Horse Powered Traction and Tillage: Some Options and Costs for Sustainable Agriculture, With International Applications. Chet Kendell Michigan State University, Doctoral Student, CARRS Dept. Abstract: Often overlooked, the use of the heavy horse for agricultural work persists. Research at Michigan State University indicates a major increase in Michigan of the use of equines as work animals. Amish and others are effectively using horses in agriculture. Environmentally conscious farmers can be found at trade conferences quietly discussing the practicality of using horses. Horses reduce the off-farm inputs of diesel fuel and lubricants and reduce pollution. At the same time horses fit well into a diverse farming system already embraces livestock. They minimize ground compaction and their manure contributes to soil fertility and health. Using horses in agriculture can facilitate positive community interaction. This paper takes a praxis perspective, as a practicing sustainable farmer who uses draft horses extensively on his own farm and as a Ph.D. student. It provides a model for others to evaluate their potential costs and benefits of using horses. Fundamental economics and values are discussed. This analysis includes variability in labor and fuel rates with implications for international agriculture. It indicates that even though the choice to use horses is often a value laden moral choice, there is also an economic basis as well, especially if the regenerative potential of the horses are utilized. This conclusion is dependent on the scale of farming operations with the price of labor and fuel being other key variables. Keywords: animal traction, tillage, draft horse, agriculture, economics, development, sustainable, organic, soil compaction, community, agriculture pollution, environment, regeneration, scale, soil fertility. Introduction When we think of agriculture traction and tillage options we instinctively think in terms of scale. One would not normally use a 100-horse power tractor to till an acre of cut flowers, nor does one till 160 acres of potatoes with a spade. At the same time as millions of research dollars are being spent on bio-fuel development, there is a simpler and more efficient means of turning bio-mass into agricultural traction. Because of the prevalence of mechanical and industrial based agriculture, other options are often overlooked, options that are used extensively in less industrially intensive nations, namely the use of animal traction for tillage. With increasing frequency, in Sustainable Agriculture or in a working group of Organic farmers, you can hear the subject surface of using draft horses for farming. In a 1998 Michigan State University Extension publication on equine use, Drs. John Shelle and Ken Gallagher documented a surprising trend; that of the increase in using horses for work. In the time period from 1984 to 1991 they saw total number of horses in Michigan declined by 19% but the horses used for work increased by 54%. The intention of this analysis is simply to give us a reasonable place to initiate a discussion into the subject and to allow for the comparison of options. It is a discussion of scale dependent technology as it relates to both domestic and international agriculture. The first hurdle to overcome is the mental perspective when we think about using horses for fieldwork. This discussion is about workhorses, not pets (1). For almost two generations, we have thought of horses in the context of parades, shows, hobbies and pets. This is a crucial concept. Working horses are a part of the larger whole farm system; they need good honest care, but not adulation. The appreciation for the intelligence and talent they add to the farm will come with time (2). Page 1 of 8 pages A working model This paper is written to provide a means for farmers to evaluate the option of using horses for traction and tillage. What are the costs and benefits associated with using draft horses on the small sustainable farm? Are they an economical option, and why? On what size of a farm might they make sense? How does the price of labor and diesel fuel affect the decision? What are the implications and applications for international agriculture? To begin, establish costs for each option, i.e. tractor power and horse power, and then look at the trade off using some fundamental cost evaluation tools. Because there is little current published data on horse traction in agriculture, it was necessary to use data from our own farm. We chose to use horses to improve the whole farm system; including family involvement in the farm, the understanding of the economics came later. I have made my assumptions explicit so that others may substitute their own values and make their own comparisons (3). Assumptions The assumptions include a diversified farm, operated with a sustainable consciousness (3). It is comprised of approximately 25-30 acres. This type of farm would generally have slower and lower power requirements and typically will not apply to a large monoculture type farm. Tractor power needed per acre farmed is 1.4 hp. I use as a reference the Doane’s Agricultural Report, Vol. 63, No. 34-5, August 2000 for estimated equipment operating