Economic evaluation of liming and phosphate fertilization in alfalfa on the highlands of Santa Catarina State, Brazil

Abstract

Economic evaluation of liming and phosphate fertilization in alfalfa (Medicago sativa L.) was realized based on a trial carried out in acid soils with low phosphorus availability on the highlands of Santa Catarina State, Brazil. A linear programming model was developed to find the optimum strategy of liming and phosphate fertilization which maximizes the net present value according to different production levels in a six year period. The results showed the economic viability of producing alfalfa in this soil type, considering the high investment ratios and net present values obtained. However, due to high liming costs (which occur only in the first year), the cummulative net revenue only starts to be positive in the third year, involving a high financial risk related to the investment. Sensitivity analysis studied the influence on the technical and economic results as a function of variations in yields as well as prices. Finally, risk analysis indicated the liming and phosphorus fertilization strategy related to the 90% production level as the least risky.