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Economic Aspects of Dessert Apple Production Author(s): P. F. McDonnell Source: Irish Journal of Agricultural Economics and Rural Sociology, Vol. 3, No. 3 (1970/1971), pp. 279-290 Published by: TEAGASC-Agriculture and Food Development Authority Stable URL: http://www.jstor.org/stable/25556365 . Accessed: 12/06/2014 14:18 Your use of the JSTOR archive indicates your acceptance of the Terms & Conditions of Use, available at . http://www.jstor.org/page/info/about/policies/terms.jsp . JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range of content in a trusted digital archive. We use information technology and tools to increase productivity and facilitate new forms of scholarship. For more information about JSTOR, please contact [email protected]. . TEAGASC-Agriculture and Food Development Authority is collaborating with JSTOR to digitize, preserve and extend access to Irish Journal of Agricultural Economics and Rural Sociology. http://www.jstor.org This content downloaded from 188.72.126.181 on Thu, 12 Jun 2014 14:18:57 PM All use subject to JSTOR Terms and Conditions

Economic Aspects of Dessert Apple Production

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Economic Aspects of Dessert Apple ProductionAuthor(s): P. F. McDonnellSource: Irish Journal of Agricultural Economics and Rural Sociology, Vol. 3, No. 3(1970/1971), pp. 279-290Published by: TEAGASC-Agriculture and Food Development AuthorityStable URL: http://www.jstor.org/stable/25556365 .

Accessed: 12/06/2014 14:18

Your use of the JSTOR archive indicates your acceptance of the Terms & Conditions of Use, available at .http://www.jstor.org/page/info/about/policies/terms.jsp

.JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range ofcontent in a trusted digital archive. We use information technology and tools to increase productivity and facilitate new formsof scholarship. For more information about JSTOR, please contact [email protected].

.

TEAGASC-Agriculture and Food Development Authority is collaborating with JSTOR to digitize, preserve andextend access to Irish Journal of Agricultural Economics and Rural Sociology.

http://www.jstor.org

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ECONOMIC ASPECTS OF DESSERT APPLE PRODUCTION

P. F. McDonnell

An Foras Taluntais, Pomology Research Centre, Dungarvan, Co. Waterford

ABSTRACT

Intensive and extensive apple orchards containing 1,250 spindlebush trees and 300 bush trees per hectare, respectively, were considered. Data on the total costs and labour requirements in planting,

maintaining and harvesting these orchards are presented. Requirements of seasonal labour are dis cussed. The results suggest that a competent working owner-occupier could maintain twelve hectares of apple trees.

The profitability of intensive and extensive production systems were examined by the discounted cash flow method of analysis. The intensive orchard broke even in a shorter period and provided higher returns on invested capital than the extensive orchard. Market returns for the fruit had a

pronounced effect on profitability in both production systems. Results are discussed in the context of commercial apple production. The analysis method described was suggested as suitable for assessing the profitability of an apple orchard.

INTRODUCTION

Systems of producing apples have changed considerably in the past decade. The traditional extensive orchards, containing 100 to 300 trees per hectare, have been

largely replaced by the more intensive spindlebush orchards containing 1,200 or more trees per hectare. Research results have shown that, for most apple cultivars, the

spindlebush system produces earlier and higher yields and better quality fruit than other production systems (1).

However, the spindlebush system involves high initial capital costs. Little infor mation was available on the economics of these various production systems. In view

of the increased interest in Irish apple production in recent years, more precise infor mation on the costs of various production systems was required.

This paper compares the initial and subsequent annual costs and the eventual

profitability of an intensive and an extensive apple production system.

