Economic value of diversified cropping systems

Crop Dry Bean, Pea, Soybean
Start Date2018
End Date2023
Principal InvestigatorSmith, Elwin, Agriculture and Agri-Food Canada, Lethbridge
MPSG Financial Support$15,000
External Funding PartnersWGRF

Research Objectives

  1. To determine the net return and variability of net return associated with cropping systems of different rotation length and diversity of crops. The variability of net return (risk) will be considered in the evaluation of production systems. The analyses will be for each of three ecosystem regions in the Canadian prairies.
  2. To determine the marginal user costs of the “pests” associated with reduced diversity in cropping systems; these marginal user costs represent a proxy for the expected long-term benefits to producers from greater diversification.
  3. To determine the degree to which participation in business risk management (BRM) programs (crop insurance, AgriStability) affect the long-term economics of cropping systems (e.g., potentially masking of negative impacts of reduced diversity).

Project Description

Short crop rotations provide an environment conducive for an increase in plant disease, weed pressure from herbicide resistance, and insect damage (these productivity decreasing factors will be referred to as “pests” in this document). While short rotations are currently profitable, the lack of diversification in a cropping system can be detrimental to maintaining crop yield and profitability.

The industry requires economic information on the trade-offs between current profits of short rotation systems with a limited number of crops, that also have a high potential for reduced future productivity and higher costs, against diversified cropping systems that maintain productivity and profitability. Systems that lessen the likelihood of productivity and profitability decline due to increased pest levels should have higher long-term profits.

This study will utilize budgeting methods and dynamic economic models to determine the long-term economic trade-offs across a range of diverse cropping systems. The models will contain agronomic relationships of rotation impacts on pests over time and of pests on crop yield. The economic models will be used to simulate expected returns and the variability of returns to assist producers in selecting cropping systems that sustain productivity and profitability. The analyses will be for three regions in the Prairies that have different cropping systems and production issues: (i) southern Manitoba, (ii) the Black and Gray soil zones, and (iii) the Brown and Dark Brown soil zones.