Low-external Input Rice Production – Chapter 8 – Farm Management Batulandak.info

A guide to decision-making for technology adoption based on production costs

Production costs are those expenses which farmers encounter while producing a crop. These costs include fixed costs (i.e., irrigation fees, land rental, etc.) as well as variable costs (i.e., seed, fertilizer, labor, etc.). Fixed costs are paid by farmers just to begin farm operations; in other words, you have to rent land and pay for irrigation to be able to begin to sow a crop. Variable costs, as the name indicates, vary according to the mode and scale of production. Therefore, variable costs of farm operations provide the best opportunity to small-scale farmers to modify their mode of production and thus reduce their cash expenses. If a farmer has high production costs, but has limited capital he/she can be caught in a cash-flow squeeze, especially during rice-producing months.

The LIRP technologies outlined in this kit are labor or knowledge-intensive rather than capitalintensive. increased labor requirements or the introduction of integrated management techniques are offered as alternatives to capital-poor farmers who may not have access to capital resources for investment in farm technologies (i.e., equipment, more land, hired labor, etc.). The costs of those capital resources, in an informal credit system, comprise a hidden cost of production and can reach 40-50% in four months. Any reduction in production costs can be assumed to save an additional 25-30%, at least, since many farmers use informal credit arrangements.

Since the cost of capital is high and may not be available to small farmers, labor must be substituted to maintain or increase production. However, the opportunity cost (the peso value of that labor if used in an alternative activity, i.e., day labor, driving a jeepney, etc.) of that labor may also be high, as a farmer may value time for leisure or family activities or may require time for other income-generating activities. If a farmer has an option to earn income from an off-farm source, even if the income earned is low, the farmer may opt to earn that income because it is IMMEDIATELY available. Thus, the opportunity cost to an LIRP technology may be high and this fact must be considered when making a decision to adopt (or not to adopt) a technology. For example, if a certain technology requires extra labor at a time when a farmer needs to earn disposable cash (i.e., to purchase food or medicine, pay school fess, etc.), then the technology will not be implemented by the farmer in that situation.

This paper will present actual production cost data from Cavite, Philippines, farmers. Using these data as an example, areas of rice production in which costs can be reduced or eliminated and in which potential yield increases lie will be identified. Pages are included which divide the LIRP technologies into groupings based on rice production activities. Therefore, if a farmer decides that he/she is spending too much on weed control, for example, and would like to reduce those costs, this quick reference can be used to identify those specific technologies which might be adopted in order to reduce weed control costs. Once a certain technology has been selected, a farmer can then use partial budgeting to determine if the introduction of that technology would be advisable, from a purely economical viewpoint. A partial budget example on the use of Azolla as a bio-fertilizer will be presented.

Using actual rice production costs of Philippine (Cavite Province) farmers, the following cost of production framework can be established:

Fixed Costs

Pesos (P)/Ha.



Land Rental


Variable Costs (per cropping)

Seed Bed Preparation

3 days @ P40/day



125 kg.


Land Preparation

3 days (with hand tractor @ P340/day



7 days (with carabao) @ P40/day



30 days @ P40/day


Fertilizer Costs



2 1/2 bags @ P220/bag



1/2 day @ P40/day


Weed Control


Labor for Manual Weed Control

14 day @ P40/day



1 liter


Labor for Spraying

1/2 day @ P40/day


Pest Control



1 liter



1/2 day @ P40/day



(10% of harvest)



(10% of harvest)


** Highest variable cost/ha.

Those areas with the highest production cost/ha. (based on the data presented) are seed, land preparation, transplanting, fertilizer, weed control and pest control. While the actual figures and relative rankings may vary (even widely) across regions or countries, these areas of production costs can be reduced or even eliminated using LIRP technologies. Some cost-reducing strategies for each of the six areas are presented here as alternatives to existing high-external input modes of production.

Many farmers are currently using about 125 kg. of seeds per hectare, more than double the recommended seeding rate of 60-75 kg/ha. The expense for seed in our example is more than P600 for the 125 kg of seeds. Oftentimes, these seeds may be of poor quality, particularly with a low germination rate. Farmers can reduce their seed costs in two ways: cut in half the amount of the poor quality seed they use or buy (savings of more than P300); or only buy 60-75 kg good quality seed. With the use of a drum seeder, seed requirements for one hectare can be reduced to 50-100 kg.

