Document Type : Original Article

Authors

1 Ph.D. student in Agricultural Economics, Payame Noor University, Tehran Iran

2 Associate Professor of Agricultural Economics, Department of Agricultural Payame Noor University, Tehran Iran

3 PhD Graduate in Agricultural Economics, Payame Noor University, Tehran Iran

Abstract

The present study aimed at investigating the production costs and economic benefits of the potato production in Ardabil country, Iran. To do so, 183 potato producers were randomly selected and were asked to present their ideas concerning the production costs and benefits through a questionnaire and an interview. A field study was also taken into consideration to enrich the data. The collected data were analyzed through measures of Chi-square, Wald test, and Translog cost function. The results revealed that the cost function structure was non-hemotetic with respect to the Chi-square statistics (36.8) and results of the constant non-returns and non-homogeneous Wald test to the scale’s F- statistics (17.04) were non-cobb Douglas. Allen cross replacement relationship was positive for the dichotomies such as workforce and machinery, machine and seed, workforce and seed, workforce and water, and finally seed and water. However, it was negative for machinery and land inputs, machinery and water, land and machinery, land and labor force, land and seeds, and land and water. The calculated cost elasticity was -1.5044 which indicated a decrease in the average costs for an output increase as the production cost was found in the downstream part of the cost curve. The economies of scale of 2.504 indicated a 2.5 percent increase in the yield for one-percent increase in the cost. 

Graphical Abstract

Analysis of the Structure and Savings of the Potato Production Scale Using the Translog Cost Function (Ardabil County)

Highlights

  • The highest cost was related to seed input and the lowest was related to water input.
  • There are economies of scale in potato production in Ardabil and according to the number obtained in the research, for a 1-percent increase in production costs, more than two and a half percent is added to the amount of product and output.
  •  larger crop units are more efficient than smaller crop units.
  •   Since the research results showed that the oblique result of the change in scale is positive for labor input, the use of large-scale cultivation of this crop will lead to more job development and reduce the unemployment rate in the research area.

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Main Subjects