Risk and Return Analysis of Open-Field Tomato Grown in Turkey: A Monte Carlo Simulation Approach
Kubilay Ucar1, Sait Engindeniz1* and Jozef Palkovic2
Agricultural production and crop choice decisions of the farmers are affected by the risk in price, cost, and yield outcomes. One of the products that are grown in irrigable lands and has high returns is tomato. The aim of this study is to analyze production costs, return and the risks associated with open-field tomato grown in Izmir province of Turkey in 2011-2017 period. Statistical data used in the study have been obtained from FAOSTAT, Turkish Statistical Institute and Turkish Ministry of Agriculture and Forestry. According to the results of the study, the average production costs of tomato was determined to be 4,940 US$ ha-1. Average gross and net return were calculated to be 4,282 US$ ha-1 and 3,284 US$ ha-1, respectively. Monte Carlo Simulation for tomato production was performed based on the values of input variables. According to results of these simulations, the gross return can be expected between 2,968 US$ and 5,912 US$ ha-1, and net return can be expected between 1,483 and 5,384 US$ ha-1. Risk factors that significantly influence the tomato production are the production amount, total costs and variable costs.