ECONOMIC EFFICIENCY ASSESSMENT OF INVESTMENTS IN AGRICULTURAL PRODUCTION

Authors

DOI:

https://doi.org/10.59267/ekoPolj230161K

Keywords:

investment evaluation, corn and soybean cultivation

Abstract

The purpose of this study is to assess the economic benefits of agricultural production and provide guidance to manufacturers and investors interested in agriculture. This paper applies dynamic efficiency evaluation methods i.e. net present value, profitability index, and internal rate of return, together with the sensitivity analysis that is useful in cases of market turbulences. The presented investment is purchasing 10 hectares of arable land and cultivating two alternative crops: corn and soybeans. Research results and projections imply that both scenarios are acceptable and economically profitable with the preference for the cultivation of corn giving better economic efficiency. This study can provoke further investment evaluations with dynamic capital budgeting methods in other crops or implementation of mechanization in agricultural production.

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Author Biographies

Boris Kuzman, Institute of Agricultural Economics, Belgrade, Serbia

 

 

Mirela Momčilović, Novi Sad Business School, Novi Sad, Serbia

 

 

Dajana Ercegovac, Novi Sad Business School, Novi Sad, Serbia

 

 

Dragana Milić, Novi Sad Business School, Novi Sad, Serbia

 

 

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Published

2023-03-31

How to Cite

Kuzman, B., Momčilović, M., Ercegovac, D., & Milić, D. (2023). ECONOMIC EFFICIENCY ASSESSMENT OF INVESTMENTS IN AGRICULTURAL PRODUCTION . Ekonomika Poljoprivrede, 70(1), 61–79. https://doi.org/10.59267/ekoPolj230161K

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Section

Original scientific papers