Analyze the Relationships Between Inputs and Scale Economies in Potato Production in Ardabil Province

Abstract

Potato is one of the agriculture important products in Ardebil province that about 24 thousand hectares of land in this province allocated to this product. Based on available evidence, consumption of inputs in the production process in this region is not optimal and producing does not do according to the principles of production economics. This study aims to explain the production structure and the economies of scale. the required data collected by questionnaire from 156 Ardebil potatoes farmer in 1389 year. To this end, the Translog cost function with cost share equations was utilized by SURE technique. Results showed that own price elasticities of seed, labor and machines inputs are negative, and the labor and seed inputs have complementary relationship with machine input, while water input has substitution relationship with seed, labor and machine inputs. Finally, the cost elasticity is 0/69 which indicates there is economies of scale in the process of production.

Keywords

• Ardebil
• Cost elasticity
• Potato
• Production structure
• Translog cost function