PR - FULL COST ANALYSIS OF MAIN SWISS ARABLE CROPS

Abstract:

The analysis of Swiss arable farms' full production cost by using a maximum entropy approach to allocate joint costs to particular farm activities exhibits considerable cost differences between farms. These cost differences emerge for total production cost and particularly regarding the cost categories direct, machinery and labour cost. Within these, machinery cost is the major joint cost position with a high coefficient of variation indicating potential savings. The difference between the machinery cost of the quarter of farmers with lowest and the quarter with highest total production cost amounts to CHF 1,671.- per hectare. Therefore, Swiss farmers, farm advisors and agricultural policy should focus on this cost category to cut production cost and hereby increase farm profitability.

Keywords: Full cost analysis; maximum entropy; joint costs; disproportional cost allocation; arable farming; Switzerland