PROFITABILITY OF MIXED FRUIT TREE FARMS IN ALBANIA ...

PROFITABILITY OF MIXED FRUIT TREE FARMS IN
ALBANIA
Majlinda Çakalli 1 , Enver Brahimsulaj 2 , Endrit Kullaj 3
Summary
Fruit tree farms in Albania, as other agricultural farms, are characterised by their
small size and diversification. Under different relief, unorganised market channels and
unstable demand, fruit growers are faced with diverse alternatives to chose. This study
aimed at identifying the most profitable combinations of mixed fruit tree species and
accessory activities (crop and animal production) for different terrains.
The research presented was conducted in Vlora region during 2008 - 2009
analysing mixed fruit farms located at 3 different altitudes (< 150 m, 150 – 250 m and
250 – 400 m) and slopes (< 5%, 5 – 15% and > 15%). A total of 71 farms were
investigated, with a total surface of 133.52 ha, 62% of which was planted with fruit
trees. Data collected was related to species and respective surfaces, total incomes from
fruit trees and accessory activities, yields, production, costs and prices of products, net
and per capita incomes, technology used, sale channels, sources of funding for new
plantations and use of labour.
The results showed that the most effective types of mixed fruit farms for each type of
terrain and altitude. Accessory activities provide a considerable income, especially until
the fruit trees enter into production. Such mixed farm will be dominant even in the
middle term, especially in hilly and sloppy terrains. Among these activities, production
of seedlings is very profitable but limited to lowlands.
This study helps in assessing the profitability of fruit farms under different growing
conditions and orients the fruit growers in better planning these investments.
Key words: mixed fruit farms, profitability, sustainability, Albania
Introduction
The Albanian fruit sector today is characterised by issues related to land ownership,
land fragmentarisation, small size, lack of capital for adequate investments, territorial
extension of the ownership, inability of the Government to adequately support these
sector, etc.). However, such family fruit farms are the main axis of the Albanian fruit
sector and represent a continuously changing reality (MBUMK 2009).
A medium- and long-term policy, with a clear programme is aiming at the
intensification of the fruit tree sector by offering incentives to joint-ownerships,
specialisation, introduction of modern technologies and high-potential cultivars, etc.
However, the existence of mixed fruit farms (i.e. farms with several crops and/or
animals with domination of fruit tree species) will remain the dominant type even in the
1 Department of Agrarian Economics and Policies, Faculty of Economics and Agribusiness, Agricultural
University of Tirana
2 Agricultural Technology Transfer Centre of Vlora, Ministry of Agriculture, Food and Consumer Protection
3 Department of Horticulture, Faculty of Agriculture and Environment, Agricultural University of Tirana
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long run because at the moment constitutes 70% of the total of farms. Even in the new
plantings of fruit trees during 2007, out of 1045 farmers in 8 regions of the country, only
6.5% of the surface was planted intensively (for olives more than 400 trees/ha, for fruit
trees more than 600 – 800 trees/ha, etc.). Out of 500 fruit farms in the coastal area of
Vlora, only 14 can be considered specialised. In this study, by analysing economical and
financial indicators collected in eight communes of Vlora district to identify the best
model of a mixed farm.
Material and Methods
This study covered fruit farms located in the coastal, central and mountainous area.
The Vlora region under study has been divided into three zones depending on altitude, 0
– 150 m, 150 – 200 m and 250 – 400m. Each zone has been further divided into subzones
depending on the slope of the terrain, < 5%, 5 – 15% and > 15% which is an
important determinant of the technology applied. A total of 71 fruit farms were
included, totalling a surface of 133.52 ha. Out of this surface, 91.28 ha or 68.36% is
planted with fruit trees, vineyards and olives. The rest is allocated to accessory activities
like crop and animal production as well as fruit tree nursery. Thirty-two out of 39 farms
cultivated two or three species of fruit trees. About 37.1% of the surface planted with
trees has not entered into production yet.
To identify the most opportune type of farm for each zone and sub-zone we have
collected the following indicators using a structured questionnaire during the period
2008 - 2009: species and surfaces, yields, cost and price of fruit tree products, total
incomes from fruit trees and accessory activities, technology used, use of labour,
sources of funds, etc.
