A cost comparison between mechanisation and manual labour in a privately-owned forestry farm

MBA, North-West University, Potchefstroom Campus, 2018Globally the world has mechanized most industries. South Africa still trails most developed countries but is currently progressing into a 4th generation of mechanization. In particular, the agricultural sector should investigate the possible advantages to be obtained by mechanisation. Large technological advancements in the forestry harvesting process have been developed over the last 2 decades internationally. This technological advancements however comes at high cost as most of the machines are imported and are costly to operate. Small scale forestry farmers need to keep up to date and check whether it will be feasible for them to implement such advancements. Failure to keep up with technological advancement may lead to small scale farmers becoming uncompetitive and priced out of the market. This research study aims to investigate the feasibility of implementing the mechanical tree harvesting process compared to the traditional manual labour process, for the small scale forestry farmer in the harvesting of eucalyptus trees. This study includes 5 case studies of forestry farmers on the Highveld area of Mpumalanga. Information for each case study was obtained via oral interviews. The cost involved in mechanical harvesting was obtained from literature and adapted to suit the purpose of this study. The cost for manual labour harvesting was developed by analysing the literature as well as from interviews conducted with manual tree harvesting companies and experts in the field. This study revealed that for one of the cases it would be advisable to mechanise the harvesting process of the eucalyptus trees. For the other cases it was recommended not to mechanise the process as the costs of manual labour was significantly less compared to the cases that will benefit from mechanisation. On average the manual labour harvesting method was R16.52 per ton less than for the mechanical process. However if one takes into consideration the minimum wage increase to be implemented in 2018 in South Africa and assuming that all other costs remains constant, then things changed dramatically. The increase in minimum wage will result in the mechanisation process being more profitable and an average saving of R4.05 as compared to manual labour.Master