Integrated Farm Planning: Environment and Economics

To help farmers evaluate economic and environmental tradeoffs of alternative crop and livestock production systems and practices, the PLANETOR software package was developed by the Center for Farm Financial Management, University of Minnesota, in cooperation with the USDA Farm Resource Management System Task Force.1

PLANETOR requires users to enter detailed data on crop production practices and rotations, costs of production, production levels and variability, and farm financial transactions and status. The software calculates the potential consequences of production practices for soil erosion, water quality, and pesticide toxicity and provides output on net farm income, net worth change, and income risk. Little information has been published about farmer reaction to PLANETOR. The objective of this ES-USDA funded study2 was to evaluate PLANETOR from the perspective of both farmers and Extension specialists.

During mid-1992, four farmers from Oklahoma and five farmers from Pennsylvania tested PLANETOR (version 1) for their farms.

Six of the farmers had written production records and financial records and statements. The other three relied on invoices, farm tax records, and their memories to provide the necessary data.

Two of the participating Oklahoma farmers grew primarily dryland and irrigated winter wheat, with some irrigated corn, soybeans, and grain sorghum. Of the other two farmers, one raised peanuts and corn, with some pasture and hay and the other grew vegetables. In Pennsylvania, all five farms were geared primarily for the production of feed crops for livestock enterprises. The dominant crop enterprises on these farms were corn and hay, with some soybeans, small grains, and forage sorghum grown.

Each cooperator completed a 17-item evaluation of PLANETOR. Each item used a six-point scale. The cooperators didn't feel strongly about the accuracy or value of the environmental output. Soil erosion and water quality output were judged by the farmers to be generally inaccurate and not valuable (average rating 3.2). Many changes in tillage practices, irrigation management, or pesticide application rates didn't have the expected impact on environmental results. Pesticide toxicity results were judged not valuable (2.9 rating), primarily because this information is available in greater detail on the pesticide label.

The economic output of PLANETOR was judged to be of somewhat greater value. Resource availability output was judged to be fairly accurate (4.4) and valuable (4.8), while profitability output was deemed to be slightly less valuable (4.3) and accurate (3.7).

In general, Oklahoma farmers were more favorable about PLANETOR (average overall rating 5.5) than the Pennsylvania farmers (average overall rating 2.8). Oklahoma farmers found it slightly less difficult to provide the information required by the software. The integration of crop and livestock enterprises is somewhat awkward in PLANETOR. This also made it more difficult for Pennsylvania farmers to apply the program.

The time specialists spent with the farmer running the program and interpreting the results was minor compared to time spent collecting, interpreting, and entering data into the program. On average, almost 17 hours, or 74% of the specialists' total time per farm, was spent collecting and entering data. Given the large amount of data analysis, manipulation, and entry required by the program, specialists didn't perform these steps in the farmer's presence.

Oklahoma specialists spent the majority of time on data manipulation and entry following initial farm visits. Because of the prior availability of some production records, Pennsylvania specialists spent much time evaluating rotations and livestock operations before making the first visit with the farmer. This preparation was necessary because of the complexity of the rotations and livestock operations and to reduce the amount of time required of each cooperator.

Specialists spent an average of six hours working directly with the farmers. More time was spent gathering data from the farmers in Oklahoma (just over 3 1/2 hours) compared to Pennsylvania (just under 3 hours), but this reflects the lack of prior farm data in Oklahoma. More time was spent in Pennsylvania (just over 3 hours) than in Oklahoma (2 hours) demonstrating the program and interpreting the results because of the more complex rotations and greater number of fields.

PLANETOR makes a credible attempt to combine many different aspects of a farm operation into a single piece of computer software. For the cooperating farmers, the primary lesson learned was the importance of comprehensive, up-to-date farm production, and financial records. Even for farmers who maintain production and financial records, the data collection phase indicated gaps and additional uses of their records. The program also forced farmers to consider both the economic and environmental consequences of alternative production scenarios. This experience was undermined, however, by the insensitivity of the environmental section of PLANETOR.

Building a computer program that analyzes the economic and environmental tradeoffs of agriculture is difficult. An easy-to- use program risks oversimplifying or overlooking important economic or environmental relationships. One that uses sophisticated environmental and economic models is less suitable for most non-research users. The marriage of economics and the environment in PLANETOR poses additional problems. To revise the input and interpret the output, the specialist or other facilitator must be comfortable with economics and all aspects of agricultural production, including soils, crops, livestock, nutrient management, and pest management.

One question continually asked by specialists and cooperators was whether the value of the output from PLANETOR was worth the time involved. A major institutional obstacle to adopting and using the software is identifying likely facilitators. Admittedly, some of the time spent to apply PLANETOR could be attributed to learning the program and correcting mistakes. But even for an experienced user, it would still be a time-consuming process. With funding flat or dwindling and the service attributes of Extension being deemphasized in favor of educational objectives, it's unlikely many Extension specialists or agents will be able to devote the time required to conduct many PLANETOR runs.

1. J. E. Ikerd, "A Decision Support System for Sustainable Farming," Northeastern Journal Agricultural Research Economics, XX (April 1991), 109-13 and R. O. Hawkins and D. W. Nordquist, "PLANETOR: A Computer Program for Analyzing Environmental Problems," in Agriculture and the Environment: The 1991 Yearbook of Agriculture (Washington, D.C.: GPO, 1991), pp. 173-74.

2. This research was supported, in part, by Cooperative Agreeement 91-EXCA-3-0144, between USDA Extension Service, Oklahoma State University, and Penn State.