Results and Discussion
Farms have been classified according to the altitude and slope into the pre-defined
categories (Table 1).
Table 1. Farms, surface and number of trees by zones and sub-zones.
Zone Subzone
No. of
farms
Surface
(ha)
Surface (ha) with plants
in
Number of trees in
growth production growth production
1 (÷5%) 24 36.90
I
2 (5-15%) 7 7.98
3 (>15%) 8 9.1
Total* 29 53.98 18.70 35.28 5087 4247
1 (÷5%) 7 6.80
II
2 (5-15%)
3 (>15%)
not analysed due
to small no. of
farms
Total 9 11.90 9.20 2.70 2426 296
1 (÷5%) 26 21.4
III
2 (5-15%) 9 4.60
3 (>15%)
Total 33 26.00 13.6 12.1 2931 1794
* Total farm no. is not the sum of individual farms because some extend to more than a sub-zone.
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From the data processing, mixed fruit farms have been categorised in different
variants for each zone and sub-zone. Such variants or typologies have been then
compared between them within the sub-zone, between sub-zones of a zone and between
zones. Due to space constrictions of this publication we have listed them rather than
showing in a table.
Zone 1 Sub-zone 1: Fruit+Crop+Livestock (V1); Fruit+Livestock (V2); Fruit+Seedling
prod. (V3); Grape (V4); Grape+Olive+Livestock (V5); Olive (V6); Grape+Seedling
prod. (V7); Grape+Olive+Livestock+Crop (V8); Grape+Olive (V9);
rape+Fruit+Livestock+Crop (V10); Grape+Fruit+Olive+Livestock+Crop (V11).
Zone 1 – Sub-zone 2: Grape+Fruit+Olive+Crop (V12); Grape+Olive+Crop (V13).
Zone 1 – Sub-zone 3: Olives (V6); Grape+Olive (V9); Grape+Fruit+Olive (V14).
Zone 2 – Sub-zone 1: Fruit+Livestock (V2); Grape+Olive (V9); Grape+Fruit (V15);
Grape+Livestock (V16); Grape+Crops+Livestock (V17).
Zone 3 – Sub-zone 1: Fruit+Crop+Livestock (V1); Grape (V4); Olive (V6); Fruit (V18);
Grape+Fruit+Olive+Livestock (V11); Grape+Livestock (V16); Olive+Crop+Livestock
(V17).
Zone 3 – Sub-zone 2: Grape+Fruit+Olive+Crop (V12); Grape+Livestock (V16);
Olive+Crop+Livestock (V17); Olive+Livestock (V19).
Tab. 2. Comparison of data between variants within a sub-zone (Zone I, Sub-zone 1)
Farm typology
(variant)
Total
Income
Income
from
fruit
Total
expenditure
Net
Income
Income
per ha
Income
per
capita
V1 - FR+CR+LV 3146 3116 2044.9 1101.1 389.5 61.2
V2 - FR+LV 620 435 403 217 435 36.2
V3 - FR+SP 6000 - 4200 1800 6000 300
V4 - GR 5763 5763 3857.7 1905.3 1405.6 52.9
V5 - GR+OL+LV 585 485 320.1 264.9 1212.5 44.2
V6 - OL 750 750 472.5 277.5 375 23.1
V7 - GR+SP 3688 888 2618.5 1069.5 2634.3 89.1
V8 - GR+OL+LV+CR 1630 1398 922.7 707.3 735.8 58.9
V9 - GR+OL 850 850 561 289 425 16.1
V10 - GR+FR+LV+CR 845 683 566.2 278.9 569.2 46.5
V11-GR+FR+OL+LV+CR 758 715 471.9 286.1 446.9 23.9
Total/Average 24635 16438.5 16438.5 8196.6 1329.9 68.4
In Sub-zone 1, income from fruit production (incl. olive and grapevine) accounts for
61% and income from accessory activities 39%. Specialised fruit farms account for
27.6% and the mixed ones 72.4% of the total farms studied. This ratio shows clearly that
the majority of the farms are family farms. According to Table 2, the financial data for
variants V1, V3, V4 and V7 have a higher value than the average of the sub-zone and
the zone.