costs. The tractor costs from my own operation are consistent with this report but conservative. My operational costs for using horses are also conservative. The Work Horse Handbook (4)identifies as an appropriate rule of thumb to use 2 horses for 40 acres, this analysis uses 2 horses for 25 acres. Horses needed per acre farmed are .08. Using horses requires an additional 20% total labor time. Tractor is new, 35hp w/o loader @ $15,000. Horses; 2 pregnant draft mares, 5 years old, harness, and PTO cart @ $8,000 total. The tractor is new and to make an equal comparison the horses are also in their prime. Regarding using mares, I would add my consensus to the statement of Orval Pierce as quoted in the Draft Horse Journal in the Winter 2001 - 2002 edition, p.29(5). “DN: Some people say that it’s hard to work mares - better to work geldings. What do you say about that? OP: They don’t know what they’re talking about. I went to the field when I was 6 or 7 and worked mares all my life. I’d sooner work a mare as a gelding any day.” The support equipment and garage/barn facilities for a tractor or horses have equivalent costs. The horses have colts 4 years out of 5. The initial team of horses is sold at 15 years old for $1000 each and replaced by progeny. Tractor is traded in for a new one every 10 years (5000hrs). Trade in value is $5000. Horse manure and urine will off set chemical fertilizer costs by $365 per year. This is a difficult value to assess. Most studies will look only at the nitrogen value of manure, but the total effect on the soil and the farm is much greater than just the nitrogen. The $365 per year is simply my best estimate at one half of the operating cost. The farm owner is the tractor operator or horse teamster and takes their wages from farm profits. I estimate that it takes an additional 20% labor to use horses. There is an obvious learning curve involved here for both horses and human. Don’t expect this relationship to hold the first time in the field with horses. Patience, practice and perseverance will improve this. It is Page 2 of 8 pages fully expected that each different farming operation will certainly have different values specific to their operation. Annual operating costs for using horses are $730. In a comparison of these annual operating costs with two Amish farmers, C. Miller of Shipshewanna, IN, and R. Yoder of Mio, MI, their expression was that the numbers represented a “good rule of thumb”. The basis is: hay to be purchased at two dollars per bale of hay, one-half a bale per day per horse. Horses are fed hay for seven months of the year and graze for the other five months. This totals $425 and leaves $305 dollars for grain and veterinary and miscellaneous cost each year. The assumption is that there is land on the farm that is best utilized for livestock grazing. This kind of grazing might be located on ground that may be too steep, too rocky, or too wet. For example, it might be field corn stubble, the ground cover in orchards, at the sides of roads and lanes or located at the corners of a center pivot irrigation system. It could be communal land or land placed in a conservation program. The principle of grazing on communal or marginal ground is especially pertinent and well understood the international community. It is worth noting that even if hay must be purchased for the entire year and grazing is not available, using draft horses on a small sustainable farm is still a revenue function and the basic conclusions and recommendations do not change. This model allows the substitution of individual farm values and estimates. It allows the individual practitioner to customize the analysis as needed for his or her particular farming situation. You will notice that the analysis is conducted on a cash basis because it is more conservative. A= C= D= F= H= I= J= K= L= M= N= O= P= Q= R= S= T= U= V= Farm labor rate Consumption rate of fuel Price of diesel fuel Farm Size Investment, initial for horses Investment, initial for tractor Additional Labor, Horses Residual value of PTO cart Tractor or team hours per acre per year Manure value Years in farm career, (age 25 - 65) Annual operational cost for tractor, tires, oil, filters etc. Replacement cost for tractor Annual operational cost for 2 horses, feed, vet, etc. Replacement cost for horses Sales price of horse progeny, (4/5*2*1000) Value at end of useful life, horses Useable life of horses and tractor (5000 hr.) Trade in value on tractor = $6.00 / hr. = 1.00 gal / hr. = $1.00 / gal. = 25 acres = $8000 = $15000 = 20 % = $500 = 20 hr. = $365 = 40 years = $250 = $15000 = $730 = $1600 = $1600 = $2000 = 10 years = $5000 Career cost of using a tractor = I +(P*(N/U-1)) + N*(O +(D*C*L*F)) - (N/U*V) This is simply the initial cost + replacements + operating cost - trade in value. Career cost of using horses = H + (R*(N/U-1)) + N*(Q + (A*J*L*F)) - N*(S+M)-(N/U*T)-K. Page 3 of 8 pages This is the initial cost + replacements + operating cost and extra labor - value of manure and progeny - value for the horses and PTO cart at the end of their useful life. Using this model a tractor powered sustainable farm, over a 40-year career, would have the following cost associated with using a tractor; total