Krishna P. Paudel, Neil R. Martin, Jr., Nancy Kokalis-Burelle, and Rodrigo Rodriguez-Kabana

Alabama, Georgia, and Florida produce about 65% of the nation's
peanuts. Uncertainty about government price support and increasingly stringent environmental regulations place many of these growers in double jeopardy. Recent AAES research indicates three year rotations that include switchgrass in the rotation may provide more environmental benefits, while cotton-peanut rotations provide greater economic gains.

Pesticide expenditures in peanuts are more than $100 per acre. The major traditional crops rotated with peanuts to reduce certain chemical applications, such as nematicides, are cotton and corn. However, these alternative crops do not alleviate the environmental concerns because they are heavily dependent on other chemicals. Search for an alternate crop that would require less chemical input has been intense by agriculturalists with the prompting of environmentalists.

Advocates of sustainable agriculture propose the incorporation of forage grasses in cropping patterns since this often results in reduced chemical use and soil erosion, which help reduce water quality degradation. Switchgrass, a native warm season forage grass, can be found from the U.S.Canadian border to South Florida and Texas. This grass has low fertilizer requirements, is widely adapted to different soil types, has soil conservation properties, a deep root system, and provides an excellent wildlife habitat. Switchgrass may be a good rotation crop in peanut fields to reduce the infestation of nematodes and diseases, such as southern stem rot and cercospora leaf spot. If switchgrass is adopted in a peanut rotation system it may create a cropping system that reduces a farmer's dependence on chemicals.

To learn more about the environmental and economic benefits of using switchgrass, information obtained from cropping experiments conducted at the Wiregrass Substation in Headland, for three years and enterprise budgets from the Alabama Cooperative Extension Service were
linked.¹ Florunner peanut, Alamo switchgrass, and Deltapine 90 cotton varieties were incorporated in different experimental rotation systems.

Eight cropping patterns were compared over a three-year period. The cropping systems included in this analysis were:

Peanut plus Peanut plus Peanut with Temik (PNTPNTPNT);
Peanut plus Peanut plus Peanut without Temik (PNTPNTPNT);
Switchgrass plus Peanut with Temik plus Switchgrass (SGPNTSG);
Switchgrass plus Peanut without Temik plus Switchgrass (SGPNTSG);
Switchgrass plus Switchgrass plus Peanut with Temik (SGSGPNT);
Switch grass plus Switch grass plus Peanut without Temik (SGSGPNT);
Cotton plus Peanut without Temik plus Cotton (CTPNTCT); and
Cotton plus Cotton plus Peanut without Temik (CTCTPNT).

The amount of money spent for chemicals was measured as a proxy for determining the effect of a cropping pattern on groundwater pollution, assuming that the amount of money spent on chemicals correlates with the amount of chemicals used. It should be noted that with some of today's low-input chemicals this cost-use comparison would not be feasible because these low-input chemicals are more expensive even though less chemicals are used. However, in this study costs of traditional chemicals were used.

The study assumed that an ideal rotation pattern was one that maximized profits while minimizing risk and chemical use. All three factors should be considered when selecting an environmentally and financially beneficial crop rotation system. Multi-objective solutions were compared for minimum level of chemical use at given levels of income and risk.

The eight different combinations of enterprise rotations were analyzed for their profit potential and the extent of environmental degradation each rotation caused. The analyses were done for a peanut-based cropping system. Since Congress is currently considering substantial modification or even the elimination of the peanut quota system, the analyses were conducted based on three scenarios: (1) the existing situation (peanuts priced at $700 a ton), (2) possible future peanut quota price assumptions (peanuts priced at $625 a ton), and (3) a situation in which no peanut program exists (peanuts priced at $500 a ton).

The results of these analyses are shown in Table 1. The first analysis is the present situation where farmers can sell quota peanuts at prices that are fixed by the U.S. Department of Agriculture. In this situation, half of a farmer's land was planted in peanuts for three consecutive years and the remainder in cotton for two years followed by one year of nonquota supported peanuts. Maximum profit was $351,143 with a deviation $23,373. Chemical use was calculated to be almost $212,000.

