Direct and indirect effect of increase of yield: which is bigger?

Abstract

The purpose of the article – to provide methodological instruments for calculating direct and indirect economic effects of an increase in the yield of agricultural crops. The article presents a mathematical link between the cost of production, revenues and crop yield and demonstrates the interrelation mechanism between the crop yield and the cost of production on the output level of grain crops. The article also shows the dependency of output from the level of the grain crop yield, elaborates on the structure of a direct and concurrent effect from the growth of crop yield. It also presents a calculation algorithm for the level of the crop yield providing a predetermined level of profitability on crop output. The article explains the interrelation mechanism between the marginal revenue and the marginal crop yield. It is proved that the reserves of growth of efficiency of land use in agriculture consist in relative to save costs per unit of product.

Keywords

• economic effect
• crop yield
• hectare
• cost of production
• revenue
• fixed and variable costs
• sales price.