NON-TRADITIONAL APPROACH TO ASSESSMENT OF EFFICIENCY OF AGRICULTURAL PRODUCTION


  • Tatiana Dudoglo Comrat State University
Keywords: profitability, sales price, fixed and variable costs, profit, crop yield, cost of production, sales volume, Moldova.

Abstract

https://doi.org/10.22004/ag.econ.270286

The purpose of the study is to substantiate some features of planning and analysis of the efficiency of crop production based on the coefficient of advance of the threshold of profitability, as well as the development of practical recommendations for their direct use by specialists of agricultural enterprises (a case study from Moldova). It is emphasized that the indicators of the efficiency of products in agriculture, such as profit per one hectare of crop land or one centner of production, can be calculated precisely without requiring data for crop yield and total production volume of cultivated crops. It is established that the indicators of economic efficiency of produced and realized production depend on the degree of removal (deviation) of the actual yield from the break-even point (profitability threshold). An indicator named as the break-even excess coefficient is used for evaluating the given degree of deviation. An inter-relationship between the value of the break-even excess and the indicators of profit per one hectare of land and one centner of production is determined. The given interrelationship is presented in formulas, in a table and on a graph. Based on the example of a specific agricultural enterprise the calculations of given inter-relationships for leading crop types are performed. In order to identify whether the given inter-relation is specific for the conditions of agricultural production in a particular enterprise, the calculations of analogous indicators are made for two neighboring enterprises likewise. Besides, the inter-relationship between the financial safety margin and operational leverage on the one hand and the coefficient of exceeding the break-even level on the other hand is presented. Our research will allow the professionals at agricultural enterprises to determine the degree of revenues per one unit of area or unit of production as well the values of financial safety margin and operational leverage across of all product nomenclature based on the values of coefficient of exceeding the break-even level.

References

Список использованных источников

Присяжнюк М. В., Зубець М. В., Саблук П. Т. та ін. Аграрний сектор економіки України (стан і перспективи розвитку); за ред. М. В. Присяжнюка, М. В. Зубця, П. Т. Саблука, В. Я. Месель-Веселяка, М. М. Федорова. К.: ННЦ «ІАЕ», 2011. 1008 с.

Амбросов В. Я. Трансформационные процессы в аграрной сфере региона. Экономика Украины. 2003. № 8. С. 70–75.

Нечаев В., Тюпаков К., Сайфетдинова Н. Эффективность экономического и технико-технологического потенциала в растениеводстве. Экономика сельского хозяйства России. 2012. № 6. С. 70–84.

Шафронов А. Д. Оценка эффективности агропроизводства. АПК: экономика, управление. 2014. № 4. С. 61–69.

Акишин А. В. Повышать эффективность сельскохозяйственного производства Волгоградской области. АПК: экономика, управление. 2012. № 2. С. 60–63.

Stratan A. Estimarea potenţialului economical unităţii agricole. Revista economică. 2009. № 2(45). Pp. 188–195.

Timofti E. Еficienţa economică a producţiei agricole in condiţiile economiei concurenţiale (in baza materialelor unităţilor agricole ale Republicii Moldova): autoreferatul tezei de doctor habilitat in economie. Chişinău, 2009. 24 p.

Todorich L. P. Some problems of providing of economic stability of agricultural enterprises of Republic of Moldova. Vestnic. 2012. Vol. 11. Pp. 98–106.

Пармакли Д. М. Методика градации уровней урожайности и зон эффективности продукции растениеводства. АПК: экономика, управление. 2016. № 3. С. 86–91.

Пармакли Д. М., Тодорич Л. П., Дудогло Т. Д., Яниогло А. И. Эффективность землепользования: теория, методика, практика: монография. Комрат: Tipogr. «Centrografic», 2015. 274 с.

Ozkan B., Ceylan R. F., Kizilay H. A Review of Literature on Productive Efficiency in Agricultural Production. Journal of Applied Sciences Research. 2009. Vol. 5. No. 7. Pp. 796–801.

Froněk P., Jelínek L., Medonos T. The multicriterial evaluation of agricultural enterprises. Agricultural Economics. 2007. Vol. 53. Pp. 123–131. https://doi.org/10.17221/455-AGRICECON.

Novotná M., Volek T. Efficiency of Production Factors and Financial Performance of Agricultural Enterprises. AGRIS on-line Papers in Economics and Informatics. 2015. Vol. 7. No. 4. Pp. 91–99.

