Projected impacts on growers, processors, and consumers from mechanical strawberry harvesting Public Deposited

http://ir.library.oregonstate.edu/concern/graduate_thesis_or_dissertations/6d56zz65t

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  • Oregon has grown strawberries commercially since the early 1900's. More than 90 percent of strawberries produced in Oregon has traditionally been delivered to processors. The strawberry acreage has declined from a high of 18,300 acres in 1957 to the lowest level of 5,000 acres in 1978. The increasing harvest costs and the difficulties in procuring hand-pickers are hypothesized to be the main reasons for decreasing the Oregon strawberry acreage and production. In an attempt to solve these problems, since 1967 Oregon has put considerable efforts into mechanization of strawberry harvesting. The objectives of this thesis are to estimate the economic feasibility to Oregon growers of mechanically harvested strawberries, and to estimate net social benefits (or costs) that could be expected from adopting this new technology in strawberry harvesting. The structural model consisting of supply and demand for strawberries for processing are derived based upon the assumption that growers sell strawberries under perfect competition, and processors purchase strawberries under oligopsonistic imperfect competition. Cross-sectional data across eight major strawberry producing counties over the period 1962 - 1978 were pooled in the estimation of the parameters. The estimated supply and demand equations for strawberries were used for estimating net social benefits (or costs). Present values of net social benefits are estimated and compared by applying formulas used by Lindner and Jarrett, Griliches, and Peterson. The results indicated that the distribution of welfare resulting from adopting new technology in strawberry harvesting vary, depending not only on the nature of the supply shift but also on the price elasticity of demand. Since the demand for strawberries for processing was very inelastic, the shift of the supply curve to the right would result in greater benefits to processors than to growers, and growers could even be worse off if a pivotal shift in the supply curve should occur. The present values of net social benefits which would be expected from mechanization of strawberry harvesting ranged from $39 million to $918 million depending upon the nature of the supply shift and the formula used to estimate social benefits. The results also indicated that mechanization of strawberry harvesting may be more profitable to growers than hand-picking under certain assumed conditions. However, some caution is needed in interpreting the results obtained in this thesis. For instance, specific prices for some grades of mechanically harvested strawberries have not yet been officially established, which adds uncertainty to the economic comparisons between mechanical harvesting versus hand-picking.
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