated from the pooled data set (N=96). Table 5.2.1 shows the mean and the median of
standard parameters, assumptions made, and the transformation required to compute labor cost

for each operation.

104

Table 5.2.1. Estimated Standard Parameters of Labor Use (Mean and the Median) Per Hectare

Bean Farm, for Labor Cost Calculation, by Type of Operation.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Type of Operation Standard Parameters Transformation
Median Mean Units Assumptions Required
1. Land Preparation' - .
With labor only 15.654 16.571 Man-days/ha Standard‘wage rate"
If with traction area (ha)
power was used for 7.156 8.120 Man-days/ha
rirmry tillage
2. Planting 0.186 0.232 Man-days/kg of Man-days needed for Standard‘wage rate
seeds used planting is the *quantity of seed
function of quantifies used (Kg)
of seed used.
3. Application of 2.147 2.417 Man-days per Standard‘wage
fertilizer application for rate'number of
1ha bean farm. applications
4. Application of 2.147 2.478 Man-days per Standard'wage
herbicide application for rate’number of
1ha bean farm. applientions
5. Appliention of 2.505 2.618 Man-days per Standard*wage
insecticide application for rate*nrunber of
1ha bean farm. application
6. Application of _ 1.789 1.849 Man-days per Standard‘wage
fungicide ‘ application for rate‘number of
1ha bean farm. applications
7. Manual weeding 10.730 17.927 Man-days/ha Standard‘wage
rate‘area (ha)
8. Harvesting 0.027 0.046 Man-days/kg of Man-days needed for Standard’wagc
harvest (yield). harvesting is the rate'yield (Kg)
function of yield.
9. Tlueshing 0.011 0.022 Man-days/kg of Man-days needed for Standard‘wage
harvest (yield). planting is the rate‘yield (Kg)
function of yield.
10. Other activities 5.009 5.416 Man-days/ha Standard’wage rate
a/ Ifthe operation is cam ed out without using traction power (for primary land tillage) use the standard parameter with labor

only, if otherwise use the lower standard parameter.

Standard parameter for planting was based on quantity of seed used, and threshing and
harvesting was based on the yield.

Stande parameters for agrochemical applications represent the average number of man-
days used per application per hectare.

The parameters (mean and the median) obtained were validated for each data set using
the actual yield, price, seed rate, aggregated input cost, traction contract cost, wage rate, and

average number of agrochemical (fertilizer, herbicide, insecticide and fungicide) applications.

105

The results showed that return to land and labor, using median values deviated less fiom the
actual, which was computed in profitability analysis, than by using mean values (Appendix 7 &
8).

From the results, we assume that median is more reliable parameter to use than mean for
computing labor days used and labor cost by operation in bean production. The use of the
median is justified by the high standard deviation observed in labor use values for each farming
operation. We assume that this is largely due to measurement error, including fartners’
inaccurate estimates of their bean area (i. e. over/under reporting of planted area biases per
hectare estimates of labor use/ha) and/or recall error regarding the amount of labor that they
actually used. When data are highly skewed, the median is a more reliable estimate of central
tendency than the mean.

However, as shown in Appendix 7 and 8, the estimate of returns to land and management
(Gross Income minus total enterprise cost) when estimated using these labor parameters varies
from the values estimated directly from the record keeping data. Using the median as the
standard labor parameter (Appendix 7), the estimate of return to land and management was lower
than the actual estimate for both traditional and modern farmers in Olancho (Postrera & Pinnera
1999) and El Paraiso (Primera 1998), and it was higher than actual for both traditional and
modern farmers of Yoro (Primera & Postrera 2000). The difference between the estimate and
the actual return to land and management of traditional and modern farmers, using median, for
all the data sets ranged from US$0.88 to US$130.97. It is worth mentioning that the second
highest difference was US$84.97 or the difference for rest of the cases was below US$100.

