Financial aspects of pepper (Capsicum annuum L) production on family farms in Serbia

Abstract

In the structure of agricultural production in the Republic of Serbia, crop production is dominant, while the share of vegetables in crop production is small (about 3.5%). According to the research conducted by the Institute for the Application of Science in Agriculture during 2015-2019, one of the most profitable vegetable production is pepper production. The aim of this paper is to investigate the financial aspects of pepper (Capsicum annuum L) production as one of the most common vegetable crop in the Republic of Serbia, and to assess its economic viability. The following methods were used: survey, comparison, desk research, gross margin calculation and sensitivity analysis. Sensitivity analysis showed that in addition to the yield, the price also has a great influence on the amount of the gross margin. The price risk would be reduced if there were "contracted agricultural production", which would improve the profitability and sustainability of pepper production.

Keywords

• gross margin
• variable costs
• family farms
• sustainability
• competitiveness