METHODOLOGY Standard times and costs

Detailed records of the costs and labour requirements of the various orchard

operations were maintained in two commercial spindlebush orchards. Records in one

279

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280 IR. J. AGRIC. ECON. RUR. SOCIOL. VOL. 3, NO. 3, 1970-71

orchard, planted in January 1967, were maintained for four years (1967 to 1970); in the other orchard, planted in January 1968, records were maintained for three years

(1968 to 1970). In addition, data were obtained during 1970 at the Pomology Research Centre on the costs and labour requirements of maintaining and harvesting mature bush (extensive) and spindlebush (intensive) orchards.

These records were subsequently analysed and the labour requirements and costs of various orchard operations were computed. Labour requirements were found to

vary appreciably from one situation to the next, depending on the equipment avail

able, the method of carrying out the various operations and the ability and capacity of the personnel. "Standard times" for the various operations in intensive and extensive orchards were arrived at by comparing the above data with those of other workers

(2, 3, 4, 5, 6, 7). The costs of materials were far less variable than those of labour requirements.

Reliable "standard costs" for orchard planting and maintenance were estimated from

the collected data.

Comparison of production systems Two apple production systems were compared: an intensive orchard containing

1,250 spindlebush trees per hectare; and an extensive orchard containing 300 bush

trees per hectare. Probable yields were estimated on the basis of experimental results at the Pomology Research Centre and of commercial experience in Irish orchards. Twelve hectares was taken as the orchard size for comparison purposes, since this was

regarded as an economic unit.1

To simplify the comparison, only the establishment, maintenance and harvesting costs were considered. Storage and marketing costs were excluded since these would be similar for both systems.

Calculations of costs and returns were made on the basis of three possible market returns for the fruit: ?40, ?52.5 and ?65 per ton. The profitability of the enterprises

were compared on the basis of the discounted cash flow method of analysis (8, 9).

LABOUR REQUIREMENTS AND COSTS

Labour requirements and costs of establishment and maintenance

The standard times and costs were used to compute the labour requirements and

costs of materials in planting and annual maintenance of intensive and extensive

orchards. These data are summarised in Table 1.

Planting labour and planting costs in the intensive orchard were more than two

and three times those in the extensive orchard, respectively, due to the larger number

of trees. Maintenance labour was higher in the intensive orchard, especially in the

early years.

i Author's estimate.

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McDONNELL: APPLE PRODUCTION 281

TABLE 1: Labour requirements and costs of materials in planting and

maintaining intensive and extensive apple orchards

Labour Costs of materials (man hours per hectare) (? per hectare)

Intensive6 Extensive5 Intensive8 Extensive5

Planting 357 155 720 203 Maintenance0: year 1 243 91 121 89

year 2 189 96 103 84 year 3 160 90 120 90 year 4 170 94 123 99 year5 166 94 123 103 year 6 198 101 123 110 year 7 215 109 123 123 year 8 215 119 123 123 year 9 215 133 123 123 year 10 215 148 123 123 year 11 215 163 123 123 year 12 215 178 123 123 year 13d 215 190 123 123

Source: Author's estimates and orchard records. 8

1,250 spindlebush trees per hectare b 300 bush trees per hectare *j Maintenance includes all costs except those of apple harvesting d Labour requirements and costs are similar from year 13 onwards

TABLE 2: Expected yields and the labour requirements in harvesting fruit in intensive and extensive apple orchards

Intensive orchard8 Extensive orchard1*

Yield Labour Yield Labour (tons (man hours (tons (man hours

Year per hectare) per hectare) per hectare) per hectare)

3 2.4 37 ? ?

4 11.8 136 ? ?

5 23.7 230 1.4 35 6 28.4 259 3.3 62 7 28.4 259 4.7 82 8 28.4 259 7.1 111 9 28.4 259 9.5 136

10 28.4 259 14.2 180 11 28.4 259 18.9 217 12 28.4 259 23,7 250

13c 28.4 259 28.4 289

Source: Author's estimates and orchard records *

1,250 spindlebush trees per hectare ? 300 bush trees per hectare c Yields and harvesting labour are similar from year 13 onwards

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282 IR. J. AGRIC. ECON. RUR. SOCIOL. VOL. 3, NO. 3, 1970-71

The costs of maintenance materials (fertilisers, fungicides, insecticides, machinery, etc.) were slightly higher in the intensive orchard during the early years, but were

similar in both orchards from the seventh year onwards.

