Labour costs are an issue in agriculture in a developing country too

Labour cost in Papua New Guinea (PNG) is an important factor that is usually ignored by smallholder farmers in calculating the general cost of production. Typically, most labour in the villages of smallholder farmers is through family labour. A production costs survey was done in order to determine labour and other costs for smallholder farmers in producing vegetables. On site surveys were conducted with forms filled by the farmers from project sites. The study was conducted over three cropping seasons in Rigo, Central Province. Twenty active vegetable farmers were involved in the study. Usually, labour on smallholder farms in PNG is unpaid. The study identified that production costs are important in smallholder farming. Unit production cost of vegetables were between PNGK0.50 and K12.00. The labour cost for the crops surveyed varied slightly from crop to crop, and ranged from K2.00 to K6.00 per kg of (watermelon, Capsicum, Tomato and French bean). Labour costs are relatively high, and if fully recovered in the market would place PNG vegetables at a competitive disadvantage. Variable costs and fixed cost were also determined, allowing target (breakeven) prices to be calculated, and thus whether an offered price is acceptable to be determined. Farming, inevitably, will become increasingly competitive, and knowing the cost of production is an important tool in planning, forecasting, and decision-making in farming.