Economic analysis of pear orchard establishment

Abstract

As a fruit crop, the pear is preferably grown and esteemed for its high utility value. Over recent decades, there have been great fluctuations in both quantity and quality of the pear fruit for a variety of reasons (obsolete growing technology, cultivar diversity, increased fire blight attacks, market instability, etc.). Given the favourable environmental conditions in Serbia and pear fruit shortage on domestic and foreign markets, producers' interest in pear production has increased in the last several years. The economic performance of a pear orchard is largely dependent on market conditions and pear marketing possibilities. Establishing a pear orchard requires a comprehensive analysis of agroeconomic conditions which govern both the choice of cultivars and orchard size. Therefore, the objective of this study was to analyse pear orchard establishment costs. Two cultivars were used i.e. 'Williams' and 'Santa Maria'. The results of the agroeconomic analysis show that the investment costs of establishing a 1 ha orchard amount to €8,975.75. Orchard management costs are €2,020.25 in the first year, €1,803.25 in the second year and €3,026.00 in the third year. Total investment costs associated with orchard establishment and management during the first three years are € 18,510.25. Management costs for a fully productive orchard are €4,657.00. The return on investment, along with profit, is achieved in the fifth year. If the intensive orchard produced a yield higher by 35% than the average yield projections, as typical of high-density production systems, the return on investment would be achieved in the fourth year.