Panayiotou, G.S.
(1987)
The economics of groundnut production in Cyprus.
Project Report.
Agricultural Research Institute, Ministry of Agriculture and Natural Resources, Nisocia, Cyprus.
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Abstract
This study was conducted in 1985 and covered 30 groundnut farms in 6 villages of the Paphos coastal plain. The mean operated land was 4.3 ha/farm of which 1.4 ha was under groundnuts. The majority of growers used mechanical sowing and harvesting, and chemical weed control. The labour requirements (500 h/ha) were covered by family labour (63%) and hired labour (37%). The most labour-intensive operations were hand weeding, accounting for 38% of the total labour, harvesting and pod cleaning with 38%, and irrigation with 19%. The average variable and total costs per ton of groundnuts were C£388 and C£576, respectively, and were inversely related to yield/ha. Gross revenue per ha averaged C£1689 and ranged between C£1128 and C£2386 among the different yield groups. Gross profit averaged C£776 and ranged between C£244 and C£1453/ha. Net profit, which was negative in the lower yield group, averaged C£131/ha. The break-even point occurred at 2495 kg/ha, and nearly two thirds of the growers were operating above it. The lowest cost point (point of intersection of the average total and marginal cost curves) was achieved at the level of 4400 kg/ha but only 10-15% of the growers were operating at that level. The level of profit maximization (point of intersection of marginal revenue and marginal cost curves) was 4760 kg/ha but none of the growers in the sample reached it. Productivity analysis based on the Cobb-Douglas production function indicated that the economic results could be improved if more capital could be substituted for labour (mainly chemical weedicides) and more land per farm could be under groundnuts. Due to the highly elastic demand further expansion is possible but overall production of groundnuts should not exceed demand because it will depress farmer's price and income. Proper development of the recently opened markets for selected, large-kernel roasted-and-salted groundnuts could provide a good outlet for quantities of up to 500 tons of pods
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