DBPapers
DOI: 10.5593/SGEM2016/B53/S21.013

COMPARATIVE STUDY OF THE BREAKEVEN POINT IN ORGANIC FARMS OF VARIOUS ECONOMIC SIZES

G.Costaiche, A.Chihaia, C.Buzatu, I.Niculae
Wednesday 7 September 2016 by Libadmin2016

References: 16th International Multidisciplinary Scientific GeoConference SGEM 2016, www.sgem.org, SGEM2016 Conference Proceedings, ISBN 978-619-7105-67-4 / ISSN 1314-2704, June 28 - July 6, 2016, Book5 Vol. 3, 99-106 pp

ABSTRACT
Organic farming is geared towards the production of agricultural produce with high nutritional qualities, without residues or with very low (trace) levels of pesticides and nitrates. Based on sustainable agricultural production systems, organic farming proves that holding is economically viable, meets the exigent demands for healthy food and higher quality, guarantees the protection and enhancement of natural resources in the long run and forwards them unspoiled to future generations. Organic farms use crops and varieties that are well adapted to the environment, with a program of balanced fertilization, in order to maintain fertile soils with high biological activity, rotations of crops adapted to local conditions, associated cultures, green manures and other acknowledged organic practices. This paper addresses the issue of establishing the breakeven point in this type of farms, making a comparative analysis of organic vegetable farms of different economic dimensions in the South Region Muntenia. This analysis is based on data provided by the Ministry of Agriculture and Rural Development and on data from the Ministry of Public Finances as operators for 2014. The methods of analysis used in this study are: comparison, indexes method, the method for determining the economic size of holdings. Breakeven analysis as a method of forecasting profit for changes in activity and production levels was also used. The indicators used for this study were: the balance point value (Critical Turnover), the safety range, the safety dynamic index, the coverage factor and the sampling index. After calculations it can be seen that the semi-subsistence farm has a critical turnover far above the obtained turnover, most of the turnover being used to cover fixed costs. Regarding small and medium commercial farms, they are in the safe range, managing to cover fixed costs and achieve profit. It can be noted that they can reduce their sales volume by 7.87% and 4.22% to reach the critical threshold. In conclusion, the agricultural holding that obtains the best level of achievement for the specific breakeven indicators is the small commercial farm.

Keywords: breakeven point, organic farm, Romania