Yields and harvesting labour

The expected yields and the annual labour requirements in fruit harvesting are

shown in Table 2. The intensive spindlebush trees began cropping in the third year and attained full production in the sixth year. In contrast, the extensive bush trees

did not begin cropping until the fifth year and did not reach full production until the

thirteenth year.

Harvesting labour increased as yields increased. However, the efficiency of labour

(weight of fruit picked per manhour) also increased as yields increased. Harvesting labour was more efficient on the smaller intensive trees than on the larger extensive trees.

Seasonal labour

The seasonal labour requirements in the intensive orchard are illustrated in Fig. 1.

Monthly labour requirements remained relatively constant during the first year

(Fig. la), except during August and September when extra labour was required to tie

down branches. There were two peak labour periods in the mature orchard (Fig. lb): the first in June and July for fruitlet thinning and the second in September and October

for harvesting. Apple harvesting was by far the most laborious operation in the mature

orchard. Seasonal labour requirements in the mature extensive orchard were similar

to those in the intensive orchard.

It is apparent from Fig. 1 that if casual labour was employed to tie down branches

in the early years and to thin and harvest the fruit in later years, the seasonal require ments of regular labour would be relatively constant throughout the year.

Orchard size

If a fruit grower devoted four weeks (180 hours) to the supervision of apple har

vesting, he would have 2,070 hours available each year for orchard maintenance.2 Provided the fruit was stored and marketed by a co-operative or other organisation and that casual labour was employed for fruitlet thinning and harvesting, the grower could alone maintain:

a) 12 hectares of intensive orchard, since 170 labour hours per hectare would be required for annual maintenance; or

b) 15 hectares of extensive orchard, since 130 labour hours per hectare would be required for annual maintenance.

The above estimates were based on the original standard times for the various orchard operations. However, the size of orchard which one man could maintain

2 Assuming that the grower worked a 45-hour week and took two weeks holidays each year.

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McDONNELL: APPLE PRODUCTION 283

A: Year of planting

1 H 60- r|

1

? 20-1?1 g?f$

k_ _ _ <D _ -f-1-1-1 a !

' i

aj 0-1?I?I?I?'?I?I?*?U-l?I?I?L o

)rx B: Mature orchard

^ 7 !$i?? Baa Casual labour

^ 50_ M Ull DRe9ular labour

so- mm wi

io- Mil

F??. /: Seasonal labour requirements in an intensive (spindlebush) orchard

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284 IR. J. AGRIC. ECON. RUR. SOCIOL. VOL. 3, NO. 3, 1970-71

TABLE 3: Capital and maintenance costs of machinery in a

12-hectare apple orchard*

Original Written off Trade-in Annual maintenance cost over value and fuel costs

Item (?) (years) (?) (?)

Tractor 1,200 8 250 80 Orchard sprayer 600 8 100 23 Grass mower 350 10 50 7 Herbicide applicator 110 8 20 5 Fertiliser distributor 70 10 10 5

Trailer 120 12 20 5 Tractor fork-lift 350 8 50 5 Miscellaneous items 100 ? ? 30

TOTALS 2,900 ? ? 160

Source: Author's estimates and (11). * Assumes the purchase of a complete range of new machinery

would depend on the grower's technical skill and on his managerial ability as well as on the equipment available and the layout of the orchard.

COMPARISON OF PRODUCTION SYSTEMS

Method of comparison The intensive and extensive apple production systems were compared by examining

the costs and returns of 12-hectare orchard units over a 25-year period. In both cases

the grower was assumed to have purchased the necessary land and machinery.

