Better Farming Series 14 - Farming with Animal Power (FAO - INADES, 1977, 57 p.) Income from animal power (introduction...) What animal power costs (introduction...) Buying animals and tools Amortization Interest The animals' food Upkeep and repair of tools What animal power farming costs him:

Better Farming Series 14 - Farming with Animal Power (FAO - INADES, 1977, 57 p.)

Income from animal power

Farming with animal power is costly.

The farmer spends money on buying his animals and tools, on feeding and looking after the animals, on mending the tools.

The animals get old, the tools wear out.

After five or six years, you have to buy new oxen and new tools.

The farmer must know how much money he spends on farming with animal power.

He must know what it costs him.

The farmer also knows how much money he makes from working by hand.
He knows how much money he gets from working with animals.

So he knows how much more money he gets from the use of animal power.

The extra money earned with the animal power, less the money spent on it, is the income from animal power.

What animal power costs

To know what animal power costs,

you must know what you have to spend on:

· buying animals and tools;
· feeding the animals;
· the upkeep and repair of the tools.

Prices vary from country to country and from region to region.
The prices given here do not apply to all of Africa.
They are only two examples.

Buying animals and tools

Let us take two farmers, Toumba and Gambara.
Toumba and Gambara each buy

a plough	8000 francs
a pair of oxen	32 000 francs
They each spend	40 000 francs (CFA)

Toumba buys a plough for 8000 francs. In 5 years the plough is worn out. Toumba has to buy another one. He needs money. But he never thought of putting aside any money. So he cannot buy a new plough. Toumba cannot use his oxen any more. He cannot farm with animal power.

Gambara also buys a plough for 8 000 francs. At the end of 5 years the plough is worn out. But Gambara has put some money aside every year. So he can buy a new plough and go on farming with animal power.

How much money be put aside?

Putting money aside to replace tools or oxen is called amortization.

· To replace a plough

The plough costs 8 000 francs.

It lasts 5 years.

To get 8 000 francs in 5 years, you must put aside each year

8 000 /5= 1 600 francs

These 1 600 francs are the amortization of the plough.

· To replace the oxen

The oxen cost 32 000 francs.

After 6 years they are too old and are sold for 20 000 francs.

In 6 years the oxen have lost in value

32 000 francs less 20 000 francs = 12 000 francs.

In order to have enough money in 6 years' time to buy new oxen a farmer must put money aside every year for the amortization of the oxen, that is:

francs /6= 2 000 francs.

For the amortization of the plough and the oxen the farmer must put aside every year

1 600 francs plus 2 000 francs = 3 600 francs.

Amortization

Amortization means putting aside every year the money to replace your tools and oxen.

Interest

Gambara buys

a plough	8 000 francs
two oxen	32 000 francs
Gambara spends	40 000 francs

But Gambara hasn't got 40 000 francs.

So he asks a friend or a bank to lend him the money.

His friend, or a bank that has 40 000 francs, could use the money to buy a shop and do business.

The 40 000 francs would bring in money.

This is why the friend or the bank that lends you money asks you to pay back more.

If the bank lends you 100 francs for one year, and asks you to pay back 105 francs at the end of the year, and say that the bank asks for 5 percent (5%) interest. The extra 5 francs are the price you must pay for the loan of 100 francs for one year.

For a farmer who is lent 40 000 francs, interest at 5% a year works out as follows:
40 000 francs x 5/100 = 2 000 francs interest each year.

Interest is the money a farmer must pay each year for the use of money lent to him

Each year Gambara must put aside in order to pay for his oxen and his plough:

Amortization	3 600 francs
Interest	2 000 francs

Total
_5 600 francs

To replace his animals and his plough, Gambara puts aside each year 5 600 francs.

The animals' food

Gambara gives a feed supplement to his working oxen (see page 27). Each animal gets 2 kilogrammes of sorghum on days when it works.

Instead of giving the sorghum to the animals Gambara could have sold the sorghum at, say, 12 francs a kilogramme.

Gambara should know how much money he could have got for this food.

Each working day the food for the two oxen costs him: 4 kilogrammes x 12 francs = 48 francs.

The oxen work 100 days a year.

Their food costs him: 48 francs x 100 = 4 800 francs.

Upkeep and repair of tools

Work wears out tools.

They must be mended, the ploughshare must be replaced.

Gambara spends 500 francs a year for mending tools.

· Gambara reckons

What animal power farming costs him:

amortization	3 600 francs
interest	2 000 francs
Animals' food	4 800 francs
upkeep of tools	500 francs
Total	10 900 francs

· Gambara reckons what animal power farming brings in:

Before he used animal power Gambara earned:

for cotton	26 francs X 300 kg	7 800 francs
for food crops	20 francs X 100 kg	2 000 francs
for groundnuts	15 francs X 200 kg	3 000 francs
Total		12 800 francs

With animal power, Gambara earns more money because he gets bigger yields:

for cotton	26 francs X 800 kg	20 800 francs
for food crops	20 francs X 400 kg	8 000 francs
for groundnuts	20 francs X 600 kg	12 000 francs
Total		40 800 francs

by using animal power Gambara has earned more, namely, 40 800 francs less 12 800 francs = 28 000 francs.

But Gambara has spent 10 800 francs for the costs of animal power farming.

So the animal power has brought in, has raised his income by 28 000 francs less 10 900 francs = 17 100 francs.

Before using animal power, you must work out how much more income you can earn by it.

For animal power to bring in more money, you must be able to farm 3 or 4 hectares of land and have, in addition, 2 hectares of fallow land to feed the oxen.

If the oxen work less than 100 days, they cost too much.

The amortization and the interest to be paid per working day are too costly.

Look at the example once more:

For amortization and interest on his oxen and tools, Gambara must pay 5 600 francs.

If the oxen work 100 days, amortization and interest cost him: 5 600 francs /100= 56 francs a day

If the oxen work 50 days, amortization and interest cost him: 5 600 francs /50= 112 francs a day

If a farmer has not got enough land to keep his oxen working, he can combine with other farmers, so as to give the oxen more work.