Economic Analysis of Costs of Production of Olive Oil in Al-Mafraq Governorate (Irrigated Farming)

Mohmoud A. Hindi

الملخص


The main objective of this study was the descriptive economic and econometric analysis of costs of production of olive oil in Al-Mafraq Governorate (irrigated farming). Also, this study aimed at determining the economically efficient size and the profit maximizing size.

Farms that are irrigated through artesian wells in Al-Mafraq Governorate were divided into five acreage categories. Through the descriptive economic analysis of costs of production of olive oil it was shown that the highest average cost of production of one dunum in Al-Mafraq Governorate was (142.1) JDs, and the lowest average cost of production of one dunum was (76) JDs. From the analysis of costs and returns, the results indicated that the highest net return (profit) in Al-Mafraq Governorate was (127) JDs/dunum, and the lowest net return (profit) was (42) JDs/dunum. Also, the results of the descriptive economic analysis indicated that the lowest average cost of production of 1 kg of oil was (1.12) JDs and the highest average cost of production of 1 kg of oil was (2.32) JDs.

Using the econometric models of cost functions, the economically efficient size and the profit maximizing size were computed and determined for each category. Category # 5 in Al-Mafraq Governorate was the best and the economically efficient size is (31462) kg and the profit maximizing size is (35406) kg. However, the actual practices of farmers are too far from the sizes of the econometric analysis. The results also indicated that the economically efficient acreage size was (458) dunums for category # 5 which was not far from the actual acreage of this category in Al-Mafraq Governorate.


الكلمات المفتاحية


Descriptive Economic Analysis, Econometric Analysis, Costs of Production, Olive Oil, Irrigated Farming, Al-Mafraq Governorate in Jordan.

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