Since land "wastage" in shelterbelts, roadways and buildings normally accounts for about 20 percent of the total area,3 it was assumed that 15 hectares of land were

required to contain 12 hectares of apple trees. The total cost of the land with its

accessory buildings, including auctioneers' and solicitors' fees was taken at ?10,725.4

Accessory buildings were taken to include a dwelling house to accommodate the owner and sheds for the storage of machinery. All of the land was assumed to be suitable for apple production.

Initial preparation of the land (for example, drainage and removal of hedges) was

assumed to cost ?740.4 The necessary machinery is detailed in Table 3, together with the original costs and the annual maintenance charges.

The intensive orchard was planted over a three-year period (5,000 trees per year). All 3,600 trees in the extensive orchard were planted in the first year.

3 The "wastage" figure of 20 percent is an arbitrary one taken to represent the average situation. 4 Author's estimates.

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McDONNELL: APPLE PRODUCTION 285

Labour requirements and costs of materials in planting and maintenance were those indicated in Table 1. The grower's own labour was charged at the normal rate of ?0.35 per hour (10). The annual yields and harvesting labour were those detailed in Table 2.

Storage and marketing of the fruit was carried out by a co-operative organisation; the grower produced and harvested the fruit only. Apple harvesting was accomplished

with the aid of picking buckets and bulk bins. The grower purchased the picking buckets; bulk bins were provided by the co-operative organisation.

Method of analysis In order to assess accurately the costs and returns of these orchard units over a

25-year period it was necessary to take account of the annual increases in costs. Labour costs, including the grower's own labour, were assumed to increase by 6

percent annually (12). The costs of materials, such as apple trees, orchard maintenance materials and apple picking buckets as well as machinery costs and annuities and rates, were assumed to increase at an annual rate of 3.5 percent.5 Market returns for the fruit were assumed to increase by 1.5 percent annually; this increase took account of improved production techniques, which may reduce costs and/or increase yields, as well as slight increases in market prices.

Since apple production is a long-term enterprise, the basic cash flow method

(annual balance of cash) was regarded as unsuitable in analysing this type of financial situation. The invested capital was annually depreciating in value. For example, ?1,000 invested in an apple orchard in 1970 would need to return more than ?1,000 in 1980 to break even.

The discounted cash flow method (D.C.F.) was regarded as more suitable. The

D.C.F. method of analysis or investment appraisal is the present value of the fore

casted annual net earnings of profits for a given period of time (8, 9).

Examples of the D.C.F. method of analysis for the intensive and extensive orchards over the first twelve years are shown in Tables 4 and 5, respectively. The return of

?52.50 per ton represented the grower's gross return, having already deducted charges for storage and marketing.

The D.C.F. rate of return on capital for the various time periods was found by

discounting the forecasted annual net returns (gross returns less total annual costs) back to their present value at various discount rates. The discount rate at which the

cumulative net returns at present value came to zero represented the D.C.F. rate of

return on capital over that particular time period. "Capital" was taken to include all

costs incurred in establishing, maintaining and harvesting these orchards.

Thus, in Table 4 net returns were discounted back to present value at the 15 per cent rate. By the tenth year the cumulative net returns at present value were ??722.

5 Author's estimates.

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to 00 o\

TABLE 4: Analysis of the costs and returns of a

12-hectare

intensive apple orchard; ?52.50 per ton gross return3 53

Year

> Item 123456789 10 11 12 2

- O

Land 10,725 ? ? _ ? -._-____? *

Preparation of landb 740?-?-?. ? __- ? ? -_ ? ? ^ Planting costs: materials 2,880

2,981 3,085 _____ ____ ? O

labour6 225 396 557 ? . ? ? ? ? ? ? ? ? %

Annuities and ratesd 45 47 48 50 52 53 55 57 59 61 63 66 *

Machinery: capital costs

2,550

? 375 ? ? ? ? ? 2,515 ? 1,086 ? g

maintenance costs 160 166 171 177 184 190 197 204 211 218 226 234 <# Maintenance costs: materials 484 927 1,474

