Is pistachio cultivation still economical?
In recent years, the productivity of pistachio production in the country has decreased to about 700 kg per hectare.
Dr. Reza Sedaghat, a member of the Faculty of Agricultural Economics, Pistachio Research Institute, said: Unfortunately, due to various technical and economic reasons, such as the occurrence of long droughts and as a result of quantitative and qualitative reduction of agricultural water resources, In the country it has reached a very low level (about 700 kg) per hectare; Also, the cost of pistachio production, due to high inflation in the Iranian economy, has increased year by year, while the price of pistachios affected by world prices, has a relatively stable trend.
He added: The implementation of several research projects in the country’s Pistachio Research Institute has shown that if we consider the investment opportunity cost for an ordinary farmer to be at least 18% (long-term deposit interest rate) and if we consider pistachio production a long-term activity with at least 50 years useful life. Considering also all the initial investment costs and annual running costs on the one hand and the benefits of selling the product on the other hand, the rate of return is less than the minimum rate expected by manufacturers and about 13% for the most important business figures. It is pistachio.
He added: If the current economic conditions are to continue in the future, any new investment in the production of this product does not have the necessary economic justification.
Sedaghat further acknowledged: Only if the costs of pistachio production or the expected interest rate decrease or the profits from the sale of the product increase as a result of improving productivity, price improvement or reducing production and market risk, expect a rate of return increase. And becoming a profitable long-term activity is not far from expectation, but in the current situation, these two seem very difficult and require firm determination and prudent effort on the part of producers and officials.
A member of the faculty of agricultural economics of the country’s Pistachio Research Institute added: If we look at pistachio production with a short-term view, or in simpler terms, in our economic analysis, only consider the annual running costs, the net return is a positive sign and therefore continue. Giving the production and investment process in the short term in the previously built gardens can be justified.
He added: Any new investment is economically justified if it is possible to harvest at least an average of 835 kg per hectare of dried pistachios or if the current performance of the selling price of the product increases by about 20%.
Sedaghat added: Yield per hectare in pistachio orchards is very low compared to the existing potentials and in comparison with competing countries, and it seems that increasing it by using the methods tested in the past is not very effective in this regard, reforming the market structure of inputs and products. It can be recommended by concluding reciprocal contracts between market players and farmers (contract farmig).
He further said: Optimal use of agricultural resources and thus reducing production costs can be suggested as a second solution. In this regard, for example, proper management of agricultural machinery in the form of agricultural mechanization cooperatives and improving sales prices and reducing market risk It is also important that it can provide the necessary ground for improving the return on investment in pistachio production, and to achieve this can be concluded by concluding reciprocal contracts along with a comprehensive product insurance program, and of course in a macro view improve the economic conditions of society and in The result of lower inflation and expected investment interest rates is also of particular importance.