costs of $90,000 and total revenues (trade in on old tractors, every 10 years) of $20,000, for a net cost of $70,000. A horse powered farm, over a 40-year career, would have the following costs associated with using horses; total costs of $61,200 and total revenues of $82,300 for a net revenue of a $21,100. This identifies a key concept: Using draft horses for farm traction resembles a typical livestock revenue function, not a cost function. This relationship is dependent upon utilizing the regenerative potential of horses. The use of a tractor is a classical cost function (6). Think about it this way. If you are raising a lamb, calf, or colt crop, raise a draft colt crop instead on those same acres and the traction power is available to use if your horses are trained to work in harness. Graph I. Long Run Total Revenue and Cost for Tractor and Horses $30,000 $20,000 $10,000 $0 ($10,000) ($20,000) Horses ($30,000) Tractor ($40,000) ($50,000) ($60,000) ($70,000) ($80,000) 1 5 10 15 20 25 30 35 40 Years The difference between using horses and tractor power is $21,100 plus $70,000 equals $91,100 over a 40 year farming career. Cash Flow: Looking at this on a cash flow basis, the difference is even more pronounced and possibly even more relevant, as it is cash flow that is often problematic for the farmer. Over a 40year career a horse-powered farm will generate $61,600 in cash revenue compared to $70,000 of costs for a tractor powered farm. The difference between the two options is $131,600. We are actually comparing a cost function to a revenue function and assets that depreciate to assets that appreciate. Horses as the traction source would be the preferred decision for a farm of this scale and scope. It might help to recognize that there is still a significant population in the U. S. who use horses for traction power on their farms. It has been estimated that there are 150,000 - 200,000 Amish people as well as others farming with horses as a traction source. In visiting their communities one immediately notices that their farms look prosperous and homes well kept. Variations in Farm Size We must look at the effect of farm size on the range of that conclusion. A key point in this discussion is the question; how many horses can one work at a time? More that one is certain and Page 4 of 8 pages up to 8 is common. In maintaining a conservative approach, I assume that that one person can comfortably work up to 6 horses at a time. Tractor size can be increased without adding hired labor to operate the tractor. However, teamsters will need to be hired as the farm size increases beyond the size workable by the owner/teamster and six horses. By holding the above values constant, the formula can be simplified as follows: The 40 year career cost of using a tractor is 7333 + F (1707 + 800D) where F is the farm size and D is the price of diesel fuel per gallon. The 40 year career cost of using horses where F is the farm size and A is the labor rate in $ per hour is as follows: 0-75 acres ………………………………………………………………………F ($160 A - 1804) 76-150 acres………………………………………………………-$63,300 +(F-75) (960A -1804) 151-225 acres…………………………………………………...$233,400+(F-150) (1760A -1804) 226-300 acres……………………………………………………$890,100+(F-225) (2560A-1804) 301-375 acres…………………………………………………$1,906,800+(F-300) (3360A -1804) Graph II. Long-run cost by farm size. Revenue Variation in Farm Size $200 Horse 0 -200 Cost -400 -600 Tractor -800 -1000 0 75 150 225 Acres We find that these two functions equate at a farm size of 174 acres. In actual practice there would be a transition range that would be applicable. It does however give us a general range of farm size where using draft horses for traction power may at least be considered. Often in those communities using draft horses there is a high level of cooperation between farms, as all horses are not utilized all the time, the borrowing and lending of horses and equipment between neighbors and friends realize higher efficiencies. This would have the additional effect of reducing the number of horses needed for a given farm size. Variations in Labor and Fuel Rates; International Applications With the understanding that labor rates and fuel price fluctuate significantly with time and across geographical regions, it becomes necessary to challenge the relevant range of our model by substituting differing rates for fuel and labor. Page 5 of 8 pages Table 2. Effect of changes in labor and fuel rates. When: Price of diesel/gal. $0.50 $1.00 $2.00 and Price of labor/hr. $12.00 $6.00 $3.00 then Use horses up to 96 acres 174 acres 364 acres Discussion In the early 1900’s many farmers adopted the automobile and internal combustion technology for general transportation, but at the same time, they continued to use draft horses effectively for their farm traction for another fifty years. Did they understand the selective application of a given technology, perhaps? Later, after WWII, there was excess factory capacity available, and farm equipment manufacturers and the agricultural industry in general intensively promoted the sale and use of mechanical specialization, including tractors. Many of the equipment companies instituted sales policies of taking the work horses in as the