When using the mean as the standard parameter (Appendix 8), the estimate of return to

land and management was lower than actual for both traditional and modern farmers of all the

106

data sets with the exception of traditional farmers of Yoro (Primera, 2000). The difference
between the estimate and the actual return to land and management of traditional and modern
farmers, using mean, for all the data sets ranged from US$1.32 to US$177.20. The majority of
the difference between the actual and the estimate of returns to land and management was greater

than USSlOO.

5.3. Farmers’ Actual Practices and the Recommended Practices

For most of the inputs, farmers’ practices diverged greatly from the recommendations, as
reported by Juan Carlos Rosas (Table 5.3.1).

Led; The average seed rate for the whole sample (N=96) was 51 .Okg/ha. However, only
15% of the farmers followed the recommended seed rate of 50 to 60kg/ha. Fifty-three percent of
the farmers used less than 50kg/ha, while 32% used more than 60kg/ha.

Fertilizers: Only 27 farmers out of the sample (N=96) applied fertilizer. Out of the 27
farmers, nine were traditional farmers and 18 were modern farmers. The type of fertilizer used
were 18-46-0, 12-24-12, 4000, Foliar Fertilizer, and micronutrients.

’ Sixty-four percent of the farmers who applied fertilizer came from El Paraiso (Primera,
1998). The majority of the farmers, who used fertilizer, applied either 18-46-0 or 12-24-12
during planting time. Few farmers applied Foliar Fertilizer or urea, 4 to 5 weeks after planting,
as is recommended.

Hemicides: Fifty-seven percent (55 farmers) of the farmers in the sample (N=96) used
herbicides, out of which 49% were traditional farmers and 51% were modern farmers. The
majority of the farmers used Paraquat and the others used F qur'flop. Farmers, who used

herbicides, applied it once within the range of three to four days before and afier planting.

107

Insecticides: Fifty-two percent (49 farmers) of the farmers in the sample (N=96) used

insecticides, out of which 39% were traditional farmers and 61% were modern farmers. The

types of insecticides used were Methyl Parathion, Methamidifos, Endosulfan, and Cialotrina.

The majority of the farmers used Methyl Parathion. Most farmers applied insecticides only once.

The application was done either during planting or four to five weeks after planting.

Fungicides: Only seven farmers out of 96 used fiingicide, out of which one was

traditional farmer and six were modern farmers. Six of these farmers came from El Paraiso.

Mancozeb is the type of firngicide used by all seven farmers.

Table 5.3.1. The Mean and the Range of Input Quantities and the Recommended Quantities and

Applications (N=96).

 

 

 

 

 

 

 

 

 

 

 

Inputs n Observations Recommended Practices for Central America
Mean Range and the Caribbean"

Seeds 96 50.97 kg/ha 8.82 - 140.00 kg/ha 50-60kg/ha

Fertilizers 27 96.77kg/ha 0.54 — 261.64kg/ha 80-120kg/ha of 1846-0 or 12-24-12 at planting
plus 20-30kg/ha of urea after four to five weeks
of planting.

Herbicides 55 1.95 liters/ha 0.24 - 4.29 liters/ha One application during pre planting or pre
emergence st:age.

Insecticides 49 1.04 liters/ha 0.01 — 9.45 liters/ha Two applications to control bean pod borer at

' flowering and a week after flowering
Fflicides 7 2.306 gnu/ha 0.36 - 11.42 gm/ha

 

 

 

" Source: Dr. Juan Carlos Rosas, Director, Programa de Investigaciones en Frijol, Escuela Agricola Panamericana,
Zamorano, Honduras. .

108

 

CHAPTER VI
SUMIWARY, RECOIWMENDATIONS FOR FUTURE RECORD KEEPING AND

FUTURE RESEARCH

6.1 Summary

The analysis showed that among the sample of farmers included in the record keeping
surveys, farmers growing modern varieties had higher average yields and earned higher
profits or suffered less loss than the farmers growing traditional varieties. This held true for
all of the five data sets analyzed in this study. Sensitivity analyses on enterprise gross margin
showed that traditional farmers, gross margins were more sensitive to yield and price changes
than for modern farmers. This may be due to higher yields obtained by the modern farmers.