To compare this with switchgrass-based rotations, the model required that rotation patterns include at least one year of switchgrass. This resulted in a reduction of profit to 28% of the former level. On the other hand, in this situation the farmer used a much lower volume of chemicals ($92,381). Risk was measured to be $13,354 deviation in this maximum profit level.

Assuming that Congress will continue a peanut program similar to the past program with quota price reduced to $625 per ton, maximum profit for the analytical farm would decline to $286,724 but enterprise selection and chemical application remained the same. Risk was reduced only slightly to $22,047.

A requirement that cropping patterns include at least one year of switchgrass with a peanut price of $625 per ton resulted in 78% less profit compared to the unrestricted solution. Risk also was reduced, but the cropping pattern and chemical use did not change from the forced switchgrass solution at a $700 per ton price.

Analyses of cropping pattern selection, income and risk, and chemical use in the absence of the peanut program also were conducted for a peanut market price of $500 per ton. Cropping pattern and chemical use were identical to the results for the past peanut program and the modified program with a price of $625 per ton. Income with the $500 per ton price was approximately the same as for the $625 price because there was no price reduction for additional peanuts in the $500 per ton analysis. However, deviation in income increased to $38,378 in the absence of the stability provided by the past peanut program.

A requirement that cropping patterns include at least one year of switchgrass with a peanut price of $500 per ton resulted in the selection of switchgrass followed by peanuts followed by switchgrass. Income was
slightly higher and deviation slightly lower than the parallel solution with quota peanuts priced at $625 per ton. Chemical use was $92,384, the same as the other solution restricted to include at least one year of switchgrass.

Table 2 contains additional analyses in which cropping patterns were selected to maximize profit subject to farm resource limitations plus a requirement that chemical use not exceed the level associated with Table 1 solution, Which includes at least one year of switchgrass. All cropping patterns were candidates for selection with the requirement that chemical use not exceed $92,384. The highest income (lowest deviation), $179,244 ($15,036), was found under the conditions of the past peanut program. The cropping pattern for this solution was continuous peanuts on 149 acres. This, the maximum profit solution, left 251 acres idle in order to hold chemical application to $92,384. Obviously, the ratio of idle acreage to peanut acreage would facilitate a rotation of peanuts and idle land. Perhaps a peanut-idle rotation pattern would allow use of less chemicals per acre, and thus greater possible income, but this was not reflected in the experimental data and not included in this analysis.

The cropping pattern in Table 2 (chemical expenses limited to $92,384) for the $625 per ton peanut price situation was a small amount of cotton followed by peanuts followed by cotton (eight acres) and 193 acres of cotton followed by cotton followed by peanuts. Profit is less than the parallel result for the current program, but income deviation is increased.

Maximum profit results, assuming elimination of the peanut program, a market price for peanuts of $500 per ton, and a maximum limit on chemical expenses of $92,384, provided $149,103 in income with a deviation of $18,967. Interestingly, this is more than twice the income and only five percent more risk with the same level of chemical expense as the parallel solution in Table 1, where cropping systems were required to contain at least one year of switchgrass. This is because PNTPNTPNT and CTCTPNT rotations in Table 2 replaced the SGPNTSG rotation in Table 1. Thus, from a standpoint of maximum profit with an analytically derived limit on chemical application, peanut rotation systems with switchgrass are not economically competitive with continuous peanuts and the peanut rotation system with cotton.

From this analysis, we can conclude that peanut-switchgrass rotation has some benefit based on environmental aspects but not based on profit alone. If we do not consider the externality created by the application of chemicals on groundwater and the environment, then we have to say that switchgrass is not beneficial in a peanut rotation system. However, its almost stable yield and low-risk income is attractive to peanut growers who must struggle to maintain income with minimum risk in an increasingly regulatory environment. Also, switchgrass has multipurpose benefits that other forage grasses do not possess.

Continuation of the experimental test used in this study will allow for further analysis of switchgrass as a relatively new rotation alternative. The model and approach contained in this paper will be useful in conducting such analysis.

Paudel is a Graduate Research Assistant, Martin is a Professor of Agricultural Economics and Rural Sociology; Kokalis-Burelle is a Post-Doctoral Fellow and Rodriguez-Kabana is a Professor of Plant Pathology.

¹Budgets for major row crops in Alabama. 1994. Alabama Coperative Extension Service, Department of Economics and Rural Sociology, Auburn University.