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Cost-benefit analyses of the adoption of irrigation on oranges in São Paulo, Brazil

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  • Rossi, Fabiana Ribeiro
  • Silva, Felipe de Figueiredo
  • Perrin, Richard K.
  • Fulginiti, Lilyan E.
  • Souza Filho, Hildo Meirelles de
  • Carrer, Marcelo Jose

Abstract

Brazil contributes 55% and 60% of the world’s production of fresh oranges and orange juice, respectively. In recent years, increasing production costs and low orange prices reduced the citrus producers’ profitability. In this paper we investigate the potential for irrigation to improve the profitability of orange production, using data from a sample of 98 citrus producers in the state of Sao Paulo, 34 of whom had adopted irrigation. Based on a translog production function, we use 3SLS to estimate a system of equations comprising the production function and the inverse derived demands for inputs, to obtain the impact of irrigation adoption on productivity. Results show that adopting irrigation increases citrus production by 19%. We estimate production elasticities of capital (.16), labor (.21), land (.26) and fertilizers (.20). We found that by considering yield increases versus both fixed and variable costs of implementation, farmers could expect to break even by the fifth year of irrigation use

Suggested Citation

  • Rossi, Fabiana Ribeiro & Silva, Felipe de Figueiredo & Perrin, Richard K. & Fulginiti, Lilyan E. & Souza Filho, Hildo Meirelles de & Carrer, Marcelo Jose, 2016. "Cost-benefit analyses of the adoption of irrigation on oranges in São Paulo, Brazil," 2016 Annual Meeting, February 6-9, 2016, San Antonio, Texas 230112, Southern Agricultural Economics Association.
    • Handle: RePEc:ags:saea16:230112
    DOI: 10.22004/ag.econ.230112
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    References listed on IDEAS

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    1. Sébastien Foudi & Katrin Erdlenbruch, 2012. "The role of irrigation in farmers’ risk management strategies in France," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 39(3), pages 439-457, July.
    2. Morris, Robert A. & Muraro, Ronald P. & Spreen, Thomas H., 2008. "Invasive Diseases and Fruit Tree Production: Economic Tradeoffs of Citrus Greening Control on Florida's Citrus Industry," 2008 Annual Meeting, February 2-6, 2008, Dallas, Texas 6309, Southern Agricultural Economics Association.
    3. Chambers,Robert G., 1988. "Applied Production Analysis," Cambridge Books, Cambridge University Press, number 9780521314275, September.
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    Keywords

    Agribusiness; Agricultural Finance; Farm Management; Financial Economics; Production Economics;
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