However, yields and profitability varied greatly from data set to dataset. The sample
farmers in El Paraiso (Primera 1998), in comparison to sample farmers in Olancho
(Postrera cmd Primera 1999) and Yoro (Postrera and Primera 2000), reported the highest
average yield for both traditional and modern farmers. This difference in yields may be
attributed to their greater access to information and various inputs (seeds, agrochemicals and
credit), as they are located closer to Tegucigalpa, the capital of Honduras. Ninety percent of
the farmers in El Paraiso (Primera, 1998) applied both fertilizer and insecticides, 30%
applied herbicides and it was in El Paraiso that the highest number of farmers applied
fungicides. In contrast, very few sample farmers in the departments of Olancho and Yoro
used fertilizer. Thus, it is possible that sample farmers in Olancho and Yoro had limited
access to information about the various technologies, and/or did not have access to inputs

(seeds, agrochemicals and credit) at affordable prices.

109

6.2 Recommendations for Future Record Keeping

Due to the time and cost required to collect record keeping data, it has been necessary to
limit the sample size. As a result, in only two (out of five) data sets, were the yield
differences between traditional and modern farmers statistically significant at the 5%
significance level.

Rather than continuing to collect record keeping data every alternate week during the
production season, firture efforts to assess the profitability of bean production should utilize a
single round (post-harvest) or a two round (mid-season and post-harvest) survey to collect
data on the following:

a) Bean area.

b) Type of traction (oxen or tractor) power used and their associated cost and number of

days.

c) Type and amount of inputs (seed, fertilizer, insecticide, herbicide and fungicide)

applied and their associated cost.

(1) Number of applications, by type of agrochemicals.

e) Wage rate for hired labor.

f) Total production

g) Prices received for beans sold and associated marketing cost.

Subsequently, these data—~along with the standardized parameters for estimating labor costs--
should be used to estimate the profitability of traditional versus modern farmers.

, Second, in addition to the small sample size, the non-significance of the yield differences is
likely due to the extreme heterogeneity within each group, with respect to the types and amounts

of inputs used. Thus, in the future, possible farmers to be included in the survey should be pre-

110

screened to insure that all “traditional” and all “modern” farmers are relatively homogenous with
respect to inputs used. To do this it would first be necessary to specify the two groups, in terms
of the desired characteristics of each group, and then purposively sample (quota sampling) to
select respondents who meet the desired criteria.

Third, the variability in farmers’ yield may also be because some farmers experienced yield
losses due to pest and diseases. Thus, in the future, the survey questionnaire should include
question that ask farmers to describe the type and level of pest and disease problems that they
faced during the growing season.

Fourth, in most sites the number of farmers in the sample of traditional and modern farmers
varied greatly. The selection of an unbalanced sample increases the difficulty of identifying
significant yield difference between the two groups. Thus, in the future, an equal number of
farmers should be included in each group.

Fifih, many of the farmers (3 8%) in the sample planted only a very small bean area (less than
0.50 ha). Thus, some of the high variability in yields and input use may be due to converting data
reported'by these farmers to per hectare equivalents. Thus, in the future, the sample should
include only farmers with a bean area of 0.50 hectare or more.

Finally, with respect to sample size, in the future a minimum sample of 26 farmers should be
included in each group in order to be able to identify yield differences of lOOkg/ha that are

statistically significant.

111

6.3 Future Research

This analysis clearly indicates that none of the farmers in the sample adopted the
recommended practices completely and most traditional and modern farmers adopted only a few
of the recommended practices. It is likely that greater adoption contributed to higher yields in El
Paraiso (Primera 1998), compared to Olancho (Postrera and Primera 1999) and Yoro
(Postrera and Primera 2000). Thus, future research should focus on gaining a better
understanding of why most farmers do not follow the recommended practices. Is this because
they are not aware of the recommendation, cannot afford to adopt them, or do not have access to
these inputs? However, the fact that few farmers follow the recommended practices may
suggests that these general recommendations are not appropriate for the bean farming system of
farmers with limited resources and who cultivate marginal land. Thus, there is 'a need to carry out
research to validate the recommended practices and determine if these recommendations--or
another package of recommendations--are more appropriate.