1,495

1,680 1,753 1,814 1,878 1,944 2,012 2,082 2,155

labour0 ? ?116 3 ? 30 123 234 286 303 321 340 5S

Grower's labour 819 868 920 975 1,034 1,096

1,162 1,231 1,305 1,384 1,467 1,555 ft

Apple picking buckets ? ? 11 11 29 30 25 13 2,515 ? 1,086 ? ~

Apple harvesting costs' ? ? 23 242 712

1,171

1,485 1,636 1,734 1,838 1,948 2,065 g

Total annual costs 18,628 5,385 6,780 2,953 3,691

4,323 4,861 5,253 8,054 5,816 7,193 6,145

Gross returns (?52.50 per ton) ? ? 519 3,118

8,447

14,456 18,485 19,857 20,155 20,458 20,764 21,076 <

Net returns -18,628 -5,385 -6,261 165 4,765 10,133 13,624 14,604 12,101 14,642 13,571 14,931 O

Net returns at present value

(15%) -18,628 -4,724 -4,734 108 2,719 5,038 5,890 5,490 3,956 4,163 3,355 3,209 u?

Cumulative net returns at ^

present value -18,628 -23,352 -28,086 -27,978 -25,259 -20,221 -14,331 -8,841 -4,885 -722 2,633 5,842 g

__-_ -_____---_-_- -____---__?-^ u?

1,250 spindlebush trees per hectare ,__

b

Author's

estimate \?

c Grower provided 55, 25 and 0 percent of planting labour in years 1, 2 and 3 respectively; remaining labour cost ?0.35 per hour (10) -^ d Source: Fingleton, W. A., Hickey, B. C. and Heavey, J. F.,

'Farm Management Survey 1968-69.' An Foras Taluntais, Dublin, 1971. <?

e All maintenance labour in excess of the grower's capacity (2,070 hours per year) was charged at ?0.35 per hour (10) -4

' Grower provided 60 and 16 percent of harvesting labour in years 3 and 4, respectively; subsequently he supervised harvesting only; remaining labour cost ?0.35 per hour (10) *+

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McDONNELL: APPLE PRODUCTION 287

Therefore, the orchard provided a little less than 15 percent return on capital over the first ten years; by the eleventh year the orchard provided 15 percent return on capital plus a surplus of ?2,633. The extensive orchard (Table 5) provided less than 1 percent return on capital over the first twelve years since the cumulative net returns at present

value showed a deficit of ??6,809 by the twelfth year at the 1 percent discount rate.

RESULTS AND DISCUSSION

The D.C.F. method of analysis was applied to the 12-hectare intensive and extensive

apple orchards at gross returns of ?40, ?52.50 and ?65 per ton. Results are sum

marised in Table 6. The intensive system provided far higher returns on capital than the extensive

orchard. Although the initial costs were higher in the intensive than in the extensive

system (Tables 4 and 5), the former produced high early yields, thereby reducing the

pay-back period and providing higher returns on the investment. Market returns on the fruit had a pronounced effect on the profitability of the

enterprises. For example, the rates of return on capital over the first ten years in the

intensive orchard were 6 and 21 percent at the ?40 and ?65 per ton rates, respectively. The financial risk in apple production may be assessed by the amount of capital

outlayed and by the number of years required to break even. If the cost of financing the enterprises is taken at 9 percent rate of return on capital and if the gross return on fruit is taken at ?52.50 per ton, the intensive system would break even in less than ten years whereas the extensive system would require more than 15 years (Table 6).