The land preparation costs of over P1,000 presented in our example can be reduced by a variety of strategies. Minimum tillage can potentially cut tillage costs by one-third. Zero-tillage would almost completely reduce tillage costs and offers the potential for producing an early crop. A zerotillage test with no fertilizer or pesticide yielded 2.2 T/ha.

One of the most labor-intensive activities in rice production is transplanting. In areas where labor is costly or unavailable, farmers can reduce production costs by using a manually-operated rice transplanter. In our example, transplanting costs are equal to P1,200 per cropping or P2,400 for 2 croppings. Assuming 6 mandays of labor per cropping (6 mandays x 2 croppings x P40/md) and P900 depreciation, transplanting costs using a manually-operated transplanter can be reduced to P1,380, almost half the cost of traditional transplanting methods. In areas where labor is plentiful and/or inexpensive, the introduction and use of a transplanter could have negative social ramifications.

Savings on fertilizer costs probably hold the most immediate and promising potential for reducing production costs. In our example, farmers have spent almost P600 for fertilizer and the cost of labor for application of that fertilizer. Two-thirds of fertilizer costs (almost P400 for our example) can be saved through the use of big-fertilizers. Sesbania rostrata as a green manure, for example, can easily supply more than 75% of the Nitrogen (N) needed by one rice crop. Many tests show that it can produce all of the necessary N.

Azolla can provide nearly all the Nitrogen needed for a rice crop when multiplied and complemented with enough phosphorous fertilizer. Azospirilla has demonstrated fertilizer savings of one-third. Fertilizer costs can easily be reduced (by 20% or more) without compromising yields by purchasing less fertilizer, but managing it more efficiently. Integrating legumes into the farm system can reduce fertilizer costs by as much as 50%, as well as providing food, fodder and/or fuel.

The LIRP technologies offer a variety of alternatives to reduce the amount or entirely forego the use of petroleum-based chemical fertilizers.

Over P800 was spent by the farmers in our example to control weeds in the rice paddy. Most of this cost accounted for labor (almost P600), but over P200 was spent in the purchase of herbicides. By using a rotary weeder, all cash outlays for herbicide can be saved, although the use

of labor will increase. The weeder will also aid in building soil fertility by incorporating weeds (and azolla, if used) into the soil to decompose and provide organic matter. However, the non-use of herbicides will allow the return of aquatic life such as frogs, fish, etc. The artificial culturing of fish in the rice paddy also becomes possible.

Pest control costs can be cut in half simply by using the sequential sampling method of pest control. For the farmers in our example, that could mean a savings of almost P150. Botanical pesticides, biological control techniques and soil amendments can almost eliminate the need for costly chemical pesticides. Selecting the proper chemicals, using them at the minimum required rate and practicing need-based rather than calendar-based spraying will also reduce pest control costs.


The potential exists for increased yields using the interventions described above not only with lowland rice but also with upland crops following rice. The increase in organic matter plus improved management practices can double yields over the average (300 kg/ha of mung bean, for example, increased to 600 kg/ha) with minimal cost.

Additional components of a rice-based farming system also hold potential for increasing income. Integrating animals such as fish, duck and milk/draft animals into rice-based systems offers the opportunity for a more stable income as well as providing a food/income “cushion” in case of crop failure. Adding a vegetable component can help ease cash flow problems and improve family nutrition. Additional savings can be realized in the form of labor and/or time spent collecting fodder and fuelwood. With sample supplies available from under-utilized areas of the farm, the family will spend less time in search of those farm inputs. By eliminating the use of inorganic pesticides, free food for the family can be realized as natural populations of frogs, mudfish, catfish, etc. return to the rice paddies.

Partial budgeting is a simple, useful method used in estimating the returns received from introducing a new technology which affects only a part of the overall farm enterprise. The partial budget can show a farmer whether an increased cost (in capital or labor) will be offset by the value of the expected increase in yield (or production). A planned change should be implemented only if the value of the expected increase in yield (or production) is greater than the expected increase in costs.