Lososová J., Zdeněk R. Key Factors Affecting the Profitability of Farms in the Czech Republic. AGRIS on-line Papers in Economics and Informatics. 2014. Vol. 6. No. 1. Pp. 21–36.

Kondratyuk N. Formation of sunflower production efficiency in the agricultural enterprises. Agricultural and Resource Economics: International Scientific E-Journal. 2015. Vol. 1. No. 1. Pp. 14–22. URL: www.are-journal.com.

Błażejczyk-Majka L., Kala R. On the combined estimation of technical efficiency and its application to agriculture. Agricultural Economics. 2015. Vol. 61. Pp. 441–449. https://doi.org/10.17221/72/2014-AGRICECON.

Fenyves V., Tarnóczi T., Zsidó K. Financial Performance Evaluation of Agricultural Enterprises with DEA Method. Procedia Economics and Finance. 2015. Vol. 32. Pp. 423–431. https://doi.org/10.1016/S2212-5671(15)01413-6.

Mugera A. W., Langemeier M. R., Ojede A. Contributions of Productivity and Relative Price Changes to Farm-level Profitability Change. American Journal of Agricultural Economics. 2016. Vol. 98. Is. 4. Pp. 1210–1229. https://doi.org/10.1093/ajae/aaw029.

Le Clech N. A., Fillat Castejón C. Productivity, efficiency and technical change in world agriculture: a färe-primont index approach. Documentos de Trabajo dt2017-09, Facultad de Ciencias Económicas y Empresariales, Universidad de Zaragoza. 2017. 39 p.

Molinos-Senante M., Maziotis A., Sala-Garrido R. Assessment of the Total Factor Productivity Change in the English and Welsh Water Industry: a Färe-Primont Productivity Index Approach. Water Resour Manage. 2017. Vol. 31. Is. 8. Pp. 2389–2405. https://doi.org/10.1007/s11269-016-1346-2.

Managing Agricultural Enterprises Exploring Profitability and Best Practice in Central Europe / ed. P. Bryła. Palgrave Macmillan, Cham, 2018. 297 p. https://doi.org/10.1007/978-3-319-59891-8.

Пармакли Д. М., Тодорич Л. П. Современный методический подход расчета рентабельности реализованной продукции. Вторая национальная научно-практическая конференция Комратского государственного университета, 2016. С. 174–179.

Пармакли Д. М., Дудогло Т. Д. Порог рентабельности как исходный показатель расчета эффективности реализованной продукции. Вторая национальная научно-практическая конференция Комратского государственного университета, 2016. С. 180–183.

References

Prysyazhnyuk, M. V., Zubets, M. V. and Sabluk, P. T. and other (2011), Ahrarnyy sector ekonomiky Ukrayiny (stan I perspektyvy rozvytku) [Agrarian sector of the economy of Ukraine (state and prospects of development)] eds. M. V. Prysiazhniuk, M. V. Zubets, P. T. Sabluk, V. Ya. Mesel-Veselyak, M. M. Fedorov. NSC IAE, Kyiv, Ukraine.

Ambrosov, V. (2003), Transformation processes in the agrarian sphere of the region. The economy of Ukraine, no. 8, pp. 70–75.

Nechayev, V., Tyupakov, K. and Sayfetdinova, N. (2012), Efficiency of economical,technical and technological potential in plant growing. Economics of Agriculture in Russia, no. 6, pp. 70–84.

Shafronov, A. D. (2014), Evaluation of the effectiveness of agricultural production. AIC: economy, management, no. 4, pp. 61–69.

Akishin, A. V. (2012), To increase the efficiency of agricultural production in the Volgograd Region. AIC: Economics, Management. no. 2, pp. 60–63.

Stratan, A. (2009), Estimarea potenţialului economical unităţii agricole. Revista economică, no. 2(45), pp. 188–195.

Timofti, E. (2009), The economic efficiency of agricultural production in the conditions of competitive economy (based on the materials of the agricultural units of the Republic of Moldova), Abstract of Dr. S. dissertation, Economics and Management (in the branch), Chisinau, Republic of Moldova.

Todorich, L. P. (2012), Some Problems of Providing Economic Stability of Agricultural Enterprises of the Republic of Moldova. Vestnic, vol. 11, pp. 98–106.

