Agriculture Reference
In-Depth Information
Economics of Hemp
Pierre Bouloc
La Chanvriere de L' Aube (LCDA), France
8.1 Introduction
8.2 Information Sources
and Documents Used
The primary objective of this chapter is to ena-
ble any reader with an interest in agricultural
production to evaluate production costs, rev-
enues and profitability.
The methodology presented here is not
original, for it can be applied to almost any
crop regardless of the continent on which it is
grown. It involves an evaluation of the costs of
production and revenue generated expressed
per hectare of land cultivated and per tonne of
crop harvested.
The proposed approach is to be com-
mended, for the required data can be collected
easily and lends itself easily to international
comparisons.
In order to calculate margin per hectare,
we will therefore address:
The information sources drawn on for this
chapter include:
1. The OCERA (
Office de Comptabilité et
d'Economie Rurale de l'Aube
).
2. A study undertaken by a French doctoral
student, Thomas Bourguignon, at the University
of Wageningen, Holland, and entitled
'Profitability Evaluation of Hemp Production in
France and The Netherlands' (April 2004).
3. Data supplied by the Nova Institute.
4. A report entitled 'UK flax and hemp pro-
duction: the impact of changes in support
measures on the competitiveness and future
potential of UK fibre production and industrial
use', ADAS - Centre for Sustainable Crop
Management, Cambridge, UK (2005).
5. Data supplied from the Eurostat New
Cronos database (October 2004).
6. Data obtained by the author from a number
of national and international experts.
•
the revenues resulting from crop
production;
the direct and indirect costs of
•
production.
This approach will allow comparisons to be
made between regions and will, most impor-
tantly, allow us to evaluate whether hemp pro-
duction is profitable when compared with its
standard competitors.
In order to be as complete as possible, the
second part of this chapter will see a few inter-
national comparisons undertaken.
8.3
Choice of Economic Model
8.3.1 Calculation methods
In order to tackle the basic question of the pro-
fitability of this crop, we need a simple model