Therefore, although capital costs were higher in the intensive system the extensive

grower obviously takes a greater risk than the intensive grower. Enterprises which do not break even within fifteen years are doubtful financial propositions in modern

circumstances; in these analyses the extensive grower is in this category. Since eventual yields were assumed to be similar in the intensive and extensive

orchards, the annual profit margins after break-even year were affected only by the returns for the fruit. However, factors not taken into account in these analyses, such as

fruit quality and market conditions, might seriously alter the annual profit margin. The analyses described represent an investment appraisal of one particular situa

tion only in which the grower purchases land and machinery and establishes the

orchard. Many very different situations may be envisaged in which these enterprises may be more or less profitable. For example, the grower may already be in the ex

panding phase and may already own the necessary land and machinery in which case

capital costs would be considerably reduced. The grower may not have the necessary technical knowledge and skill to ensure the success of the enterprise and may need to

employ a manager, thereby increasing his variable costs. The grower may be required to provide his own bulk bins and storage facilities in which case capital requirements

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00 00

TABLE 5: Analysis of the costs and returns of a

12-hectare

extensive apple orchard; ?52.50 per ton gross return8 &

???_????__?_? ??M__________a___________a_______^ v-i

Year >

- g

Item 123456789 10 11 12 2

- r>

Land 10,725 __ _ _________

Preparation of landb 740 ? __________ _ _ f-j

Planting costs: materials 2,436 ? ? ? ? ? ? ? ? ? ? ? O

labour6 376?. _ _ _ ______ _ :_*

Annuities and ratesd 45 47 48 50 52 53 55 57 59 61 63 66 *

Machinery: capital costs 2,550 ? 375 ? ? ? ? ? 2,519 ? 1,086 ? 2 maintenance costs 160 166 171 177 184 190 197 204 211 218 226 234 & Maintenance costs: materials 1,068 1,043 1,157 1,317 1,418 1,568 1,814 1,878 1,944 2,012 2,082 2,155

laboure ___________ _44g

Grower's labour 819 868 920 975 1,034 1,096 1,162 1,231 1,305 1,384 1,467 1,555 X

Apple picking buckets _____ H 12 12 19 20 20 14 15 ~

Apple harvesting costsf _____ 93 261 391 684 910 1,277 1,632 1,993 2

Total annual costs 18,919 2,124 2,671 2,519 2,792 3,180 3,631 4,073 6,964 4,972 6,570 6,062 r

Gross returns (?52.50 per ton) _____ 936 2,239 3,238 4,964 6,742 10,228 13,818 17,588 <

Net returns -18,919 -2,124 -2,671 -2,519 -1,856 -941 -393 891 -222 5,256 7,248 11,526 g

Net returns at present ?

value (1%) -18,919 -2,103 -2,618 -2,445 -1,784 -895 -370 831 -205 4,806 6,562 10,331 y>

Cumulative net returns at ?

present value -18,919 -21,022-23,640 -26,085 -27,869 -28,764 -29,134 -28,303 -28,508 -23,702 -17,140 -6,809 g ~ ??~"~ "~"~ ???????? ?????? ?__- _-_-_____- _____ mmmmm-m,^m^^^mm^-^mm?-?m-m?~?m?m**^?mm*m?mm?mmm??-mm?^^^?-?^m~mmmm~imm~~?mmmmm>?.

* 300 bush trees per hectare

b Author's estimate ?

J Grower provided 42 percent of planting labour; remaining labour cost ?0.35 per hour (10) -j

a Source: Fingleton, W. A., Hickey, B. C. and Heavey, J. F., 'Farm Management Survey 1968-69.* An Foras Taluntais, Dublin, 1971 <P

All maintenance labour in excess of the grower's capacity (2,070 hours per year) was charged at ?0.35 per hour (10) <i

r Grower provided 50,25,20 and 2 percent of harvesting labour in years 5,6,7 and 8, respectively; subsequently he supervised harvesting only; remaining Labour cost ?0.35 per hour (10) -*

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McDONNELL: APPLE PRODUCTION 289

TABLE 6: Summary of the profitability of two systems of

apple production (12-hectare units)

Intensive* Extensive1* Production system

- -

Gross return on fruit (? per ton) 40 52.50 65 40 52.50 65

D.C.F. rate of return on capital (%): years 0 to 10 6 15 21 0 0 0 years 0 to 15 13 21 26 2 8 12 years 0 to 20 16 22 27 7 12 16 years 0 to 25 17 23 28 9 14 17

1,250 spindlebush trees per hectare b 300 bush trees per hectare

would be far higher. Several other situations might be envisaged in which other factors

may need to be taken into account and in which the assumptions made in the above

analyses may not apply accurately. However, the analyses provide the general back

ground from which the profitability of an orchard investment might be assessed.

