Economic profitability in conventional and irrigated coffee production systems in three municipalities in the Marilia region of Sao Paulo, Brazil

Abstract

The objective of this study was to evaluate the economic benefit of coffee cultivation, with a focus on the distinction between conventional and irrigated coffee production systems. For the development of the study, the various productive systems were delineated from the data provided by a sample of producers to generate a matrix of average technical coefficients. The methodology used to estimate the operating cost of production is the one used by the Instituto de Economia Agricola (IEA). Profitability indicators were also evaluated. Results indicated that the effective operational cost (EOC) incurred in the irrigated production system is higher than that in the conventional system. As regards the cost composition, in the conventional coffee production system, the largest cost incurred is on fertilizers among all inputs, whereas in the irrigated production system, the largest cost incurred is on machinery and equipment that are mainly used in harvesting, for the period 2013-2015. Profitability index of the conventional coffee production system in 2015 was 44.8%, and that of the drip irrigated production system was 49.7%. In 2014, profitability rates were negative for both the conventional (-13.9%) and irrigated coffee production systems (-8.6%). The most preferable choice was found to be the irrigated production system, as it allows reducing the risk of loss in production during prolonged periods of water shortage as well as greater yields due to a larger production of grains.