Understanding
sugarcane replant cost


Tshepo Pilusa


The South African Farmers Development Association (SAFDA) collaborated with a range of experts from the South African Sugarcane Research Institute (SASRI) to establish its first replant cost guidelines.


The consultative process led to the need to clearly recognise and emphasise the difference between sugarcane establishment and replant cost. Replant costs are associated with a growing concern, while establishment costs are more associated with the establishment of sugarcane on virgin land or former area under sugarcane.


The budget cost difference between replant and establishment is likely going to vary significantly.


Heavy bush clearing and intensive land preparation, including additional soil tests, e.g. subsoil may be needed for establishment, while for replant there may only be a need for soil tests for maintenance of continuous good soil health.


The article aims to present and explain SAFDA’s cost structure of replanting a hectare of sugarcane, including an adjustment of some standards or norms. It must be noted that these are not contractor rates, but guidelines to assist farmers with budgeting.


The costs of replanting a hectare are also likely to differ between farms, depending on soil quality, farm terrain, sugarcane variety, etc. It is advisable to adjust the guidelines in line with the realities of the farm.


Cost structure analysis


Table 1 shows the estimate budget costs of each guideline, including the percentage contribution breakdown of each activity. The cost structure is similar, just a minor difference in components of some cost activities.

Table 1: Estimate cost of replant guidelines

Activities

Minimum tillage

Percentage

Mechanical

Percentage

Land preparation

R2 732

10%

R3 665

14%

Plant

R3 657

14%

R3 657

14%

Seed cane

R7 776

29%

R7 776

29%

Soil health

R5 854

22%

R5 854

22%

Weed management

R3 237

12%

R3 121

12%

Sundry

R3 488

13%

R3 611

14%

Total

R26 744

100%

R27 684

100%


The average replant cost is R27 214 and the cost difference between the operations is R940. This is due to the difference in land preparation and chemicals application method.


In general, a minimum tillage operation is less mechanisation intensive and relies on labour for lime, chemicals and fertilizer application. A less mechanisation intensity operation caters for farmlands with undulating terrains and more importantly it contributes less to soil erosion.



Replant cost guidelines rationale


The estimate replant cost guidelines are not custom-made and farmers are advised not to adopt them at face value. They are mainly a tool to assist farmers with budgeting and to provide suggestions for changes to some requirements. They also do not represent an average of each operation; however, an effort has been made to achieve a balance between extreme end scenarios of each operation.


Farmers are therefore urged to seek assistance from the SASRI extension service.


Similarly, these are not contractor rates. Presentation of any guideline as an invoice to anyone is not appropriate, contractors should quote farmers based on a “job cart”. Requirements should be discussed before work commences and the budget should be revised accordingly, before an invoice is presented.




Key cost areas


Land preparation



Regardless of the method, this is mainly driven by the mechanisation component. This depends on tractor size and estimated operating hours per hectare, which are influenced by efficiency factors, such as field terrain, soil type, tractor operator experience, etc. Therefore, it’s important to consider farm soil type and other aspects before choosing tractor size. In dryland areas a 60 kW will mostly do but in irrigated areas where there are heavier soils, a relatively heavier tractor maybe required.



Plant



Is mainly a labour activity, since available mechanisation is not refined enough to deliver exceptional results. Labour productivity needs to be considered as it is influenced by factors like terrain. However, 25-persons per day is considered appropriate, but may be accordingly.



Seed Cane 



Rate per hectare is influenced by variety, which is dependent on size of the stick. The rate of 12 tons per hectare may sound high however more tons per hectare may be required for relatively thin sticks compared to bigger sticks. For medium to small size varieties, one and half (overlap placement) to two sticks may be required. Application rate should also take cognisance of germination and expected population. It is therefore important to understand the profile of the variety before planting or seek guidance from SASRI. The price is relatively low, since its mechanistic to the RV price and estimated seasonal average RV percentage, with a 35% premium on the price of sugarcane.



