ANIMAL

Estimation of the optimal cultivation area for apples by region

Cheong-Ryong  Lim1   Uhn-Soon  Gim2   Jae-Hwan  Cho3,*   

1Rural Research Institute, Korea Rural Community Corporation, Naju 58327, Korea
2Department of Agricultural Economics, Chungnam National University, Daejeon 34134, Korea
3Department of Food and Resource Economics, Pusan National University, Miryang 50463, Korea

Abstract

A model is developed for estimating optimal cultivation areas for apples to maximize the total profit of apple farming by region, focusing on Gyeongsangbuk-do, Chungchungbuk-do, Gyeongsangnam-do, and Jeonllabuk-do in Korea. Comparing the current cultivation areas to the optimal areas according to the model estimation during the period 1999 - 2019, the former has exceeded the latter since 2015 in all regions except for Jeonllabuk-do. This result stems from a lack of the regulation of production quantity among apple producers’ regional organizations. Accordingly, the decreasing rate of the market price was greater than the increasing rate of the production quantity, and the total profit of apple farming has fallen in conjunction with increasing agricultural wage rates. Therefore, in order to reverse the current decreasing trend in the profits of apple farming, it is necessary to regulate nationwide apple cultivation areas through regional producers' associations. Ex-ante forecasting for 2019 posits the following regional optimal cultivation areas for maximizing the total income from apple farming. The Gyeongbuk apple producers’ association needs to reduce its current cultivation area by 1,089 ha and to maintain 18,373 ha. In the Chungbuk region, current cultivated area should be reduced by 1,027 ha to maintain 2,722 ha, and in the Gyeongnam region, the current cultivated area should be reduced by 582 ha to maintain 2,730 ha. In contrast, the Jeonbuk region needs to increase its current cultivation area by 174 ha and to maintain at a level of 2,872 ha.

Figures & Tables

Fig. 1. Actual and optimal apple acreage of Gyeongsangbuk-do.