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Tab. 3. Comparison of data between variants within a sub-zone (Zone I, Sub-zone 2)
Farm typology
(variant)
Total
Income
Income
from
fruit
Total
expenditure
Net
Income
Income
per ha
Income
per
capita
V12 - FR+OL+GR+CR 1035 915 703.8 331.2 419.7 27.6
V13 - OL+GR+CR 817 717 555.6 261.4 199.2 10.9
Total/Average 1852 1632 1259.4 296.3 309.5 19.3
In Sub-zone 2, 7 farms have been studied totalling 7.98 ha planted with fruit trees
and grapevine. While the cost and price of the fruits is similar to that of Zone 1, the cost
of olive and grapevine are 31.3% and 8.5% higher respectively.
Table 3 shows clearly the higher profitability of farms belonging to V12 against
V13. In this Sub-zone, grapevine contributes with the highest income (47.1%), then
olives (27.3% and fruit trees 25.6%). Incomes from accessory activities derive mainly
from vegetables and arable crops. Such situation is mainly influenced by the high
fragmentarisation of agricultural land and the small farm surface (1.14 ha), lack of
manpower compared to Sub-zone 1. Moreover, the sustainability of new fruit farms in
more remote areas is hardly achieved due to the lack of mechanisation and irrigation.
Tab. 4. Comparison of data between variants within a sub-zone (Zone I, Sub-zone 3)
Farm typology
(variant)
Total
Income
Income
from
fruit
Total
expenditure
Net
Income
Income
per ha
Income
per
capita
V14 - FR+OL+GR 625 625 560 187.5 390.6 31.3
V16 - OL 511 511 352.6 158.4 118.8 4.4
V9 - GR+OL 975 975 555.6 415 571.4 69.2
Total/Average 2111 2111 1468.2 253.6 360.3 35.0
Variant 9 of Sub-zone 3 has similar costs with the average of Sub-zone while the
sale prices of olive and grape are 11.9% and 39.2% higher respectively than the average
of the Sub-zone. In Table 4 one can easily notice the much smaller incomes of V16
compared to V14 and V9 due to the lack of cultural practices applied to olives in high
slope terrains.
Tab. 5. Comparison of data between variants within a sub-zone (Zone II,Sub-zone 1)
Farm typology (variant)
Income Total
Income
Total
Net Income
from expenditure
per
Income
Income per ha
fruit
capita
V17 - GR+CR+LV 894 270 610.5 283.6 675 23.6
V9 - GR+OL 634 634 431.1 202.9 333.7 16.9
V16 - GR+OL+LV 314 264 219.8 94.2 660 15.7
V2 - FR+OL+LV 514 364 359.8 154.2 364 25.7
V15 - GR+FR+OL 450 450 315 135 450 22.5
Total/Average 2806 1982 1936.2 253.6 496.5 20.9
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Tab. 6. Comparison of data between variants within a sub-zone (Zone III,Sub-zone 1)
Farm typology (variant)
Income Total
Income
Total
Net Income
from expenditure
per
Income
Income per ha
fruit
capita
V18 - FR - - - - - -
V1 - LV+CR+FR 640 40 336 304 100 25.3
V16 - GR+LV 1200 760 816 384 844.4 21.3
V4 - GR 3410 3410 2318.8 1091.2 757.7 25.9
V6 - OL 100 100 65 35 500 5.8
V17 - LV+CR+OL 145 100 58 87 - 14.5
V11-FR+OL+GR+CR+LV 2115 1640 1404 710.6 364.4 23.7
Total/Average 7610 6050 4997.8 2611.8 513.3 27
In this Sub-zone, with 9 farms studied totalling 4.6 ha (average 0.51 ha per farm),
88.5% of the incomes are generated from fruit production (incl. olives and grapevine)
and 11.5% from accessory activities. Grapevine has the highest share of income with
74.9%, fruit trees 19.5% and olive 4.9%. On the contrary to the previous zones, income
from livestock has the highest share (66.3%) among the accessory activities. The fact
that in some variants (V1, V16 and V17) incomes are mostly generated by accessory
activities (93. 8%, 36.7% and 60.4% respectively), shows that fruit growing is not
established yet, similar to Zone II. Activities like livestock are an important source of
income to contribute to the sustainability of such mixed farms.
