Research Article

Economic Analysis of Plum Production in Izmir Province, Turkey

Kubilay Ucar1, Görkem Oruk2 and Sait Engindeniz1*

1Ege University Faculty of Agriculture Department of Agricultural Economics, 35100 Bornova-Izmir, Turkey; 2Siirt University Faculty of Agriculture Department of Agricultural Economics, 56100, Siirt, Turkey.

Received | March 17, 2021; Accepted | Jue 21, 2021; Published | January 31, 2022

*Correspondence | Sait Engindeniz, Ege University Faculty of Agriculture Department of Agricultural Economics, 35100 Bornova-Izmir, Turkey; Email: [email protected]

Citation | Ucar, K., G. Oruk and S. Engindeniz. 2022. Economic analysis of plum production in Izmir Province, Turkey. Sarhad Journal of Agriculture, 38(2): 409-416.

DOI | https://dx.doi.org/10.17582/journal.sja/2022/38.2.409.416

Keywords | Plum, Production economics, Cost analysis, Net profit

Introduction

Fruits are widely cultivated by producers worldwide due to their contribution to human nutrition and their economic value. Plum, which is an important member of stone fruit variety, is grown in a wide geography in the world. Plum is considered to contain plenty of B-vitamins, as well as rich in potassium and magnesium minerals. It also contains a rich variety of vitamins (A, B1, B2, B3, B6, C and E) (Tunalioglu and Keskin, 2004; Baran et al., 2017a).

According to FAO’s 2018 data, 5.6 million hectares of plums were produced in the world and 3.9 million tons of plums were obtained in this field. In the period of 2009-2018, world plum production area increased by 7.29% and plum production increased by 17.11%. Countries that are important in plum production and their share in production are China (53.84%), Romania (6.68%), Serbia (3.41%), the United States (3.11%) and India (2.15%) (FAO, 2019).

Plum ranks third in the world in stone fruit production after olives and peaches. In Turkey, plum production comes after olive, apricot, peach, cherry and cherry production. In 2018, Turkey provides 2.35% share of world production to 296,878 tons of plum production. Turkey has carried 68,140 tons of plum exports of US$ 22.1 million in 2018 (FAO, 2019). According to TURKSTAT data for 2019; 317,946 tons of plums are provided from 8.82 million plum trees in Turkey. Leading plum production regions are the Mediterranean Region, the Aegean region, the Marmara Region and the Central Anatolia Region. Mersin (19.56%), Bursa (8.80%), Adana (5.29%), Izmir (4.84 %), Antalya (4.76%) and Manisa (4.31%) which are important provinces for plum production (TURKSTAT, 2020).

Plum cultivars grown in Turkey, generally belong to Prunus cerasifera Ehrh., Prunus domestica L., Prunus institia L., Prunus spinosa L., Prunus divaricata Led., Prunus salisina Lindl (Gunes, 2003). Some important varieties grown in various regions of Turkey are: green plums cultivars (Papaz, Can, Havran, Aynali), Japanese plums cultivars (Formasa, Climax, Santa Rosa), and European plums cultivars (Stanley, President, Sugar, Giant) (MoNE, 2011).

Plum production in Turkey is generally realized in mixed gardens with other fruits. Especially in recent years, as a result of the fact that the plum has found a level of value to satisfy the producer and the results of the research on the plum have been transferred to practice, the number of closed plum orchards based on early and late plum varieties is increasing rapidly. The increase in demand for plum saplings is an indicator of this. However, it cannot be said that the potential is fully utilized in plum exports. Thanks to the climate zone it is in and the ecological differences it has, Turkey allows the cultivation of many plum species and varieties. To prolong the export season with the production of early and late varieties, especially by using altitude differences, iIt is possible to have a say in world markets (Karamursel et al., 2007).