Parmakli, D. M. (2016), Methodology of gradationof yield levelsand zones of crop production efficiency. AIC: Economics, Management, no. 3, pp. 86–91.

Parmakli, D. M., Todorich, L. P., Dudoglo, T. D. and Ianioglo, A. I. (2015), Jeffektivnost' zemlepol'zovanija: teorija, metodika, praktika [The effectiveness of land use: theory, methodology, practice], tipogr. «Centrografic», Comrat, Republic of Moldova.

Ozkan, B., Ceylan, R. F. and Kizilay, H. A (2009), Review of Literature on Productive Efficiency in Agricultural Production. Journal of Applied Sciences Research, vol. 5, no. 7, pp. 796–801.

Froněk, P., Jelínek, L. and Medonos, T. (2007), The multicriterial evaluation of agricultural enterprises. Agricultural Economics, vol. 53, pp. 123–131. https://doi.org/10.17221/455-AGRICECON.

Novotná, M. and Volek, T. (2015), Efficiency of Production Factors and Financial Performance of Agricultural Enterprises. AGRIS on-line Papers in Economics and Informatics, vol. 7, no. 4, pp. 91–99.

Lososová, J. and Zdeněk, R. (2014), Key Factors Affecting the Profitability of Farms in the Czech Republic. AGRIS on-line Papers in Economics and Informatics, vol. 6, no. 1, pp. 21–36.

Kondratyuk, N. (2015), Formation of sunflower production efficiency in the agricultural enterprises. Agricultural and Resource Economics: International Scientific E-Journal, [Online], vol. 1, no. 1, available at: www.are-journal.com.

Błażejczyk-Majka, L. and Kala, R. (2015), On the combined estimation of technical efficiency and its application to agriculture. Agricultural Economics, vol. 61, pp. 441–449. https://doi.org/10.17221/72/2014-AGRICECON.

Fenyves, V., Tarnóczi, T. and Zsidó, K. (2015), Financial Performance Evaluation of Agricultural Enterprises with DEA Method. Procedia Economics and Finance, vol. 32, pp. 423–431. https://doi.org/10.1016/S2212-5671(15)01413-6.

Mugera, A. W., Langemeier, M. R. and Ojede, A. (2016), Contributions of Productivity and Relative Price Changes to Farm-level Profitability Change. American Journal of Agricultural Economics, vol. 98, is. 4, pp. 1210–1229. https://doi.org/10.1093/ajae/aaw029.

Le Clech, N. A. and Fillat Castejón, C. (2017), Productivity, efficiency and technical change in world agriculture: a färe-primont index approach. Documentos de Trabajo dt2017-09, Facultad de Ciencias Económicas y Empresariales, Universidad de Zaragoza, Spain.

Molinos-Senante, M., Maziotis, A. and Sala-Garrido, R. (2017), Assessment of the Total Factor Productivity Change in the English and Welsh Water Industry: a Färe-Primont Productivity Index Approach. Water Resour Manage, vol. 31, is. 8, pp. 2389–2405. https://doi.org/10.1007/s11269-016-1346-2.

Bryła, P. ed. (2018), Managing Agricultural Enterprises Exploring Profitability and Best Practice in Central Europe. Palgrave Macmillan, Cham, UK. https://doi.org/10.1007/978-3-319-59891-8.

Parmakli, D. M. and Todorich L. P. (2016), Sovremenniyy metodicheskiy podhod raschet rentabil’nosti realizovanтoy produktsi [Modern methodical approach to calculation of rentability of sold products]. The second national scientific and practical conference at Comrat State University, November, pp. 174–179.

Parmakli, D. M. and Dudoglo, T. D. (2016), Porog rentabel'nosti kak iskhodnyy pokazatel' rascheta effektivnosti realizovannoy produktsii [Profitability threshold as an initial indicator of efficiency calculation of sold products]. The second national scientific and practical conference at Comrat State University, November, pp. 180–183.

Published
2018-03-20
How to Cite
Dudoglo, T. (2018). NON-TRADITIONAL APPROACH TO ASSESSMENT OF EFFICIENCY OF AGRICULTURAL PRODUCTION. Agricultural and Resource Economics: International Scientific E-Journal, 4(1), 60-76. Retrieved from https://are-journal.com/are/article/view/153
Section
Articles