Economic factors contributing to the adoption of reduced tillage technologies in central Saskatchewan

Abstract

The zero-tillage and minimum-tillage technologies, which are now being rapidly adopted in many areas of western Canada, have made a significant contribution to the sustainability of the soil resource. As a measure of economic viability of these practices this study uses the Top Management Model to simulate the 5-yr ending equity given stochastic prices and yields for a consensus farm in central Saskatchewan. Simulations are used to compare a minimum disturbance, zero-tillage system to a more conventional direct-seeding system. At 1994 crop and input prices, and a 10% yield advantage, zero-tillage systems compared favourably with conventional direct-seeding system. The relative crop yield and glyphosate price are key determinants to the short-run profitability of adopting zero-tillage technologies with fuel price having a smaller influence. When the switch to zero tillage allows a net reduction in machinery stock, this simultaneously increases the profitability, and reduces the financial risk for the producer. We conclude that in areas of Saskatchewan where zero-tillage systems provide a yield advantage, producers will continue to adopt these systems as an economically viable means of sustaining their soil resource. Key words: Adoption, zero tillage, economic determinants, herbicide prices, risk