CONCLUSIONS

The labour requirements in orchard maintenance are relatively constant throughout the year. A competent working owner-occupier could maintain twelve hectares of

apple trees by employing casual labour for fruitlet thinning and harvesting. A good deal of labour is required in apple harvesting. Before establishing an

orchard the grower must ensure that sufficient casual labour is and will remain avail able locally. In addition, growers should choose apple cultivars to spread the harvest

ing over as long a period as possible. However, many additional technical considera tions are involved in the choice of cultivars.

The gross return on the fruit has a very important bearing on the profitability of an orchard. The yield also has an important influence on orchard economics. Annual

yields may vary considerably from those indicated in Table 3. The system of production affects the profitability of an apple orchard. In the

analyses (Table 6), the intensive system proved more profitable than the extensive

system because of the earlier yields in the former system. However, this conclusion

may not apply in all circumstances. Higher early yields than those indicated in Table 3

may be possible in the extensive system. Eventual yields were assumed to be similar on both production systems; this may

not necessarily be the case. In addition many other systems may be employed for pro

ducing apples, varying from extensive plantings with temporary filler trees to very intensive plantings of more than 3,000 trees per hectare; these systems were not taken into account in the analyses.

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290 IR. J. AGRIC. ECON. RUR. SOCIOL. VOL. 3, NO. 3, 1970-71

Several other factors may affect the economics of an orchard, including: 1) the suitability of the site from the viewpoints of productivity and efficiency;

2) the problems encountered with disease control; and 3) the technical knowledge, skill and managerial ability of the grower.

The methods described in this paper provide a reasonably simple and accurate mode of analysing the profitability of an orchard enterprise. However, in many cir cumstances the assumptions made may not apply accurately and other factors may need to be taken into account.

ACKNOWLEDGMENTS

The author wishes to thank Mr. F. K. O'Neill and Mr. C. Cowan, Rural Economy Research Centre, An Foras Taluntais, Dr. E. T. Gibbons, Ministry of Agriculture, Northern Ireland and Dr. R. R. W. Folley, School of Rural Economics and Related

Studies, Wye College, University of London, for their many helpful suggestions and criticisms.

REFERENCES

1. McDonnell, P. F., Grower 71: 931, 1969. 2. Fritzsche, R. and Wirth, P., Schweiz. Z. Obst-u. Weinb. 67: 403, 423, 1958. 3. Steer, P., 'Apple growing costs and returns.' Ministry of Agriculture, Fisheries and Food,

Maidstone, Kent, 1969. 4. Van Lookeren Campagne, P., Fruitteelt 55: 698, 1965. 5. Wilking, E., Erwerbobstbau 7: 113, 1965. 6. Worraker, E., Comml Grow. September 6, 203, 1968. 7. Zuroske, C. H., Bull. Wash, agric. Exp. Stn No. 644, 1962. 8. Blythe, L. T. and Smith, T. R., 'Discounted cash flow; No. 6/ Sussex, 1966. 9. National Economic Development Council, 'Investment appraisal.* HMSO, London, 1967.

10. Agricultural Wages Board, 'Memorandum of 31st May 1971,' Dublin, 1971. 11. Anon., 'Farm Management Manual.' An Foras Taluntais, Dublin, 1965. 12. Anon., Statist. Abstr. Ire., 1969.

Received May 19,1971

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