Based on the above-shown analysis, V16 farms are performing better compared to
incomes per farm and incomes per ha (2 times more than the average of the sub-zone,
46.4% more incomes per ha, 5.4 times more net incomes per farm and 23.7% per capita
incomes).
Tab. 7. Comparison of data between variants within a sub-zone (Zone III,Sub-zone 2)
Farm typology (variant)
Income Total
Income
Total
Net Income
from expenditure
per
Income
Income per ha
fruit
capita
V16 - GR+LV 2310 1350 1617 693 750 21.3
V19 - OL+LV 250 - 100 150 - 5.8
V17 - OL+CR+LV 700 100 378 322 166.7 14.5
V12 - FR+OL+GR+CR 200 100 136 64 36 23.7
Total/Average 7610 1550 2231 1229 513.3 27
Based on the analysis, V16 farms again are performing better compared to incomes
per farm and incomes per ha. However, V19 and V17 with incomes coming mainly
from the livestock sector, have higher net incomes per farm and incomes per capita from
the other variants as well as the average of the Sub-zone.
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Tab. 8. Comparison of data between variants between different sub-zones of the
same zone
Farm typology (variant)
Income Total
Income
Total
Net Income
from expenditure
per
Income
Income per ha
fruit
capita
V6-I1 – OL 750 750 472.5 277.5 375 23.1
V9-I1 – GR+OL 850 850 561 289 425 16.1
V6-I3 – OL 511 511 352.6 158.4 118.8 4.4
V9-I3 – GR+OL 975 800 555.6 415 571.4 69.2
*Difference I1-I3 (+/-) (V6) 239 239 119.9 119.1 256.2 18.7
**Difference I1-I3 (+/-) (V9) -125 50 5.4 -126 -146.4 -53.1
* Statistically significant for α = 0.05
** Non significant
As far as regards the comparison between the same variants in the three areas, we have
not found them!
Conclusions
The study shows that mixed farm typology dominating are family-based. They serve
to sustain the family and for the time being is the most appropriate for agricultural
development in our country.
Referred to the data for Sub-zone 1 of Zone I, we found that accessory activities
drastically reduce the farm’s economic effectiveness. Moreover, it is clear that under the
current organisation structure, fruit farm typologies with higher effectiveness in this
Sub-zone (< 5% slope) are farms with one accessory activity (for the same surface,
these farms generate 1.74 times more incomes than the specialised ones). In typologies
with two or three accessory activities, incomes are reduced by 1% compared to those of
typologies with one accessory activity. Gradually, fruit farms should move toward their
specialisations. Therefore, on the basis of incomes and the ratio between fruit species
and accessory activities, the most effective farm typologies are: V1 (FR+CR+LV), V3
(FR+SP), V7 (GR+SP) and V4 (GR).
Based on the indicators of income, the most effective typology for Sub-zone 2 of
Zone I is V12 (GR+FR+OL+CR).
In Sub-zone 3 of Zone I, the highest yields of V6 and V9 come from fruit trees and
grapevine which have not entered yet into production, while olives trees planted after
1990 have entered recently into production. Therefore, the economic data of V14 show
the real situation of the farm in this sub-zone.
Analysis of the data of Zone II, Sub-zone 1 shows that grapevine farms have a
higher effectiveness, which seems the most appropriate activity for this sub-zone. Thus,
the variant GR+CR+LV can be defined as the most appropriate farm typology of this
Zone until the farms with fruit trees will be fully consolidated.
According to the indicators analysed of Sub-zone 2 of Zone III, farms with higher
effectiveness in these sub-zone are the combination of fruit trees (including grapevine
and olive) with livestock as accessory activity.
References
MBUMK (2009). Statistical Yearbook 2008. Kristalina KH Tirana
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