Article: The Charter Estate Grazing Trial Economic Evaluation

Author: Parsons, S.D.

Published: Zimbabwe Journal of Agricultural Research (1984), Vol. 81 (2)

Considering that the overall objective of this research was to compare the economics of two different types of grazing management, then the data presented in this paper should be considered some of the most valuable and well collected from the study.  Costs and income were carefully tracked throughout the course of the research.  In addition, capital investment was also carefully tracked by treatment.  Because the S1-C1 comparisons were modified after the first few years of research, data from the first two years in this treatment block is not included.

The data in the paper is all summarized in tabular format; however, to facilitate visual comparisons between treatments and across categories, I have put this data into graphic figures.  According to the author, direct comparisons between the S1/C1 and the S2/C2 blocks are not advisable due to major differences in veld type.  Therefore, all figures only compare data between a single treatment block but not across blocks.

In terms of average gross margins, the rotational (S1,S2) treatments outperformed the controls (C1,C2): “Whereas average total gross margin for S2 was 27 per cent greater than for C2, the same figure for S1 was only 11 per cent greater than for C1.”

The author also draws our attention to the fact that average gross margin per hectare was greater for the rotational treatments that for the controls.

While the S2-C2 treatment exhibits a consistent trend towards a higher average per hectare gross margin, the S1-C1 treatment shows a less consistent annual trend that is masked in the average.  Gross margin per cow, moreover, was consistently lower for the rotational treatments when compared with the controls.

The author gives an explanation:

This phenomenon is in full accordance with economic principle and can be expected whenever the variable factor (in this case cattle) is increased relative to the fixed factor (land).  The decision as to whether returns per hectare – or as is usually the case some intermediate combination – is to be maximized will depend on whether cattle or land is the most limiting factor for production.

But the author fails to mention that limiting factors are not the only variable to consider, and that capital investment should also be taken into account.  If a greater percentage of capital is invested in cattle, then serious consideration should be given to maximizing output per cow.  This raises the question: Were management decisions that stressed the animals and caused reductions in animal performance wise economically when we consider capital investments?

For both the S1 and S2 treatments investments in cattle occupy a larger percent of the total at an average of almost 60% compared to 50% for the controls.  Interestingly, investments in fencing and water are fairly minimal across treatments.  On a per hectare basis, we see a similar pattern.

Clearly the increases in stocking rates required a significant per hectare investment in breeding cattle for the rotational treatments.  Overall capital requirements were therefore greater for the rotational treatments than the controls.  These numbers call into question the wisdom of sacrificing animal performance for the sake of increases in stocking rate, especially because the expected improvements in vegetation and range quality were not manifest as a result of stocking rate increases.

We are free to speculate about the longer term consequences of this research had it continued.  Perhaps improvements in range would have become evident after 10 years.  Perhaps the return on capital investment would have improved as well, especially considering the significant upfront costs required in the purchase of cattle to increase stocking rates.  The low pregnancy rates/weight gain in the rotational treatments certainly reduced the gross margin, as cattle reproduction and weight gain are the interest on capital in a ranching operation of this sort.

It is most important to remember, however, that the value of this research is not measured in dollars but instead as information.  The well documented tensions between increases in stocking rate and animal performance in the Charter Trials provides us with valuable insights into the ways in which decision-making will influence outcomes.  Years have passed since this research, and many HM practitioners have made great strides in animal performance management.  What is most important at this time is our ability  to learn from the lessons of research and practice, and to apply these important lessons to the task of healing the land and improving our quality of life.