Zeitschrift fr Bewsserungswirtschaft, 42. Jahrg., Heft 2 /2007, ISSN 0049-8602 Seiten 119 - 129

D. Breazeale, I. Khan,N. Al-Saadi and K. Curtis

The economics of continuing commercial rhodes grassproduction under sprinkler irrigation in the al-BatinahRegion of the Sultanate of Oman

Die Wirtschaftlichkeit des kontinuierlichen Produktionvon Rhodesgras unter Beregnung in der RegionBatinah des Sultanats von Oman

StichworteRhodesgras, Produktionskosten, Bewsserungsmanagement, Wasserpolitik,NachhaltigkeitKey wordsRhodes grass, production costs, irrigation management, water policies,sustainability

SummaryDue to increased competition for limited water resources in Oman, crop profitability is now becomingmore important and is receiving more attention, especially in the case of high-water-use crops such asRhodes grass. As Rhodes grass production in the Al-Batinah region requires significant water, productionof Rhodes grass is being held responsible for over-capacity water pumping, resulting in salt waterintrusion into coastal aquifers. There is little documented information in Oman related to Rhodes grassprofitability. This study found that while Rhodes grass is marginally profitable, given current yieldsand output prices, even small price increases for such inputs as irrigation would quickly create negativereturns for producers. Therefore, the long term sustainability of Rhodes grass production in the Al-Batinah region appears to be pessimistic.

1. Introduction

Rhodes grass (Chloris guyana) is an important irrigated crop in the Sultanate ofOman. In terms of total hectares, Rhodes grass ranks first among perennial crops at7,300 hectares followed by alfalfa at 5,447 hectares and sorghum at 2,048 hectares(Ministry of Agriculture and Fisheries, 2004). The crop is used primarily as livestockfeed within Oman but is also exported to surrounding countries.

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In Oman, the major producing region is Al-Batinah, located along the coast beginningnorth of the capital Muscat. The Al-Batinah region produces approximately 5,400hectares while the Dhofar region in southern Oman is a distant second with less than1,500 hectares (Figure 1 - Map). The other five ecological regions of Oman combinedonly have about 400 hectares of Rhodes grass under production. All of the Rhodesgrass in Oman requires irrigation; mostly from sprinkler systems, but there is a smallbut sizable amount, under flood irrigation and a few farms with bubbler and evenfewer with drip systems (Ministry of Agriculture and Fisheries, 2004). Dependingon the location, Rhodes grass will use from 3 1/2 to 5 meters of water per hectare onan annual basis (Sultan Qaboos University, College of Agricultural and MarineSciences, Agricultural Experiment Station, 2007). The concern in Al-Batinah is thatincreased competition for water is resulting in salt water intrusion into the coastalaquifer (Al-Barwani and Aboul Aata, 2006). In addition, as urban populations expandin the Al-Batinah region, there is increasing pressure for producers to move to areaswhere land is less expensive. As a result, political and economic pressures are beingexerted on agricultural water users to increase irrigation efficiency, and in the caseof Rhodes grass, to move their farming operations to the southern region wherethere is more rainfall and the aquifers are not as stressed. While water use efficiencystudies have been conducted on forage crops in Oman (GOLOMBEK et al., 2007and SIEBERT et al., 2007), there is little information on the economic feasibility offorage crops. Therefore, commercial producers are increasingly interested in theeconomic feasibility or profitability of remaining in the Al-Batinah region or growingRhodes grass elsewhere.

Due to the agronomic consequences of salt water intrusion and the economicimportance of Rhodes grass production, producers and government policy makersare looking more closely at the costs and returns of the crop when discussing possiblealternatives. Therefore, the purpose of this paper is to determine the economicprofitability of Rhodes grass produced by a fully mechanized, commercial farmingoperation in the Al-Batinah region of Oman. While there is a growing body ofinformation concerning the effects of salt water intrusion and evapotranspirationrates of Rhodes grass and other forages, there is little information on the actual costsof production and profitability of the crop for use by stakeholders. Therefore, thethree objectives of the study are as follows:

1. To determine and document typical establishment and annual production costsfor Rhodes grass in the Al-Batinah region of Oman.

2. To determine the profitability (break-even) of Rhodes grass in the Al-Batinah re-gion of Oman.

3. To provide baseline data for policy makers and producers concerning the continuingfeasibility of Rhodes grass production given the current level of salt water intrusion.

Figure 1:Sultanate of Oman - Administrative areas

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2. Methodology and assumptions

Sample costs and returns to establish and produce Rhodes grass under sprinklerirrigation in the Al-Batinah region of the Sultanate of Oman were calculated basedon the production practices considered typical for a large, commercial andmechanized farm in the region. All calculations are in Omani Rials (RO) and oneRO is equal to 2.59 USD. Each RO contains 1000 baiza. The following assumptionsrefer to Tables 1 and 2 and reflect the typical establishment and annual costs andreturns to produce Rhodes grass under sprinkler irrigation in the Al-Batinah regionof Oman. The practices described are not recommendations, but rather the productionpractices and materials considered typical of a well-managed farm in the region, asdetermined from information gathered by in-person structured interviews withproducers. Costs, materials, and practices are not applicable to all situations, asestablishment and cultural practices will vary among growers and between regions.A Your Farm column in Tables 1 and 2 is provided for individual growers tocompare their own costs.

