Production risks in Bulgarian peanut production

Carel Ligeon, Curtis M. Jolly, Nelly Bencheva, Stanko Delikostadinov and Naveen Puppala

Agricultural Economics Review, 2009, vol. 09, issue 01, 8

Abstract: As farmers in a transition economy search for new crop enterprises with a potential for income enhancement they are faced with increased risks in the process of resource allocation. It has been noted that biased estimation of production function estimates results from the lack of accountability of risks. Since peanut production in Bulgaria has increased at a varying rate since 1989 it is important that we examine the risks associated with input use. The data for this study were collected from farmers from 18 villages in the southern part of Bulgaria. A total of 205 farmers were surveyed for this study. Peanut yield in Bulgaria is positively related to the quantity of seed used, fungicide, manual labor, investment level and mechanized labor used. Peanut yield is negatively influenced by investment levels but positively by the increase of manual labor. The response of yield to quantity of seed used is elastic, and an addition of a kg of peanut seeds may increase yield by 32kg. However, as the quantity of seeds used per ha increases the risk is expected to increase, hence farmers may be cautious in increasing the quantity of seeds used. Investment capital, manual labor and mechanized labor are positively related to yield and there will be a reduction in yield if the optimal levels of those inputs are surpassed. Thus farmers may increase yield and production by augmenting the seeding rate, other factors remaining constant.

Keywords: Agricultural; and; Food; Policy (search for similar items in EconPapers)
Date: 2009
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aergaa:93807

DOI: 10.22004/ag.econ.93807

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