Both profitability and riskiness are important economic issues to consider when adopting new seeding technologies. This study assesses the risks and returns of changing to a direst seeding system in the Parkland Region of Saskatchewan.
One popular tool used in assessing the profitability and riskiness of alternative reduced tillage systems is stochastic dominance. The stochastic dominance approach divides alternatives into efficient and inefficient risk return groups. An alternative is risk efficient if no other alternative has a superior rate of return for its risk or lower risk given its return.
Three farm sizes: 920, 1840 and 3680 acre, represent the different range of farm sizes in the Black Soil zone. The three tillage systems used are conventional, 2-Pass and 1-Pass. The three rotations used are 1) oilseed/cereal where one year in six is summerfallow, 2) a 50/50 rotation of broadleaf and 3) spring cereal crops and a 50/50 rotation of broadleaf and cereal crops with one year in four as winter wheat. Alternative cropping systems are formed by pairing a tillage system with a rotation. Conventional tillage with an oilseed/cereal rotation is the defender system challenged by seven other alternatives.
The efficiency rankings of each cropping system for each farm size demonstrate that the 1-Pass system with the 50/50 rotation of broadleaf and spring cereal crops is the risk efficient cropping system. All risk averse producers regardless of farm size would choose the 1-Pass system. The higher herbicide costs of the 1-Pass system are offset by reductions in fuel, labour and capital use.