A study on the economic efficiency of the fruit farming income stabilization program: Strategic information use by mandarin orange farmers' cooperatives

• Published in: Agricultural Information Research Vol. 14; no. 3; pp. 195 - 206
• Main Authors: Matsushita, S.(National Agricultural Research Center, Tsukuba, Ibaraki (Japan)), Takahashi, K, Ono, H
• Format: Journal Article
• Language: English; Japanese
• Published: Japanese Society of Agricultural Informatics 2005
• Subjects: ANALISIS ECONOMICO; ANALYSE ECONOMIQUE; best response strategy; COMPETENCIA IMPERFECTA; CONCURRENCE IMPARFAITE; ECONOMIC ANALYSIS; FARM MANAGEMENT; FRUIT CROPS; Fruits farming income stabilization program; FRUTALES; GESTION DE L'EXPLOITATION AGRICOLE; IMPERFECT COMPETITION; mandarin orange farmers' cooperatives; MANEJO DE FINCAS; METHODE STATISTIQUE; METODOS ESTADISTICOS; non-cooperative game; oligopolistic model; PLANTE FRUITIERE; PRODUCTION CONTROLS; REGULACION DE LA PRODUCCION; REGULATION DE LA PRODUCTION; SATSUMA; SATSUMAS; STATISTICAL METHODS; strategic information use
• ISSN: 0916-9482; 1881-5219
• DOI: 10.3173/air.14.195

The purpose of this paper is to clarify the economic efficiency of a Japanese "Fruit Farming Income Stabilization Program" within the framework of a non-cooperative game under oligopolistic market conditions. The income stabilization program seeks to mitigate the impact of falling prices on farmers in a good harvest year. This paper investigates two topics. It firstly estimates the marginal revenue and marginal cost of mandarin orange farmers' cooperative shipping. It then compares the estimated marginal revenue and marginal cost of each mandarin orange farmers' cooperative in view of their strategic information use. The main conclusions of this paper are summarized as follows: 1) In a good harvest year, the best response strategy is for all mandarin orange farmers' cooperatives to follow a fruit farming income stabilization program. 2) In a bad harvest year, the best response strategy is for some mandarin orange farmers' cooperatives to withdraw from a fruit farming income stabilization program. 3) Considering these results it is reasonable for mandarin orange farmers' cooperatives to follow this program. On the other hand, there are various kinds of agricultural policy on mandarin orange production. They are, for instance, a deficiency payment system for the shipment of fruit for juice processing, an acreage reduction program, and so on. It is important that the Fruit Fanning Income Stabilization Program be coupled with these programs. Therefore, opportunity cost must be a crucial component of any discussion about the economic efficiency of the program.