For example, a farmer has looked at his cost of production structure and has determined that his fertilizer costs are too high. He has used the LIRP kit to identify the use of azolla as a fertilizer alternative and would now like to calculate the estimated change in his income due to the use of azolla as a big-fertilizer.



Added Costs

Added Returns

1. Multiplication Pond

1. Azolla as hog feed; savings in feed (kg)


Land preparation (1/2 day)


Fertilizer (2 1/2 kg)


Fertilizer application (1 /2 day)


Seeding azolla (1/2 day)


2. Incorporation

Land preparation and rotary weeding (5 days)




Reduce Returns

Reduced Costs

1. Decreased yield

1. Fertilizer


80 kg @ P3.50/kg


2. Labor to fertilizer








Estimated change in income (if positive, a gain in income; if negative, a loss in income) = Column II Less Column I

This example shows that while a farmer using azolla as a big-fertilizer would encounter added costs of P265 (almost entirely labor costs) and a decreased yield of 80 kg, the cost would be offset by additional savings in chemical fertilizer and hog feed. (It is also worth-mentioning that decreased yields as a result of using azolla will usually only be experienced in the first or second croppings. Then, yields will, in fact, surpass those from inorganic fertilizers.) Therefore, if this farmer is comfortable with increasing his labor input to the farm, his actual cash outlays can be reduced by over P400.


· Reducing Seed Needs
– Drum seeder/Direct seeding
– Dapog/Wet-Bed
– Straight row planting
– Regrowth (dapog)

· Producing Own Seeds/Selecting Varieties
– Traditional vs modern varieties
– Seed selection techniques
– Clonal propagation
· Improving Storage and Germinability
– Seed dormancy
– Seed storage

1. Manually-operated transplanter
2. Line markers/straight-row planting


· Conserving Water
– Water management for drought-prone areas
– Sorjan· Blue-green Algae
– Increase organic matter with green manures
– Water impounding
· Obtaining Better Production from Available Water
– Integrated cropping systems
– Rice-fish culture
– Crop rotations
– Weed control


· Cultural Management Practices
– Crop rotation/intercroppig/relay cropping
– Increasing organic matter
– Water management
– Mulching
– Thorough land preparation
– Row spacing
· Low-Cost Weeding “Tools”
– Rotary weeder
– Straight row planting
– Azolla
– Ducks


1. Using carabao for draft
2. Straight-row planting
3. Sesbania slicer for weedy areas
4. Reducing land preparation time by keeping land covered with “plants” not “weeds” minimum tillage
zero tillage
5. Rice straw utilization
6 Ratooning

· Green Manures and Green Manure Utilization
– Azolla
– Indigofera
– Crotalaria
– Sesbania aculeata or other locally available legumes
– Sesbania rostrata
– Leucaena leucocephala
· Nitrogen Fertilizer Management
· Animal Manures
· Farm Wastes
– Rice straw
– Rice hull
– Composts
· Azospirillum
· Intercropping/Relay Cropping/Crop Rotation
· Nutrient Cycling
· Off-Season Planting Legumes (mung bean cowpea soybeans)


· Cultural Management Practices
– Synchronized planting
– Crop rotation/intercropping/relay cropping
– Sanitation
– Fertilizer management
– Water management
– Plant spacing
– Botanical control
– Low-cost control of Golden Snail
– Planting of resistant varieties
· Major Insect Pests and Their Economic Threshold
– Beneficial insects
– Safe usage of pesticides (need base spraying affected areas only)
– Spot treatment (spraying)
Cost-benefit analysis for low-input rice production (LIRP) technology

Cost-benefit analysis is an important and essential tool in measuring the net effect of a certain technology. Farmers will adopt a technology only when the benefits derived from it will compensate for their labor and other costs. However, environmental and social costs and benefits must also be considered.

Cost-benefit analysis

A guide for technicians, farmers and other agriculture enthusiasts to determine the costs as well as the benefits of components that are included in the technology is presented here.

The costs of the LIRP will perhaps involve slightly decreased rice harvests at least in the beginning and during the transition period to a less chemical-dependent farming system. Labor demand at harvest may also decline slightly .

