COMPARISON OF THE PROFITABILITY OF FRUIT PRODUCTION FOR FARMS – BELONGING AND NOT BELONGING TO PRODUCER ORGANIZATIONS

Piotr Brzozowski () and Krzysztof Zmarlicki Zmarlicki ()
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Piotr Brzozowski: Research Institute of Horticulture, Skierniewice, Poland
Krzysztof Zmarlicki Zmarlicki: Research Institute of Horticulture, Skierniewice, Poland

JOURNAL STUDIA UNIVERSITATIS BABES-BOLYAI NEGOTIA, 2013

Abstract: In order to respond to modern market demands and stringent fiscal and labour rules, the nowadays farms are shifting more and more to small enterprises. At the present days the supermarkets chains are the main sales channel with still increasing rule, so only farms organized in bigger production and sales units gain the possibility to act as an equal partner for them. The research was carried out in Poland on thirty commercial fruit farms mostly with apple production in the years 2012-2013. Owners of sixteen farms were members of Producer Organizations (POs) and fourteen farms were owned by non-members. All data necessary for the calculation of the costs and profitability were obtained from producers who answered special questionnaires and participated in additional interviews. By calculating the profitability of the farms the subsidies belonged to POs were not directly taken into the account, because they go to the organization not to a single producer. Fruit growers in Poland, members of producer organizations have many economic benefits over their non-PO-members competitors. Accordingly to inquiry done during the investigation the most important advantage is to sale greater quantities of fruit at lower unit costs due to maintaining shared (mutually owned) storages, grading and packaging facilities. The others most important are reduced economical risk and lower transaction costs. The achieved unit price was on average 21.5% lower in the case of the members of PO’s, and the unit costs were on average 29.5% lower than those ones for individual farms. Then the total income of farm was taken into account the POs were unquestioned winners, with bigger value of market output per farm and higher net income per farm. The average individual farm selling fruits on its own had lower total net income per farm and smaller market output. The owners of individual farms also spend much more time to sell their fruit. By joining the cooperative farmers could increase their sale of fruit and save the time they otherwise spend for selling them individually. The members of POs have more time for better production practices which are very important for the quality ofproduced fruit.

Keywords: profitability; fruit; farms; PO’s (search for similar items in EconPapers)
JEL-codes: O13 Q15 (search for similar items in EconPapers)
Date: 2013
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http://tbs.ubbcluj.ro/RePEc/bbn/journl/Negotia_4_2013.pdf Revised version, 2013 (application/pdf)

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