Soil Health



It’s very important to apply the right amount of nutrients to the soil so farmers must conduct soil sample test analyses with SASRI. Applying nutrients without a soil test may result in over or under application of nutrients – more than required application of nitrogen is likely to result in high fibre or non-sucrose and excessive potassium application is likely to result in high ash content. The ton of lime in the guidelines is not the exact rate, but a motivation for farmers to do soil sample test, especially in dryland. Lime is difficult to deal with and expensive, due to high transport cost, but it’s very important. It’s better than experiencing acidity which limits root growth; and results in restricted water and nutrients uptake, leading to yield decline. It’s important to conduct a soil sample test early, as it takes up to three weeks to get recommended application rates. Application can be done using both labour and mechanisation – and the timing is very important.



Weed Management



Farmers are advised to keep up to date with the list of registered chemicals released by SASRI. The choice of chemicals should be in line with soil type, as it determines the type of weeds that are likely to prevail in your farm. Timing of application is once again important.



Sundry



Caters for farm-specific components including a broad range of efficiency levels, price changes during the season, support labour, differing mechanisation components, management fees, etc. Hence, this item is meant to compensate for under budgeted areas of the cost structure. Consequently, it’s likely going to vary from one farm to another.





Fuel implication

The continuous increase in the price of fuel makes it compelling to highlight the implication on the guidelines, which follows on the understanding of fuel pricing in the previous issue* of the Sugar Journal. 


The tables below present estimate fuel litres utilised on each replant guideline activity performed with mechanisation, a 60 kW tractor and number of hours. Hence, actual fuel requirement will depend on actual number of hours spent and intensity of mechanisation utilisation. 


The tables also compare costs between 2017 and 2018 based on October prices of 0.005% S diesel between the years. The price of diesel increased by 28.87%, from R12.18 in 2017 to R15.69 in 2018. So, if a farmer uses 1 000 litres of fuel per annum, the fuel cost would have increased from R12 177 to R15 692 between October 2017 and 2018. 


Farmers can get a reprieve, but only if records are kept. According to SARS, farmers can claim the full Road Accident Fund (RAF) of R1.93 and 40% of R3.22 fuel levy or R1.29, which is a total diesel rebate of R3.22 claimable on 80% of qualifying diesel utilisation. In the above example, this would result in a refund of R3 218 or 20.51%.


Litres of fuel required for mechanical operation
Activities Mechanical operation
Litres 2017 2018 % Change
Contour 15.29 186.20 239.94 28.87%
Ploughing 8.62 104.98 135.28 28.87%
Ridging 21.41 260.68 335.92 28.87%
Harrowing 15.75 191.79 247.15 28.87%
Land preparation 61.07 743.64 958.30 28.87%
Boom spray 6.79 82.71 106.59 28.87%
Weed management 6.79 82.71 106.59 28.87%
Total 67.86 826.36 1064.89 28.87%
Litres of fuel required for minimum tillage operation
Activities Minimum tillage
Litres 2017 2018 % Change
Contour 15.29 186.20 239.94 28.87%
Minimum till 15.75 191.79 247.15 28.87%
Land preparation 31.04 377.99 487.10 28.87%

*For context, refer to the July – September 2018  edition of the South African Sugar Journal digitally available at www.sasugar.co.za



Conclusion


The RV pricing system requires farmers to farm for RV, the recoverable value from the stick of sugarcane, which in a way promotes precision farming.


Farming is a science, which requires thorough planning to ensure appropriate application rates to maximise RV. Farmers can utilise various farm support services available from SASRI, millers’ and sugarcane grower bodies for assistance with planning.


Note: Farmers are welcome to request a workshop to better understand these guidelines provided they can organise themselves in a group of at least 20. Arrangements can be made with regional staff of SAFDA.



Tshepo Pilusa
is Economist at South African Farmers Development Association

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