Another cost will be an increase in labor requirements in crop establishment and maintenance. This can be seen as both a cost (less leisure or alternative production or more work days for the farmer/farm family) and as a benefit (increases in demand for agricultural labor to benefit landless families in the area).

The benefits we foresee include economic, environmental and social aspects. The economic benefits are most obvious.

· Increased net incomes to farmers through reduced cost of production, even in the face of possible slight decreases in crop yield.

· In the long run, improved soil condition and farming practices should lead to increased gross harvests.

· Maximum utilization of scarce resources through improved farming practices. Use of credit, capital, fertilizers (both organic and inorganic), labor, herbicides and pesticides as needed will be maximized.

· Savings in expenditures for family health maintenance and improvement due to reduced potential pollution and improved incomes.

· The development of linkages for small equipment repair, production of non-chemical inputs within the community, encouraging local resource use.

2. Environmental Benefits

· Reduction of pollution of streams, ground water and soils through minimal use of petroleum-based chemical fertilizers, herbicides and pesticides.

· Improvement in soil conditions due to use of green manure, crops which improve soil consistency and minimization of soil damage due to rice monocropping.

· Improvement in the health and nutrition of farm families due to declines in potential chemical poisoning hazards, increases in healthy farm produce and increases in net income.

· Presentation and reintroduction of environmentally important indigenous seed varieties of rice, as well as other crops and livestock grown as a part of an integrated farming system.

· Optional use of scarce water resources.

· Perpetuation of traditional beneficial farming tradition encouraging the stewardship of the land among farm family members.

· Encouragement of family participation in farming activities leading to closer family ties and relationships within the family unit and across generations — preserving advantages of extended family relationships.

· Encouragement of bayanihan (mutual help/sharing) within the community.

· Greater community self-reliance and less dependency on outsiders.

· Greater control over own resources can stimulate greater political awareness and power resulting from improved economic condition and revival of other community organizations (i.e., marketing cooperative) due to new organizational relationships.

– Gross yield — Total harvest or produce in terms of weight or its equivalent
– Gross income — Cash value of the harvest
– Land area cultivated.

· Production share (For those areas in which harvesting and threshing costs are paid as a share of total production.)

– Harvester’s share
– Thresher’s share — Thresher share as payment for services.
· Farmer’s share of production

– Difference between gross income (yield) and production share [gross income (yield) less production share].

· Farm inputs

– List all inputs that have been used:

— crop production (seed, fertilizer, pesticide, equipment, etc.)
— livestock (stock, feed, medicine, equipment, etc.)

– All farm inputs should be specified and quantified (actual purchase cost).

– List all activities conducted during the production phases of rice, fish, vegetables, green manures, livestock, fodder, etc.

– Labor should be quantified (days or hours) and costed (actual expense).

– List all other incurred expenses not grouped under farm inputs or labor expenses (e.g., rentals, transportation, storage, irrigation fees, permits, etc.).

· Total farm expenses (farm inputs plus labor expenses plus other expenses).

3. Net farm income

· Difference between farmer share of production (gross income less production share) and total farm expenses (farm inputs plus labor expenses plus other expenses).


· Consolidated data should be presented in tabular form (except for technology profile which should be presented in a separate sheet).

· Two types of analyses should be executed:

a. Financial analysis (see sample format): cost benefit analysis

b. Immediate impact analysis: effect of the technology in terms of social and environmental benefits.

· Further analysis of economic data can be conducted through the use of simple formulas to calculate farm returns using the LIRP technology. Listed below are three basic formulas which show farm returns to specific farm resources (materials and labor).

· Returns to labor can show a per hour (or per day) value of labor inputs; in other words how much return is received for every unit of labor invested.

Returns to labor = (gross production (income) – farm inputs and other expenses) / labor expenses

· Returns to farm family labor can show the amount of return received for every unit of family labor invested. This calculation can be computed only when the amount and cost of family and off-farm labor is differentiated.

Returns to family labor (hours or days) = (gross production – farm inputs and expenses – cost of hired labor) / amount of family labor (hours or days)

· Returns to farm resources can show the amount of return received for the amount of on-farm resources invested. This calculation can help a farmer to place special emphasis on the value of on-farm resources used within the system.