In Turkey, several researches have been conducted on economic analysis of different fruits. For example, studies have been conducted on economic analysis of apple (Demircan et al., 2005); fig (Yercan and Engindeniz, 2003); cherry (Akcay and Uzunoz, 2006); peach (Engindeniz and Cukur, 2003; Uzunoz and Akcay, 2009); pomegranate (Ozalp and Yilmaz, 2013); grape (Kizilaslan and Elmali, 2012); apple (Akdemir et al., 2012); pear (Aydin et al., 2017); apricot (Ucar et al., 2017). On the other hand, several studies have been published on economic analysis of plum production in the world (Ward and Faris, 1968; Stankovic, 1978; Karić and Ćejvanović, 2004; Vávra et al., 2006; Knutsen and Haukås, 2007; Milošević et al., 2008; Tabatabaie et al., 2012; Tshabalala, 2015; Day et al., 2016; Majid et al., 2018; Cross et al., 2019). However, limited number of studies have been done on the cost and profitability analysis of plum production in Turkey (Karamursel et al., 2007; Karamursel, 2010; Buyukarikan and Gul, 2016; Balcı et al., 2016; Bolat et al., 2007). Therefore, new and detailed studies are needed to investigate the cost and profitability of plum production.

The aim of this study is to analyze the cost and profitability of plum production in Izmir, Turkey. The results obtained in this study can be a guide for farmers and entrepreneurs who will invest to establish a plum plant.

Materials and Methods

This study was performed in Izmir province, Turkey (Figure 1). The data of this paper is derived from Izmir Directorate of Provincial Agriculture and Forestry. Further data were also obtained from FAOSTAT and TURKSTAT for the various years. In this study, 2018 data were used for economic analysis of plum production.

 

The gross profit, net profit and relative profit indices were used to assess economic performance of plum production. The following formulas were used in the calculation of these indices (Acil and Demirci, 1984; Aydin et al., 2019).

Gross profit = Gross production value-Variable costs

Net profit = Gross Production value- Production costs

Relative profit= Gross production value/ Production cost

Plum production costs were divided into constant and variable costs. Constant costs consist of management costs, annual depreciation costs, revolving fund interest and land rent. Variable costs included inputs associated with plum production such as labor, machinery, fertilizer, pesticides, water, electricity, etc. In this study, revolving fund interest was calculated by charging a simple interest rate of 8%. Management costs were estimated 3% of total variable costs (Engindeniz and Ozturk, 2013; Ucar et al., 2020). Data are presented in dollars. In addition, Trend analysis was used to determine the trend of production and area of plum for the period of 2020-2024. Trend values were calculated using the ordinary least squares method.

Results and Discussion

Plum production in Turkey and Izmir province

Turkey plum production in 2004-2019 period reached 317,946 tons of plums increased by 51.40%. In addition, the plum area increased by 127.10% and became 21,058 hectares. In the same period, the production of plums in Izmir province increased by 113.34% and reached 11,373 tons, while the plum area increased by 106.44% and reached 1,177 hectares (Table 1). In the province of Izmir; Odemis, Kemalpasa and Menemen districts are leading in plum production with a share of 44.56%, 20.27% and 10.73%, respectively (TURKSTAT, 2020). Some factors that increase production can be summarized as; different climatic conditions of Turkey, development and cultivation of species and varieties adaptable to various ecologies, formation of modern orchards and developments in crop processing techniques (Karamursel, 2011; Osmanoglu et al., 2013; Gecer et al., 2015).

In period of 2020-2024, plum production amount and production area estimated in Turkey and in Izmir province by trend analysis. According to results of forecast, it has been determined that the amount of plum will be 348,408.60 tons and the plum area will be 25,007.45 hectares in Turkey (y (Plum Production) = 210991+ 6309.60 * t, y (Plum Area) = 134567 + 5303.60 * t). Plum production will reach 13,544.63 tons and plum area will reach 1,487.45 hectares in Izmir (y (Plum Production) = 3398.90 + 483.13 * t, y (Plum Area) = 3398.60 + 546.47 * t) (Figures 2 and 3).

 

 

Cost and profitability of plum production

Calculation of production costs in agricultural crops provides important information in terms of production activities, resource utilization efficiency, planning, policy making and determination of resource demand (Kiral et al., 1999).

 

Table 1: Plum production amount and area in Turkey and Izmir province.

