Agricultural Economics and Development

Agricultural Economics and Development

The Effect of Integrated Scheduling of Production and Distribution on the Profit of Tomato Farms: A Case Study of Beyza County of Iran

Document Type : Original Article

Authors
Hadis Sadat Dabiri 1
Zeinab shokoohi 2
Mansour Ziebaie 3
Mohammad Hassan Tarazkar 4
1 M.Sc. student of Agricultural Economics, Department of Agricultural Economics, School of Agriculture, Shiraz University, Shiraz, Iran
2 Assistance professor of Agricultural Economics, Department of Agricultural Economics, School of Agriculture, Shiraz University, Shiraz, Iran
3 Professor of Agricultural Economics, Department of Agricultural Economics, School of Agriculture. Shiraz University, Shiraz. Iran
4 Associate professor of Agricultural Economics, Department of Agricultural Economics, School of Agriculture, Shiraz University, Shiraz, Iran
10.30490/aead.2025.367359.1649
Abstract
Introduction: Price fluctuations in the agricultural sector are influenced by various factors, such as low shelf life, high degree of perishability, large volume, seasonality, and dependence on weather conditions. These characteristics make the agricultural sector more susceptible to price changes compared to the industrial sector. Managing price fluctuations of agricultural products is crucial for increasing the profitability of farmers. This can be achieved through integrated planning of production and distribution within the sector. Making separate decisions in production and distribution does issues not necessarily lead to optimal profit maximization. Neglecting the integrated planning of production and distribution in the supply chain of agricultural products with special features can result in a decrease in product quality, low profitability for farmers, and consumer dissatisfaction. The concept of integrated production and distribution planning is a strategic approach that aims to improve competitiveness in the production and distribution of goods and services. This involves making coordinated and coherent decisions to meet customer needs and satisfaction, while also optimizing other supply chain objectives such as costs and profits. By utilizing a mathematical programming model, businesses can identify the most profitable market and make informed decisions about the flow of materials, goods, and financial information throughout the supply chain. This includes suppliers, manufacturers, warehouses, and retailers, with the goal of optimizing production and supply in terms of quantity, time, and location. Therefore, this study aimed at investigating the impact of integrated scheduling of production and distribution on the profitability of tomato farmers in Beyza (County) region of Iran. 
Materials and Methods: In this study, a mathematical programming model was utilized to achieve the above-mentioned goal. Then, according to the average temperature information and the harvesting limitations of the region, a different strategy for planting and harvesting tomatoes was extracted. To accurately determine the expected price, it is necessary to consider both the trend component and the seasonal behavior of the price. This can be achieved by first calculating the actual price and then, incorporating the lowest, highest, and average prices for each week into the model. These three scenarios, representing optimistic, pessimistic, and average expectations, will provide a comprehensive understanding of the expected price. So, the markets analyzed in this study were selected based on the availability of price information in each county. These markets included West Azerbaijan, Ilam, Bushehr, Razavi Khorasan, Sistan and Baluchistan, Kurdistan, Kerman, Kermanshah, Lorestan, Mazandaran, Markazi, Hormozgan, Hamadan, Fars, and Tehran provinces.
Results and Discussion: The study results showed that for small farms, the profit varied greatly depending on the price scenarios. In the pessimistic scenario, the farmer could earn 600 million IRI rials per hectare by using the third tomato strategy and selling both harvests in the Bushehr market. However, in the optimistic scenario, the farmer could earn 3690 million IRI rials per hectare by using the first strategy and selling the first and second harvests in Bushehr and Kermanshah markets, respectively. The selected small farmer with one hectare of land earned a realized profit of 14650 million IRI rials per hectare by selling at the farm gate in 2023. Comparing the optimization results of the model with the average expected price scenario, it was evident that the potential profit increased by 40 percent. In the group of large farmers, it was determined that the most profitable harvesting strategy would be on a weekly basis. In the pessimistic price scenario, the estimated profit for choosing tomato strategy 18 was 8450 million IRI rials per hectare. In the moderate and optimistic scenarios, the estimated profit for choosing tomato strategy 16 was 2560 and 4776 million IRI rials per hectare, respectively.    
Conclusion and Suggestions: The study results showed that there were significant differences in profits among the three groups of farmers, depending on the price scenarios; for instance, small farms had much higher profits in the optimistic scenario compared to the pessimistic one, with a difference of over six times. This could be attributed to varying price expectations, which in turn would influence planting and harvesting strategies. Other factors such as yield, harvest time, and price levels also contributed to the differences in profitability. This highlighted the high volatility of profits in the market for this particular product. However, due to the nature of agricultural production, especially for products like tomatoes, it is not always possible to make optimal decisions based on real market prices. As a solution, it is recommended to implement various types of income insurance to manage market risk for this group of farmers. This is crucial, because fluctuations in net income can decrease farmers’ motivation to improve production technologies. In addition, agricultural extension workers may play a crucial role in facilitating communication with farmers, particularly those who own large farms. Through this collaboration, the findings of studies might be effectively disseminated and the strategies for utilizing them could be implemented. This connection between production and research centers has the potential to significantly increase farmers’ income and promote sustainable development.
Keywords
Expected Prices
Planting and Harvesting Strategies
Selected Markets
Supply Chain

Subjects

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