Second, in future surveys, it would be highly desirable to ask the farmers who applied
fertilizers, herbicides, insecticides, and fungicides when they did these applications and why they
carry them out at this time. Similarly, it would be highly desirable to ask farmers who don’t
follow the recommended practices, why they don’t follow them. For example, some farmers may
plant at a higher seed rate than is recommended because of poor germination. Insights gained
from farmers’ responses to these questions may contribute to identifying why they do/do not
follow the recommended practices.

Third, the share of labor cost in total enterprise cost (Appendix 4), for traditional and modern
farmers, ranged from 48% to 78%—depending on the data set. Furthermore, total labor man-days,

as reported by the sample farmers, appeared to be extremely high for some data sets (ranged

112

from 35 man-days/ha during Primera 1999, Olancho to 105 man-days/ha during Primera 1998,
El Paraiso). Thus, there may be an opportunity to minimize total enterprise cost, in order to
maximize profits (or minimize loss), by carrying out research to identify labor-saving
technologies, which are appropriate and affordable for small farmers.

Fourth, given the high variability in observed yields, there is a need to carry out research to
identify the causes of this variability, including the possible contribution of poor seed
germination and/or stand establishment.

Finally, This analysis confirms that farmers who plant improved bean varieties earn higher
profits or suffer lower losses than farmers who plant traditional varieties. However, in most
sites/seasons, yields and profits were quite low. This suggests that while varietal improvement
has the potential to increase farmers’ yields and profits, variety alone has a limited impact on
increasing farmers’ yields and profits. Rather a broader research agenda is required, which
focuses on gaining a better understanding of the causes of the high yield variability and
identifying recommended practices that will both increase yield (and profits) and reduce yield
variability. Similarly, research that focuses on reducing labor requirements has the potential to

reduce production costs and increase farmers’ profits.

113

Appendix 1. Infomiation on Topography, Rainfall and Distance from the Nearest City.

 

 

 

 

 

 

 

 

 

 

Season/Year Department Municipality Locality Topography Avg. Annual Distance fi'om
Rainfall the nearest city
1mm} (Kn!)

Primera 1998 El Paraiso Danli El Barro Plain 800-1000 28 - Danli
El Paraiso Danli Arauli Plain 800-1000 20 - Danli
El Paraiso San Matias Robledal Plain 1200-1400 16 - Danli
El Paraiso Moroceli Limones Hilly 800-1000 7.0 - reg.‘
El Paraiso Guinope Lavanderos Hilly 1200-1400 45 - Teg.

Primera 1999 Olancho Silca Silca Plain 12001400 93 - Julie.2
Olancho Silca Zuntul Plain, Hilly 1200-1400 93 - Jutic.
Olancho Silca Quilinchuch Plain, Hilly 1200—1400 93 - Jutic.
Olancho El Rosario El Ocotal Plain, Hilly 1600-2000 120 - Jutic.
Olancho El Rosario El Rosario Plain 1600-2000 115 - Jutic.
Olancho El Rosario El Pino Plain 1600-2000 117 - Jutic.
Olancho El Rosario Yupite Hilly 1600-2000 122 - Jutic.

Postrera 1999 Olancho Silca Silca Plain 1200-1400 93 ~Jutic.
Olancho Silca Zuntul Plain, Hilly 1200-1400 93 - Jutic.
Olancho El Rosario El Ocotal Plain, Hilly 1600-2000 120 - Jutic.
Olancho El Rosario El Rosario Plain 1600-2000 115 - Jutic.
Olancho ' El Rosario El Pino Plain 1600-2000 117 - Jutic.
Olancho El Rosario Yupite Hilly 1600-2000 122 - Jutic.