down payment, with the total cost of the tractor obscured in the small monthly payment (7). The farmers soon began to expand their scale of production to pay for their investment. Let’s go back to the late 1940’s and 1950’s. According to our model the next decision point after purchasing the tractor is in ten years. By then the infrastructure, personnel, knowledge and ability to use horses effectively on the farm was gone from all but a few farms (8) . The existing stock of draft horses were largely liquidated and discarded (9). The stock of complimentary equipment had been customized for use with tractors. For the most part, the institutions of our agricultural society had limited the option to utilize draft horses for farm traction. In the subsequent 50 years since the 1950’s, what has happened? Farm machinery has increased significantly in price and specificity, so has the fuel, oil, filters, tires, batteries. Farm social dynamics have changed as well (10). With the little demand for working draft horses, the price is relatively inexpensive. At the same time over the past 50 years the threshold value of horses has increased. This has brought us to where we are today, to the point where the draft horse may, and perhaps should, be seriously considered as a choice of traction power for our smaller to medium farms. While the economics may support the use of horses, it appears that the economic factors are not all that play into the decision of farm traction power. A larger issue is that the decision to use horses on the farm may be institutionally dependent in personal and community values and moral choice. The education and the familiarity with working horses, as well as the supporting institutions necessary to competently work them in the field may not be accessible in our schools and communities. Equipment may be available by mail order, but if a problem arises or a breakdown happens at harvest time the delay may be critical. I note too, that many of the current generation of farmers are more familiar with the mechanical technology of the tractor than the understanding of animal husbandry dynamics and stewardship embodied in working a team of horses. There may be both, a challenge and opportunity because the practice is not common in our most of our communities. Summary While it is usually recognized that draft horses will alleviate a number of environmental issues such as soil compaction (11), pollution and reduce the off-farm inputs while adding to the soil fertility (12), the benefits are not solely ecological; there can be economic benefits as well. Horse traction power favors smaller farms. For the particular type of farm operation modeled, draft horses would be optimal at 74 acres and economically viable up to 174 acres of farm size. Page 6 of 8 pages The relative farm size where horse traction power is preferred is primarily dependent on utilizing the regenerative potential of the animals but is also dependent on wage and fuel rates. Especially in countries with low farm labor rates, and high fuel rates the use of animal power will likely be the best economic choice for all except large farms. The lack of ability to work horses in the field may have decreased the profitability of our small farms. Considerations There are other issues that may as significant as economics in the choice of traction power for the small farm. Personal values and the supportive institutions of a community may be important decision making criteria (13). International advisors in agriculture may want to be better acquainted with the application of animal traction power. We may error in recommending increased mechanical technology in some international applications. Educational programs in international development may benefit from expanding their program to include animal traction and tillage as part of their curriculum. This analysis does not address a number of highly significant issues with using draft horses. I simply mention them. To some there is an intrinsic joy and satisfaction of working with intelligent animals. Those who enjoy both farming and horses could integrate both to their benefit. Working with animals often facilitates community interaction and local markets. Additional possibilities to generate off-season work exist for farmers using draft horses such as horse logging, hay and sleigh rides, etc. There are many situations where labor savings can be realized from the utilization of the animal intelligence in work situations, such a feeding cattle during the winter season. This is a very broad area that needs to be addressed but is outside of the scope of the current discussion in this paper. If the time value of money is considered as part of the analysis it would alter the results of the analysis as follows: The basic assumptions are: there is no inflation or deflation. Debt financing will be used only on expenses over $1000, at a rate of 6% per annum for a period of ten years, and that any net revenue will be invested once each year earning interest at a rate of 3% until age 65. Investment tax credits will not apply. The horse-powered farm with farmer at age 65 would have net revenues of $42,984. 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