Returns to farm =gross production (income) –
Resources /ha expenses of non-farm resources
(Technology Title)




1. Production Yield

A. Gross Production

1. Gross Yield

2. Gross Income

3. Land Area Cultivated

B. Production Share

1. Harvester’s Share

2. Thresher’s Share

C. Farmer Share of Production

II. Farm Expenses

A. Farm Inputs

1. Seed/Seedlings

2. Fertilizer

· Inorganic (specify)

· Organic (specify)

3. Pesticides

· Inorganic Pesticide (specify)

· Organic Pesticide (specify)

4. Other Farm Inputs (specify)

B. Labor Expenses

1. Land Preparation

· Plowing

· Harrowing

· Levelling

2. Seed bed/box preparation

3. Seed drying, soaking and incubation

4. Seed broadcasting/direct seeding

5. Pulling of seedlings

6. Transplanting

7. Spreading of green manure

8. Fertilizer application

– top dressing

– side dressing

– basal

9. Pesticide application

10. Weed control

11. Harvesting

12. Threshing

13. Others (specify)

C. Other Expenses

1. Transportation

2. Hauling

3. Irrigation fees

4. Land rental

5. Storage costs

6. Others (specify)

D. Total Farm Expenses

III. Net Farm Income

Simple record-keeping for LIRP

Keeping accurate farm records allows a farmer to monitor expenses, inputs and labor which are invested into the farm and the production, yield and income generated from that investment. The importance of keeping records is emphasized by the need for farmers to have accurate information about cash expenses and incomes channeled through the farm.

Simple record-keeping for LIRP

Farmers have traditionally kept written farm records by recording events, activities, income and expenses on large wall calendars. Also, future farm activities i.e., harvesting, fertilizer applications, etc.. have been noted by farmers using this method.


Building on this traditional practice, a simple record book/ calendar can be designed which will allow farmers to more systematically record fundamental farm information, thus aiding them in decision-making. Two sample formats are presented here.

The inclusion of important astronomical events, i.e., lunar phases, solstices, or equinoxes in the calendar can facilitate making farming decisions for those farmers who use those events as guides. By using one of these sample formats, a farmer or group of farmers can modify the design in order to specifically tailor the components/information to be recorded to their specific production system.

A checklist of LIRP activities to be monitored/recorded in a record-book may include the following:

· Azolla multiplication
· land preparation (plowing, harrowing, levelling, plot preparation)
· seedbed preparation
· use of compost
· transplanting seedlings
· direct seeding
· straight row planting
· incorporation of green manures/animal manures/straw
· fertilizer application
· botanical/chemical pesticide application
· weed control practices
· vegetable production (bed preparation, planting, maintenance, weeds, pests, harvesting)
· fish culture practices (rice-fish-clams, rice-duck-fish, rice- pig-fish)
· Iivestock/animal production
· harvesting/threshing/storage

Rice production using LIRP technologies will bring about two major changes in the farming system — increased savings to the household (through on-farm production of household consumption items and through decreased cash outlays for production costs) and increased demand for farm labor (through the use of labor-intensive technologies). Therefore, to accurately assess the impact of LIRP technologies, a farmer should take extra effort to record the variety of farm savings as well as the amount of increased labor requirements.

While at times difficult to quantify or measure, to the extent possible, materials/resources generated on and derived from the farm, the farm should be assigned a certain value and recorded. For example, posts produced from trees on the farm, fertilizer equivalents from green and animal manures, the amount of fish consumed from a fish pond, or the value of botanical pesticides used in place of chemical-based pesticides should all, be recorded as income to the farm, even though they do not actually generate cash.

To compute monthly returns to the farm, total expenses should be subtracted from gross income (including valuation of the resources saved).