Primera 2000 Yoro Yorito ' Santa Cruz Hilly 1600-2000 35 - Yoro
Yoro Yorito La Ladera Hilly 1600-2000 '8 - Yoro
Yoro Yorito Pueblo Viejo Hilly 1600-2000 8 - Yoro
Yoro Yorito Mina Honda Hilly 1600-2000 12 -Yoro

Postrera 2000 Yoro Yorito Santa Cruz Hilly 1600-2000 35 - Yoro
Yoro Yorito La Ladera Hilly 1600-2000 8 - Yoro
Yoro Yorito Pueblo Viejo Hilly 1600-2000 8 - Yoro
Yoro Yorito Mina Honda Hilly 1600-2000 12 -Yoro

‘ Tegucigalpa

2 Juticalpa

NOTE : Juticalpa is the largest city of Olancho
Yoro is the largest city of Yoro
Danli is the largest city of El Paraiso
Tegucigalpa is the largest city and the capitalof Honduas

Source: Dr. Juan Carlos Rosas, Director, Programa de Investigaciones en Frijol, Escuela Agricola

Panamericana, Zamorano, Honduras.

114

 

Yield (Kgflra)

1400
1200 -
1000 .
800 -
600 4
400 1
200 .

Unit Cost (USSIkg)

Appendix 2. Average Yield Difference between Traditional and Modern Farmers by

SeasonIYear. Honduras.

 

 

......

  
 

  

"32%-4v v.55
. . . .
-.-M-. -. --.-.
:.-.'.vk-.R~-\.

  

 

 

 

 

 

 

   

 

 

 

 

‘
C
a.

.5
h

..a
N

d

P
e:

P
.5

P
N

j j

Primera,1998 Postrera,1999 Primera,1999 Postrera,2000 Primera,2000

 

[E1 Traditional Farmers Modern farmers i

Appendix 3. Per Unit Cost of Production for Traditional and Modern Farmers by

Season/Year. Honduras.

 

0.41 0.39

 

 

 

 

1 .37

 

 

 

 

 

 

   

 

 

 

 

Primera, 1998 Postrera, 1999 Primera, 1999 Postrera, 2000 Primera, 2000

 

 

 

reasonTY‘ear
UTadditional Farmers Modern Farmers

 

 

115

Appendix 4. Total Enterprise Cost and us Components for All the Data sets

500—

4504‘

4004/

350 M

300 4/

Cost (US$lha) 250M
200“

150 W

1004’

so —//.

oe

 

by Type of Farmer, Honduras.

 

 

 

  

 

 

 

  

 

  

 

  
  
  

 

       

 

  

   
  

   

   

 

 

I Equity Capital Cast
a Hired Labor Cost

I Family Labor Cost
I Traction Cost

I Input Cost

 

 

   

 

   
 

    

 

 

 

 

 

 

 

'6 E " E '6 E '6 ‘35 E
s . 'é’ § 8 g s 5 s .
a E :2. . s a e a e 3
E a 2 a a,
l- +- l- r— i-
Primera, Postrera Plnnera Postrera Primera
1998 1999 1999 2000 2000
TypaofFarmerbySeasoniYear

116

 

Appendix 5. Traditional Farmers' Gross Income (G1), Enterprise Gross
Margin (EGM), and Return to Land and Management (RLM) by
Season/Y ear, Honduras.

 

 

L

 

assess
iL_l_.L_L

 

I
§
1

 

Revenue and Returns (USS/ha)

g
l

 

 

 

 

 

§

 

SaaaonNaar
{nor DEGII ami]

 

 

Appendix 6. Modern Farmers Gross Income (GI), Enterprise Gm
Margin (EGM), and Retruns to Land and Management (RLM) by
Season/Year, Honduras.

 

 

 

 

 

 

 

 

 

 

 

[not use» Inuit]

 

117

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Appendix 11. Yield Distribution (for both traditional and modern farmers) by Season/Year.

Histogram for Yields, Postrera 2000, Yoro.
7

 

6:

5‘

4.

 

 

  
  

Frequency

 

0.0 200.0 400.0 6WD 8M0 1003.0
100.0 3ND 5WD 7WD 9WD

YIELD

Histogram for Yield, Primera 2000, Yoro.