Years	Turkey					Izmir Province
	Plum Production (Ton)	Index (2004=100)	Plum Area (ha)	Index (2004=100)	Plum Production (Ton)		Index (2004=100)	Plum Area (ha)	Index (2004=100)
2004	210,000	100.00	14,000	100.00	5,331		100.00	570	100.00
2006	214,416	102.10	14,004	100.03	5,602		105.08	576	101.11
2008	248,736	118.45	15,512	110.80	5,791		108.63	544	95.35
2010	240,806	114.67	16,624	118.75	5,091		95.50	576	101.04
2012	300,046	142.88	19,330	214.32	6,393		119.92	615	107.93
2014	265,490	126.42	20,027	189.64	8,512		159.67	1,174	205.91
2016	297,589	141.71	20,811	212.56	10,979		205.95	1,150	201.81
2018	296,878	141.37	20,672	212.06	11,391		213.67	1,177	206.51
2019	317,946	151.40	21,058	227.10	11,373		213.34	1,177	206.44

Source: TURKSTAT, 2020.

 

Plum production per hectare and plum yield per tree are given in Table 2. Total plum production value was 9,678 kg ha-1, number of tree per hectare was 400 and plum yield per tree was 24.20 kg. Baran et al. (2017a) calculated plum production value as 6,375 kg ha-1.

 

Table 2: Yield per hectare and tree of plum growing in Izmir province (2018).

Total plum production (kg ha-1)	9,678.00
Number of tree per hectare	400.00
Plum yield per tree (kg tree-1)	24.20

 

Table 3: Cost items for plum production in Izmir province (2018).

Cost Items	T total costs (US$ ha-1)	(%)
A. Variable Costs
1.Material Costs
Fertilizer	114.35	2.71
Water	99.79	2.37
Pesticides	135.14	3.21
Total Material Cost (a)	349.27	8.28
2. Labor and Machine Cost
Tillage	135.14	3.21
Pruning	155.93	3.70
Fertilizer	93.56	2.22
Irrigation	72.77	1.73
Pest Management	93.56	2.22
Hoeing	83.16	1.97
Harvest	384.62	9.12
Total Labor and Machine Cost (b)	1018.71	24.16
3.Other Costs
Transport	103.95	2.47
Packing	24.95	0.59
Total Other Costs (c)	128.90	3.06
Total Variable Cost (a+b+c)	1496.88	35.51
B. Constant Costs
Revolving fund interest (%8)	119.75	2.84
Management costs (3%)	44.91	1.07
Rent equivalent of land	1663.20	39.45
Annual depreciation costs (*)	891.00	21.14
Total Constant Cost(d)	2718.86	64.49
Production Cost (a+b+c+d)	4215.74	100.00

* The economic life of plum plantations was estimated as 30 years.

 

Production costs per hectare were calculated as 4215.74 US$. Total variable cost has been calculated as 1496.88 US$ ha-1. The share of variable costs was 35.51%, whereas the share of constant costs was 64.49%. In previous studies for other fruits indicated the share of varibale cost was 46.43% for cherry (Bilgili et al., 2019); 64.52% for apricot (Uçar et al., 2017) 61.7%; for apple (Uzunoz and Akcay, 2006); 89.79% for melon (Yılmaz et al., 2011); 45.46% for tangerine (Can and Yercan, 2006).

Variable costs for plum production are comprised of material costs, labor costs and other costs. It was determined that labor costs had the highest share among all variable costs (24.16%). Labor costs were followed by material costs (8.28%) and other costs (3.06%) (Table 3).

Karamursel (2010) carried out a study in which it was reported that variable costs of plum production were 2686.67 US$ ha-1 and the total cost of production was 5506.67 US$ ha-1. Tabatabaie et al. (2012) calculated that the shares of variable cost from total cost was 65% and 61% for Ghatreh Tala and Shablon production, respectively.

In this study, cost to produce 1 kg of plum was calculated to be 0.44 US$ (Table 4). In a study conducted by Knutsen and Haukås (2007) the cost of producing 1 kg of Jubileum plum, the cheapest to produce, was calcullated to be NOK 14.63, while Victoria plum, the most expensive to produce, was calculated to be NOK 19.18 per kg.

 

Table 4: Unit cost of plum production in Izmir province (US$ kg-1) (2018).

