Economic impacts of investments in value-added products

Abstract

Stone fruit plantations constitute more than two-thirds of all fruit plantations in Serbia (approximating to 67%), whereas plum plantations account for two-thirds of all stone fruit plantations in the country. Stone fruit production is commonplace in all parts of Serbia. There are large areas of extensive fruit plantations in Western Serbia and Šumadija (Valjevo, Kraljevo, Užice, Bajina Bašta and Kragujevac), whereas the largest fruit plantation areas are in the municipalities of Grocka, Smederevo, Prokuplje, Topola and Valjevo. Plum plantations are estimated to claim the biggest share of extensive fruit plantations in Serbia. A value chain is a powerful tool for increasing the added value of products. It represents a synthesis of activities carried out by a business organization in order to produce, pack, design, market, deliver and support its products. In the production of dried plums with stones, with an average production of 112 kg/day and an average selling price of 350 RSD/kg, the realized profit amounted to 18,237 RSD/day (for 24 hours of drying). With an average drying ratio of 4:1 (100 kg of fresh plums yield 25 kg of dried plums with a moisture content of 26 %), the added value of dried plums is increased approximately 6 times compared to fresh plums. According to the economic indicators calculated in the organic production of plums, a positive financial result (profit) of 3.940 €/ha was achieved. The cost price of plum production was 0.16 €/kg, and the selling price was 0.38€/kg. As the organic production of plums generates profit and the cost price per unit of measure is significantly lower than the purchase price of plums (0.16 €/kg < 0.38 €/kg), the organic production of plums is economically justified for the producer.

Keywords

• value-added products
• dried plums
• investments
• impacts