 

 

 

6
5.
44
3.
2:
5‘
g 1 Std. Dev = 225.19
0?.) Mean=284.5
I: o N=17.00

 

0.0 200.0 400.0 600.0 800.0
100.0 300.0 500.0 700.0 900.0

YIELD

122

Frequency

Frequency

 

Histogram for Yields, Postrera 1999, Olancho.

 

Std. Dev = 281.78
Mean = 515.5
N = 20.00

100.0 300.0 500.0 700.0 900.0 1100.0
200.0 400.0 600.0 800.0 1000.0

 

 

YIELD

Histogram for Yields, Primera 1999, Olancho.

 

31

 

 

 

2 .....

1 -' Std Dev=38756
Mean = 516 2

o """ N = 18.00

 

0.0 200.0 400.0 600.0 800.0 1000012000

YIELD

123

Histogram for Yields, Primera 1998, El Paraiso.

 

41

 

 

—l

Std-Dev=663-57

' ' Mean=1167.6

N=19.00

250.0 750.0 1250.0 1750.0 2250.0
500.0 1000.0 1500.0 2000.0

        

Frequency

0

 

YIELD

124

BIBLOGRAPHY

Bernsten, R.H., D. Mather, D. Mainville, H. Gonzales, and J. Estrada-Valle (2000). Dry Beans in
Mexico, Central America, and the Caribbean: Impacts and Constraints to Increasing
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State University.

Bernsten, RH. and D. Mainville (1998). Smallholder Seed Schemes in Developing Countries:
Lessons Learned & Implications for Designing More Eflective Seed Schemes. Paper presented at
the Workshop on the Production & Distribution of Bean Seed, Zamorano, Honduras.

Casley DJ. and K. Kumar (1998). The Collection, Analysis, and Use of Monitoring and
Evaluation Data. World Bank Publication. The Johns Hopkins University Press, Baltimore,
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Dillon, J .L. and J .B. Hardaker (1980). Farm Management Research of Small Farmer
Development. Agricultural Services Bulletin. FAO, Rome.

Gerlofi‘, DC. and R. W. Holland Jr. (1995). Establishing and Using a Farm Financial Record-
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Harsh, 8.3., L. J. Connor and GD. Schwab (1981). Managing the Farm Business. New Jersey:
Prentice-Hall, Inc., Englewood Cliffs.

Food and Agriculture Organization (F A0), On-line Agricultural Statistics, 2002.

Inter-American Development Bank (April 1999), Problems and Opportunities for Developing
the Rural Economy, Working Paper, Washington, DC.

Ishikawa, Yuki (1999). Ihe Profitability Analysis of Bean Production in Nicaragua. East
Lansing, Master Plan B Research Paper, Department of Agricultural Economics, Michigan State
University.

McConnell, DJ. and J .L. Dillon (1997). Farm management for Asia: 0 systems approach. Food
and Agriculture of the United Nations, Rome.

Mainville, Denise Y. (2000). Relief and Development: Bean Seed Markets in Honduras After
Hurricane Mitch. East Lansing, Master Plan B Research Paper, Department of Agricultural
Economics, Michigan State University.

Martel-Lagos, P.V. (1995). A Socio-economic Study of the Honduran Bean Subsector:
Production Characteristics, Adoption of Improved Varieties, And Policy Implications. East
Lansing, Doctoral Dissertation, Department of Agricultural economics, Michigan State
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Martel-Lagos, RV. and R. Bemsten (1994). The Bean Subsector in Honduras: Historical
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Websites reign-fl

http:/www.hondurasag.org/background/

http://www.intemationalspecialreports.com/theamericas/OO/hondutas/aggiculture/

http://www.countryreports.org/content/honduras.htm
1m://www.immigartion-usa.com/wfb/honduras economyhtml

hm; ://phgtit_r§. com/wfb l 999/hgnduras/honduras economy. html

http://www.fao.org

www.latinsynergy.org/hondurasinfo.htm
www.culturegrams.com/countg/premium/honduras/background/land.htm

 

 

 

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