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CALCULATING THE COST OF MECHANISATION
Johan Truter, Agricultural economist, VinPro (SA) Consultation service
According to the Oxford English Dictionary mechanisation means "to substitute mechanical power for man or horse power". In the wine industry mechanisation also takes place to create favourable conditions for quality improvement which is often the motivation for the decision to mechanise, rather than the replacement of human or animal power per se.
1 How mechanisation costs are composed
The costs involved in ownership and use of machinery can be divided into two categories, namely Fixed Costs and Variable Costs. Fixed costs (insurance, devaluation, licence, interest, etcetera) go hand in hand with ownership of machinery and occur whether the machine is being used or not. Fixed cost per hour of utilisation is inversely proportional to the total annual utilisation, in other words, the less the machine is being used, the higher the cost per hour and vice versa.
Variable costs are directly related to the degree of utilisation of the machine and include factors such as repairwork and maintenance, fuel and lubrication.
2 What influences the cost of mechanisation?
Mechanisation cost is determined mainly by the following factors:
Purchase price of the implement
Annual utilisation of the implement
Life-span of the implement
Method of financing and interest rate applicable if the implement is purchased with other than own capital
Repair and maintenance cost
Besides the above factors, there are certain additional factors which influence the cost of mechanisation in some way or another. The following are examples:
Speed at which the implement works
Number of rows which the implement can serve simultaneously
Length of the rows
Terrain over which the implement has to move
Expertise of the operator
Standing and turning time
3 How is cost expressed?
Cost is usually expressed per hour or per kilometre. Cost per hour is based on a standard hour of sixty minutes and not on tractor hours, which usually differ from the standard hour due to varying engine speeds.
In order to determine cost per hectare using the figures in the Guide to Machinery Costs (per hour), the following formula may be used:
(R/hour) / (ha/hour) = R / ha
Example: liming at 4 ha / 10 hours
i.e. 0,4 ha / hour
cost per hour = R8
Rand per hectare = R8 / 0,4 = R20 / ha
4 What does mechanisation cost?
From the factors influencing mechanisation it is clear that the cost of mechanisation differs from case to case and from farm to farm. An invaluable publication when quantifying mechanisation cost is Guide to Machinery Costs issued by the National Department of Agriculture, Directorate Communication and compiled by Mentz, Müller, Hartzenberg and Hill. The costs involved in running trucks, tractors, trailors, blowers, etcetera are indicated. The guide is updated annually with the latest information and is available from:
The Director, Directorate Communication,
Private Bag X144,
Pretoria,
0001
The following cases may serve as examples of cost per hour for certain machines and implements:
Machine/Implement; Total cost
48 kW two wheel driven tractor (high revolutions)
48 kW four wheel driven tractor (high revolutions)
800 litre blower (tow model)
1,8 metre three point disc
1 ton 3 litre petrol two wheel driven bakkie (short wheel base)
1 ton 3 litre diesel two wheel driven bakkie (short wheel base)
1 ton 3 litre petrol double cab two wheel driven bakkie (short wheel base)
1 ton 3 litre diesel double cab two wheel driven bakkie (short wheel base)
1 ton 3 litre petrol double cab four wheel driven bakkie (short wheel base)
1 ton 3 litre diesel double cab four wheel driven bakkie (short wheel base)
3 ton single axel truck
8 ton single axel truck
* Cost based on Guide to Machinery Costs, May 1998
Specialised machinery, such as grape harvesting machines, are not included in the guide, however. Experience has also shown that mechanical harvesters are bought for various reasons and not necessarily to replace human labour. With big differences in the machines' capacity, purchase prices and annual utilisation, it is necessary to do such calculations per machine or per specific situation. The same applies to mechanised topping or pruning machines for example. Should you be interested in such calculations (still using the Guide to Machinery Costs as a guideline), contact Johan Truter (021) 807 3043 or Paiter Botha (021) 807 3302.
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