Sample format of simple record book

Sample format of simple record book

Workshop to develop the low-external input rice production technology information kit

The Low-External Input Rice Production (LIRP) Technology Information, Kit is the result of an inter-agency collaboration made possible through the use of an innovative workshop process developed by the International Institute of Rural Reconstruction (IIRR). During a two-week workshop conducted on July 15-30, 1990, IIRR brought together at the Silang, Cavite headquarters, 44 individuals from 10 organizations. Organizations represented included government agencies and institutions, such as the University of the Philippines at Los Ba(UPLB), the Philippine Rice Research Institute (PhilRice) and the Department of Agriculture (DA); non-governmental organizations, such as AGTALON, the Quirino Livelihood Center, the Philippine Rural Reconstruction Movement (PRRM) and IIRR; and research institutions, such as the International Rice Research Institute (IRRI), Cornell University and the University of California at Davis. Participants represented a variety of disciplines, including researchers, agricultural field technicians, rural development managers, farmers, artists, editors and graphics layout persons. While participation involved a variety of organizations and individuals, the logistical arrangements and workshop management was handled by IIRR. The Rockefeller Brothers’ Fund (RBF) and the German Agro-Action provided funding support to IIRR for the field experiences which were presented in the kit, while RBF provided financial support for the workshop proper.

This technology kit attempts to accomplish the primary objective of providing and presenting technological options for rice production systems. The technologies presented are proven technologies based on a variety of sources including institutional research, farmer-level field experiences and/or traditional knowledge practices and systems. The kit is comprised primarily of single-page concept sheets which present individual topics. These sheets are designed to stand on their own, i.e., to be reproduced and distributed in a training session; or can be used as a technical resource package to farmers, technicians or researchers. A systematic effort has been exerted to use a science-simplification approach which allows for assessing technical information and repackaging it in a user-friendly and non-threatening format.

The workshop process involves a number of steps and the participation of several people from diverse backgrounds and disciplines. This process allows for participation of several people for review and assessment of the materials to be included, while allowing for a rapid compilation and production of the materials.

First, relevant topic areas are identified; resource persons who would participate in the workshop are identified; and, specific topics are then matched to the resource persons. Prior to the workshop, they are asked to prepare an initial working draft (two to four pages maximum) of their topic. The draft should include graphics and text and should be written to and for farmers or technicians, not researchers. Care should be taken to ensure that resource persons understand that a formal “scientific paper” is not being presented, but rather a “science-simpilfied” paper.

During the workshop, all invited resource technical persons, as well as editors, artists and layout technicians, attend the presentation sessions. The text and graphics are presented (using overhead projection) to the group. Then, all participants critique, provide input and conduct a peer review of the presentation. Suggestions, changes and revisions are noted and the materials are revised according to the comments in order to incorporate the changes. This process involves the

lay-out specialists, the editors, the artists and, of course, the resource person. The revised draft is again shared with the larger group and approved for final publication. Camera-ready materials are then produced, using desk-top publishing capabilities.

The LIRP Technology Kit was the first kit produced by IIRR involving the heavy use of desk-top publishing capabilities. High-quality, camera-ready materials were produced by IIRR staff in Silang; thus improving the quality of the materials while reducing the printing and production costs normally incurred in materials production.

Once again, the technology kit workshop has enabled IIRR and other agencies to produce a relevant field technology kit which is available for wider sharing to farmers, planners and technicians. While this process can be costly and time-consuming, the workshop method has allowed for cost and time reduction without sacrificing quality.

Rice production situationer in the Philippines

Rice is one of the most important food crops of the world. It is the life blood of more than 90 percent of the people living in Asia who are dependent on rice as a staple food item. It accounts for over 70 percent of the daily calorie intake in countries such as Bangladesh, Cambodia, Laos and Myanmar (table 1).

































Myanrnar (Burma)




















a 1986-88.
b 1989.
c 1985.

Source: IRRI Rice Facts, 1989.

Rice is planted on about 145 million hectares – 11 percent of the world’s cultivated land. Wheat covers a slightly larger land area, but a sizable proportion of the wheat crop is fed to animals. Rice is the only major cereal crop that is consumed almost exclusively by humans.

By the year 2000, the world will need more than 600 million tons of rough rice in order to keep pace with the current population growth rates. (Table 2)




























































Figure 1. Trends in rice production and apparent consumption (production + imports – exports) in the Philippines, 1960-1984.

Table 3. Paddy production, area harvested and yield, 1961-1980.

Leave a Comment