Performance Story: Economic Value of Diversified Cropping Systems
The purpose of the project was to improve understanding of the value of diversified cropping for three regions of the Canadian Prairies with different climatic conditions. These included the Parkland region where canola dominates cropping systems, southern Manitoba where warmer season crops such as corn and soybean can be grown, and the semi-arid prairies where pulse crops such as lentil are widely grown. The research motivating problem was how intensive cropping of a crop can eventually lead to reduced yields and productivity due to increased disease or allelopathic effects of previous crop residues. Funding was provided over four years by the Western Grains Research Foundation and six additional funding partners. The three regional components of the project were undertaken at the Universities of Alberta (Parkland), Manitoba (southern Manitoba) and Lethbridge (semi-arid prairies).
Description of Research and Results:
Parkland Crop rotations and risk There is an ongoing concern with the continual concentration of canola (Brassica napus) in crop production systems. The limited number of break-years between canola crops provides an ideal environment for diseases such as clubroot (Plasmodiophora brassicae) and black leg (Leptospaeria maculans) to overcome genetic resistance in current canola cultivars. Frequent canola in current cropping systems can be attributable to the short-term profitability of canola relative to competing crops, such as wheat and barley. Another factor often overlooked in cropping decisions is the influence of business risk management (BRM) programs, especially crop insurance and AgriStability. There have been studies that found significant agronomic benefits from less canola-intensive and more diversified cropping systems, but with newer hybrids and changing crop prices the economic benefit could still favour intensive canola cropping. Understanding the role of production factors and prices in determining risk efficient crop rotations is important for producers and those upstream and downstream from them in the industry. The study examined canola cropping systems representative of the cooler Parkland region of Alberta (Black – Camrose and Dark Gray – Smoky River soils), and Saskatchewan (Black soil - northwest). The simulation analysis determined the expected net returns from crop production for representative cropping operations for three representative farms in the areas of study. In addition to average expected returns, production and market price risks were incorporated through modeling of stochastic processes. Farm-level benefits, costs, net present value were analyzed in a risk framework to identify risk efficient rotations. The cropping system of spring wheat and canola was the base rotation for all representative farms. Alternative cropping systems were varied in terms of crops included and length of rotation. In addition to spring wheat and canola, crops in rotations included barley, oats, field peas, and flax. Varying the length and the number of crops made the impacts of different levels of output diversification clear and comprehensible. All rotations for the three representative farms had positive expected returns at the yields and prices used in the modelling. More specialized crop production, such as rotations with intensive canola rotations, had higher returns in the short-term. Long-term actual and potential costs were less than the higher economic benefits of intensive canola rotations. For producers to adopt less intensive canola-based crop rotations, the returns from these rotations need to be higher. The annualized additional per acre returns, for a risk neutral producer, were approximately $34, $2, and $11 in the counties of Camrose and Smoky River, and in Saskatchewan, respectively. The risk analysis also indicated that participation in BRM programs, such as crop insurance, reinforced the benefits from intensive canola-based rotations over more diverse rotations. The results highlighted economic aspects of negative productivity factors (e.g., disease event incidence and severity) from intensive canola cropping, information that producers could exploit to improve their cropping decisions.