Profitability Analysis of Selected Farms in the Batinah Region of Oman

Slim Zekri, Fahad A. Al Said, Iqrar A. Khan


The agricultural sector of Oman represents less than 2% of the total GDP and uses 88% of the fresh water. Several decision makers are questioning whether the agricultural activity in the Sultanate of Oman can be sustained and if so what type of crops should be encouraged. More than 53% of the agricultural cropped area is situated in the Batinah coastal area where farming is exclusively based on groundwater pumping. A sample of 49 market-oriented farms from the Batinah region was surveyed during 2006. Four types of farms were considered. Results showed that the most profitable farms are mixing fodder crops and vegetables with a net margin of 1,412 RO/ha/year. The less profitable farms are based on tree crops and vegetables with a net margin of 847 RO/ha/year. For vegetables the most profitable crop is tomato with an average net margin of 2,580 RO/ha/year with a standard deviation of 2,043 RO/ha/year and the least profitable crop is cabbage with 113 RO/ha/ year with a standard deviation of 182 RO/ha/year. The net margin of crops grown under drip irrigation is higher than that for crops under furrow irrigation, with a difference of 548 RO/ha/year. Farms equipped with such modern irrigation systems tend to irrigate almost the same area in winter as in summer, while farms under furrow irrigation crop less than one percent of their cropped area during summer compared to winter. Consequently and contrary to expectations, modern irrigation systems tend to increase, rather than reduce, groundwater pumping given the financial incentives for farmers to grow summer vegetables instead of only winter vegetables. Even so, the net water use efficiency is greater for vegetable production under drip irrigation than it is for fodder production. The figures show that, on average, farming in the Batinah is financially profitable for the types of farm considered in this study. However, profitability varies widely between different farms and crops. The reasons for these differences are technical, as observed in the big differences in yield among crops, and economic because the prices received by farmers differ significantly.



Vegetables, Oman, salinity, irrigation, fodder crops, yields, profitability.

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