The Moderate Operation Scales of Apples Based on Output, Profit, and Unit Production Costs in the Shaanxi Province of China

Congying Zhang, Qian Chang, Liqun Shao and Xuexi Huo
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Congying Zhang: College of Economics and Management, Northwest A&F University, Yangling 712100, China
Qian Chang: College of Economics and Management, Northwest A&F University, Yangling 712100, China
Liqun Shao: College of Economics and Management, Northwest A&F University, Yangling 712100, China
Xuexi Huo: College of Economics and Management, Northwest A&F University, Yangling 712100, China

Land, 2020, vol. 9, issue 1, 1-17

Abstract: In the Shaanxi province, small and scattered plots impede an increase in the efficiency of apple production. Developing a moderate operation scale is a proper tool to solve inefficiencies in apple production, as it enables improving the factor allocation efficiency, resulting in higher yields, higher profit, or lower production costs. However, the moderate operation scales, based on output, profit, and production costs, may be different. This paper aimed to evaluate the moderate operation scale of apples from three perspectives of increasing yields and profits and reducing unit production cost. The study was based on survey data collected from 661 randomly selected apple farmers in eight counties of the Shaanxi province, China. The collected data were analyzed quantitatively by the input-output model, the net profit model, and unit production cost model. The findings show that: (1) The moderate operation scale oriented to increasing apple yields in the Shaanxi province should be 0.87–1.53 ha. (2) The moderate operation scale oriented to increasing the net profit of farmers in the Shaanxi province should be over 1.53 ha. (3) The moderate operation scale oriented to reducing the unit cost of apple production in the Shaanxi province should be 0.20–0.53 ha. The study provides evidence that policymakers should grasp the balance point and find the intersection of the operation scale based on output, profit, and unit production cost when guiding apple growers to carry out the moderate scale. We propose that 0.87–1.53 ha may be a suitable operation scale for apple production in the Shaanxi province at the current stage.

Keywords: input−out model; net profit model; unit production cost model; land fragmentation; apple growers (search for similar items in EconPapers)
JEL-codes: Q15 Q2 Q24 Q28 Q5 R14 R52 (search for similar items in EconPapers)
Date: 2020
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