Costo de Oportunidad de la Tierra en la Competitividad de la Ganadería Bovina de Exportación en Uruguay

Catalina Rava, Bruno Ferraro and Bruno A. Lanfranco

Economi­a Agraria (Revista Economia Agraria), 2013, vol. 17, 13

Abstract: This article analyzed the weight of land in the economic performance of the primary livestock production sector, using the policy analysis matrix (PAM). The financial cost of the assets immobilized with the land factor was considered through its opportunity cost (OC). The study considered four alternatives to measure the OC: (a) a unique value given by a low-risk interest rate; (b) differential value, using rent value for the land exploited in such regime and a low-risk interest rate for the land owned by the producer; (c) differential value, using the same average value of rent for the land exploited in the scheme and zero-rate for the rest of the land; (d) unique zero-rate value for the whole land. The results suggest that, in general, Uruguayan livestock producers do not consider a OC for the land when assessing the profitability of their activity. For them, the land is a long-term safe investment, devoid of risk. In order to capture the true rationality of the livestock producer it would be advisable to consider the OC only when the producer actually leases the land and pays a rent. In principle, for owned land, it would be better considering a zero rate OC.

Keywords: Agricultural Finance; Demand and Price Analysis (search for similar items in EconPapers)
Date: 2013
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Persistent link: https://EconPapers.repec.org/RePEc:ags:eaaeac:169569

DOI: 10.22004/ag.econ.169569

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