3. Results and discussion

3.1 Establishment cost for rhodes grass production3.1.1 Representive establishmentFarm The representative farm consist of 15 hectares of land in production. It isassumed that the farm will have sufficient infrastructure, including an irrigation systemand machinery, to produce Rhodes grass. During the year, the farm will produceseven cuttings of hay with an average of just less than three tons per hectare. Theland market value was estimated to be 4,800 RO per hectare in 2007.

Stand establishment The establishment year includes approximately 15 monthsand typically follows a rotation of row or field crops. This time period allows for theestablishment of the new planting and one full year of production. The life of thestand is estimated to be 10 years. Establishment costs and returns are provided inTable 1.

Land preparation Rhodes grass is generally planted into the ground after removalof the previous plant material. The land will normally be irrigated once or twiceduring this period. Discing, and smoothing of the soil takes places in order to providefor a proper seed bed. In this example it is assumed that the land owner does thishimself. An application of herbicide is often applied during this time period at a costof 38.25 RO per hectare.

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Table 1:Oman Al-Batinah Rhodes Grass Establishment Costs, 15 Hectares 2007Calculations are in Omani Rials (RO) - 1 RO = 2.59 USD

Fertilization A basal dose of 300 kg of 20-10-10 NPK per hectare is broadcastinto the soil during seed bed preparation at a cost of 42.00 RO per hectare.

Planting In late summer or early winter, Rhodes grass seed is drilled or broadcastat a rate of 25 kg per hectare. Seed cost is estimated to be approximately 18 RO perkg.

Total Units UnitPrice/Cost Per Unit

Total Cost/Value

Total Cost/Value Per Hectare

Your Farm

OPERATING COSTS Herbicide (Combi-U46) 9.00 Liters 4.25 573.75 38.25 ________Land Preparation 15.00 hectare 10.00 150.00 10.00Fertilizer (20-10-10) 6.00 Bags 7.00 630.00 42.00 ________Seed 25.00 Kg 18.00 6750.00 450.00Irrigation (electrical power only) 1.00 hectare 5.00 1125.00 75.00 ________Owner Labor 1.25 annual 1200.00 1500.00 100.00Hired Labor (1 person) 1.25 annual 960.00 1200.00 80.00 ________Fuel & Lube 1.25 Annual 990.00 1237.50 82.50 ________Annual Repairs 1.25 Annual 555.50 694.38 46.29 ________Harvest 2000.00 bundles 0.09 180.00 12.00Interest Operating Capital 6,982.81 RO 0.05 175.51 0.35 ________

TOTAL OPERATING COSTS 14216.14 947.74

OWNERSHIP COSTSCASH OVERHEAD COSTSOffice & Travel 1200.00 80.00 ________

TOTAL CASH OVERHEAD COSTS 1200.00 80.00

NONCASH OVERHEAD COSTS (Capital Recovery)Irrigation System 2520.00 168.00 ________Machinery & Vehicles 1743.75 116.25 ________

TOTAL NONCASH OVERHEAD COSTS 4263.75 284.25

TOTAL OWNERSHIP COSTS 5463.75 364.25

TOTAL COSTS 19679.89 1311.99

YEAR ONE INCOMERhodes Grass Hay 20.00 Tons 50.00 15000.00 1000.00 ________TOTAL GROSS INCOME 15000.00 1000.00

TOTAL ESTABLISHMENT INVESTMENT 4679.89 311.99

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Irrigation Immediately after seeding sprinkler irrigation commences to ensureproper germination of the seed. Water will initially be applied everyday and thenabout every two days after germination depending on the temperature at plantingtime. Electrical power is the cost and is 60 RO per hectare.

Custom harvest The first harvest will take place two to three months after planting.Harvest costs are estimated based upon 100, 10 kg bundles, per ton and cost 90baiza per bundle. Harvesting is handled by a custom harvesting company. Theharvested bundles are either stored or transported.

Establishment investment The Rhodes grass investment cost is depreciated acrossthe 10-year life of the stand.

3.1.2 Production cultural practices and material inputsIrrigation - Rhodes grass in Al-Batinah requires constant irrigation. Irrigation costsare shown in Table 2 and cover the per hectare cost of power only. There are no costsfor water at the present time in Oman. Maintenance costs on the sprinkler system areincluded under annual repairs. The annual estimated per hectare cost for irrigationis 60 RO.

Fertilization - Fertilization normally is undertaken after each of the seven cuttings.After cuttings 1, 2, 4, 5, and 7 approximately 300 kg of Urea is applied at a cost of174.00 RO over the season. After cuttings 3 and 6, approximately 300 kg of 20-10-10 NPK is applied at a cost of 84.00 RO per hectare. Total fertilizer costs are equalto 258 RO per hectare.

Weeds - Weed control applications are quite variable. However, many growers willuse Combi-U46 for weed control once or twice during the year at a cost of 38.25RO.

Custom harvest - For our particular example, we assumed that the farmer did notown his own harvesting equipment, but that he custom-hired a harvesting crew tocut, cure, and bundle the Rhodes grass hay. With approximately 100 bundles per tonand a yield estimated at almost 3 tons per hectare, 300 bundles are harvested andhauled away at a cost of 90 baiza per bundle or 12.00 RO per hectare. This is basedupon a custom harvesting rate. As during the establishment year, the bundles areeither stored or transported.

Labor - The owner labor is based upon a 100 RO monthly management fee. Thelaborer salary is based upon a rate 80 RO per month inclusive of the yearly laborlicensing fee.

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