Olive production in Northern Iran: physical and comparative advantages analysis

Mohammadi, Parvaneh; Kavoosi-Kalashami, Mohammad; Zanganeh, Morteza

doi:10.1590/0103-8478cr20190322

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CROP PRODUCTION • Cienc. Rural 49 (11) • 2019 • https://doi.org/10.1590/0103-8478cr20190322 copy

Olive production in Northern Iran: physical and comparative advantages analysis

Produção olivícola no Norte do Irã: vantagem de análise física e comparativa

Authorship SCIMAGO INSTITUTIONS RANKINGS

ABSTRACT:

Olive is one of the strategic products of Guilan province, northern Iran. Hence, it is very important to determine the optimal production pattern of olive, given the resources scarcity and the assessment of physical and Comparative Advantage (CA). In this study, three physical advantage indices for olive production in Guilan province during 2008-2016 were investigated. Also, the CA, protection and competitiveness indicators of olive production at Guilan province for 2016-17 cultivation years were calculated using the Policy Analysis Matrix (PAM). Results showed that Guilan province had scale advantage in olive production. The highest degree of olive plantation concentration was on 2008 with scale advantage index of 2.49. Also, results of efficiency advantage showed that, except for 2008, olive production had efficiency advantage over all under study years at Guilan province. Results of Domestic Resource Costs (DRC) and Social Cost Benefit ratio (SCB) indicators for both traditional and commercial olive plantations revealed the CA of olive production in Guilan province. Also, the competitiveness indices values (UCd and UCx) for both traditional and commercial olive plantations were less than 1. So, the olive production systems in Guilan province had the ability to compete with domestic and international competitors.

Key words:
comparative advantages; competitiveness; protections; olive; Iran

Universidade Federal de Santa Maria Universidade Federal de Santa Maria, Centro de Ciências Rurais , 97105-900 Santa Maria RS Brazil , Tel.: +55 55 3220-8698 , Fax: +55 55 3220-8695 - Santa Maria - RS - Brazil
E-mail: cienciarural@mail.ufsm.br

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[1] E-mail: mkavoosi@guilan.ac.ir. ^*Corresponding author.

Items	Revenue	Costs of Tradable inputs	Costs of domestic Inputs	Profit
Private price	A	B	C	D
Social price	E	F	G	H
Policy effect	I	J	K	L

Type	Indicator	Description	Equation	Interpretation
CA (Comparative Advantage)	DRC	Domestic resource cost	$DRC = G / (E - F)$	DRC < 1 shows CA
	SCB	Social cost benefit	$SCB = (F + G) / E$	SCB < 1 shows CA
	NSP	Net social profit	$NSP = (E - F - G)$	NSP > 0 shows CA
Protection	NPCI	Nominal protection coefficient on inputs	$NPCI = B / F$	NPCI > 1 shows protection
	NPCO	Nominal protection coefficient on outputs	$NPCO = A / E$	NPCO > 1 shows protection
	EPC	Effective protection coefficient	$EPC = (A - B) / (E - F)$	EPC > 1 shows protection
Subsidy	SRP	Subsidy ratio to producers	$SRP = L / E$	-
Competitiveness	PC	Profitability coefficient	$PC = D / H$	-
	PCR	Private cost ratio	$PCR = C / (A - B)$	PCR < 1 shows competitiveness
	UC_d	Domestic unit cost	${UC}_{d} = (B + C) / A$	UC _d < 1 shows competitiveness
	UC_x	Export unit cost	${UC}_{X} = (B + C) / E$	UC _X < 1 shows competitiveness

Inputs Type	Input	Commercial plantation	Traditional plantation
Tradable	Ammonium sulfate (kg)	240	80
	Triple super triphosphate (Kg)	120	40
	Potassium sulfate (Kg)	240	80
	Zinc sulfate (l)	0.5	0.17
	Boric acid (l)	0.5	0.17
	Wool oil (l)	20	-
	Toxin diazinon (l)	4	-
Non-tradable	Machines (h)	1	1
	Labor force (n day)	41	41
	Water (cubic meter)	1800	1800
	Animal fertilizer (kg)	3600	3600
	Land (ha)	1	1
	Seedlings (seedlings)	240	240

Items	Type	Revenue	Tradable inputs costs	Domestic inputs costs	Profit
Private price	Traditional	18	0.47	10	7.53
	Commercial	30	1.57	10	18.43
Social price	Traditional	21	2.29	10.30	8.41
	Commercial	35	7.49	10.30	17.21
Policy Effect	Traditional	-3	-1.82	-0.3	-0.81
	Commercial	-5	-5.92	-0.3	1.22

Type	Indicators	Traditional	Commercial
CA	DRC	0.55	0.37
	SCB	0.60	0.51
	NSP (million IRR(	8.41	17.21
Protection	NPCI	0.21	0.21
	NPCO	0.86	0.86
	EPC	0.94	1.03
Subsidy	SRP	-0.04	0.04
Competitiveness	PC	0.89	1.10
	PCR	0.57	0.35
	UC_d	0.58	0.39
	UC_x	0.50	0.33