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PRODUCTION PAPER

An Economic Comparison between Conventional and No-Tillage Farming Systems in Burleson County, Texas

^a Dep. of Agric. Econ., Texas A&M Univ., College Station, TX 78843-2124
^b Dep. of Soil and Crop Sci., Texas A&M Univ., College Station, TX 78843-2474

^* Corresponding author (lribera{at}tamu.edu).

Received for publication September 25, 2002. Tillage systems that reduce the number of cultivation steps can, according to soil scientists, save soil moisture, fuel, labor, and machinery costs, as well as reduce wind and water erosion. However, many producers in South Texas are reluctant to adopt these practices. The objective of this study was to compare the economics of conventional tillage (CT) and no-tillage (NT) systems on three commercial crops produced in South Texas: grain sorghum [Sorghum bicolor (L.) Moench], wheat (Triticum aestivum L.), and soybean [Glycine max (L.) Merr.]. When considering the economics of both tillage systems, three areas affecting profit were addressed: changes in cost per hectare, changes in yield per hectare, and the impact on net income risk. Empirical distributions of net income for different tillage systems under risk were estimated using a Monte Carlo simulation model of net income per hectare. Certainty equivalents were used to rank the tillage systems because they can be used to rank risky alternatives for risk-averse decision makers. The risk premium for risk-averse decision makers who prefer NT over CT ranges between $12.60 and $34.25 per hectare for all five crop rotations. Risk-neutral decision makers would prefer continuous sorghum and sorghum–wheat–soybean rotation over all other rotations under CT and NT, respectively. However, risk-averse decision makers would prefer continuous sorghum over all other rotations either under CT or NT. The results suggest that under risk-neutral rankings, NT would be preferred over CT in three out of the five crop rotations tested. However, assuming a risk-averse decision maker, NT would be preferred over CT in all five crop rotations.

Abbreviations: CDF, cumulative distribution function • CE, certainty equivalents • CT, conventional tillage • MVE, multivariate empirical • NT, no-tillage • RAC, risk aversion coefficient • S, grain sorghum • SB, soybean • SWSB, sorghum–wheat–soybean (rotation) • W, wheat • WSB, wheat–soybean (rotation)

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