Abstract
Adopting technology regarding agricultural crops has traditionally been associated with high costs. Producers have thus often abstained from adopting better agronomical practices and have consequently lost the benefits they could otherwise have obtained by implementing better criteria for managing their crops.This research builds on results by Ruiz et al., (2017) who found three typologies of oil palm lots, regarding adoption of technology and yields on oil palm crops from Colombia. This work was aimed at evaluating the typologies found by Ruiz et al. (2017) from an economic standpoint by using different economic assessment methods, in order to determine the benefits of technology adoption at the Colombian oil palm agroindustry. The methods used were aimed at estimating: unit cost, net present value (NPV), net income, land use efficiency, generation of income and competitiveness.Results indicate that the cost of producing a ton of fresh fruit bunches from oil palms (FFB) on lots having high adoption of technology was 2.5% to 8% lower when compared to lots having lower adoption of technology (Typologies 2 and 3. respectively). Technology adoption enables greater yearly net income to be obtained in mature oil palm crops in typology 1, than the one obtained at typology 2 and typology 3. The adoption of technology allows the grower to obtain net income equivalent to a legally-established yearly minimum wage (LEYMW), using less land. Finally, it was concluded that at average CPO prices for the period 2005-2015, the Colombian growers that participated in this study, may be competitive at the European market, which is the main destination of Colombian exports of crude palm oil (CPO).
Highlights
The adoption of agronomic techniques by rural producers has been reported as one of the main drivers to reaching high yields in agricultural crops, together with new varieties and management techniques (Fischer, R.A., 2015; Beddow, Hurley & Pardey, 2014)
Results show that at a crude palm oil (CPO) price of USD 785 per ton, it would be necessary to produce at a cost of USD 656/ton CPO al mills located at the region where the study was carried out
The latter means that one ton of FFB should cost at the maximum USD 111.5 (Table 5). This ceiling cost was compared to the estimated production costs for each typology considered in this study (Table 6)
Summary
The adoption of agronomic techniques by rural producers has been reported as one of the main drivers to reaching high yields in agricultural crops, together with new varieties and management techniques (Fischer, R.A., 2015; Beddow, Hurley & Pardey, 2014). There are obstacles to overcome in order to enhance the adoption of technology. One finds the socio-economic characteristics of the grower and, the idea that implementing new technologies is expensive. Regarding the former, the results from Ruiz, Mesa, Mosquera, & Beltrán (2015), indicated that, variables such as poverty, age and, the experience of the grower at cropping oil palms; are related to producers that are reluctant towards adopting new technologies at their oil palm crops. The greater the grade of literacy achieved by the growers, the more prone is the grower to adopt new technologies (Ruiz, Mesa, Mosquera, & Beltrán, 2015). The latter is the case, when the grower is attended by an extension service, that points out to him the cost efficiency of investing on novel technologies (Ruiz, Mesa, Mosquera, & Beltrán, 2015)
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