Cost ıtems
Plum yield per hectare (kg) (1)	9,678.00
Total production cost (US$) (2)	4,215.74
Unit plum cost (US$ kg-1) (2/1)	0.44

 

Gross production value per hectare from plum cultivation is 5,032.56 US$, net profit per hectare is 816.82 US$ and relative profit is 1.19 (Table 5). The product sales price is 0.52 US$ kg-1. Producers use 73.60% of the sales price they receive as an cost (Table 5). However, in a similar study the total cost for the Ghatreh Tala cultivar and Shablon cultivar production were determined to be 11,267.43 $ ha−1 and 9,504.94 $ ha−1 while the gross production value were found to be 47,145.93 $ ha−1 and 23,358.46 $ ha−1 respectively. Balcı et al. (2016) calculated the net profit as 322.11 US$ ha-1. The economic research in other crops indicated the relative profit was 2.05 for almond (Demircan et al., 2019); 1.20 for wheat and 1.02 for sunflower (Unakıtan and Aydin, 2018); 2.37 for orange and 1.89 for lemon (Ozkan et al., 2004); 1.88 for walnut (Baran et al., 2017b); 1.36 for table tomato and 1.15 for processing tomato (Engindeniz and Ozturk, 2013).

 

Table 5: Net income obtained from plum production in Izmir province (US$ ha-1) (2018).

Income items
Yield per hectare (kgha-1) (1)	9,678.00
Plum price (US$ kg-1) (2)	0.52
Gross production value (US$ ha-1) (3=1x2)	5,032.56
Variable costs US$ ha-1	1,496.88
Total production cost (US$ ha-1) (4)	4,215.74
Net profit (US$ ha-1) (3-4)	816.82
Relative profit (3/4)	1.19

 

Conclusions and Recommendations

Plum has spread over wide areas thanks to the multitude of subspecies with different characteristics, its adaptability to different ecologies and the richness of rootstocks. Due to the ease of cultural processes in plum cultivation, the long harvest season and the high nutritional value, the interest in plum cultivation is increasing in the world and in Turkey. In addition to the large number of subspecies, it is possible to see plum varieties in the country market for 5-6 months due to the opportunities provided by different ecological regions in Turkey.

Izmir fruit production potential is high, it has an industry that processes fruits, and its export potential is high due to its geographical location. Plum production in Izmir province contributes significantly to the economy of the country and the livelihood of producers. Plum production and area of Turkey and Izmir provinces have reached the conclusion to continue to grow in future years. Plum production was found to be profitable in terms of net profit and relative profit. In the evaluation made in terms of variable costs in plum cultivation; labor costs and material costs take an important value. Plum is consumed fresh and dried on the market.

It is necessary to take some measures for the development of plum production and for the producers to maintain this production branch. The use of plum as raw material should be increased. Producers should be encouraged to use certified seedlings. Training and extension studies on fertilization and spraying should be done for producers. In order to be less affected by agricultural frost damage, suitable species and varieties of plum trees should be grown.

Agricultural insurance should be done to reduce the economic risk caused by agricultural frost. Producers should be encouraged to produce organic plums. In order not to be affected by the negativity of low plum prices, it should be ensured to establish cold stores where the products can be kept. Producers should be encouraged to cooperate.

As a result, the implementation of branding and marketing systems that will ensure the preference of patented local products in the marketing of fresh and processed plums, the development of market information system and e-marketing, the establishment of a product exchange for plums in the province, the implementation of the contracted production system and the development of agricultural marketing infrastructure should be ensured.

Acknowledgements

The authors are grateful to Izmir Directorate of Provincial Agriculture and Forestry for providing the necessary data to carry out this research.

Novelty Statement

The authors of this study have developed a collaboration to prepare the publication. The authors first carried out a study on plum production and economy, which is one of the important fruits.

Many studies have been done on plums before in Turkey. However, there is a need for studies that can be a guide especially for producers and entrepreneurs. This study was prepared with data collected from Izmir Directorate of Provincial Agriculture and Forestry.

Author’s Contribution

Sait Engindeniz: Conceived and coordinated the study, wrote conclusion and recommendations.

Kubilay Ucar: collected data, acquired the results and contributed to ıntroduction, material and methods.

Görkem Oruk: Made revisions of the manuscript and wrote introduction, material and methods.

The final manuscript had been read and approved by all authors.

Conflict of interest

The authors have declared no conflict of interest.

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