A Life Cycle Cost Analysis—Relevant Method Supporting the Decision to Establish an Apple Orchard in an Organic System

Abstract

The life-cycle cost analysis is a method used to assess long-term economic efficiency among equivalent competing processes or products. The purpose of this paper is to investigate the nature and level of costs for an organic orchard located in Southern Romania, using a complex approach covering the entire chain of production, through its life span. The research results, based on a dynamic analysis and an integrated evaluation of the orchard’s performance, were ranked on investment and operational costs and broken down into three categories (establishment, production, post-harvest, transport costs). The highest costs, representing 151,726 EUR/ha/20 years, about 52.72% of the total operational costs and 50.4% of the total farm costs/ha/20 years, were recorded in the exploitation stage. The scenarios for the sensitivity analysis considered different levels of average yields (40 and 60 tons/ha, respectively) with different rates of sold productions (85%, optimistic scenario; 70%, pessimistic scenario). The hot points identified at the production stage were the use of agricultural machinery, several pesticides, the costs of seedlings, anti-hail nets, plastic boxes, and labor costs, while at the post-harvest stage, there were those related to labor and energy consumption. The transport stage had important costs with respect to tractor operations and the track.

Keywords

• orchard
• apple
• organic
• costs
• performance
• Romania