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The Empirical Analysis of Production Cost Reduction Effects from the Agricultural Machinery Rental Policy

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  • Nam, Kyungsoo

Abstract

In recent years, agriculture has been suffering from a severe shortage of labor. Accordingly, the government is striving to increase the agricultural mechanization rate to solve the labor shortage and improve agricultural productivity. The most representative policy is the implementation of agricultural machinery rental system. In the dry-field farming, however, the mechanization rate is still low. Therefore, the government is looking for a way to improve the rate. This study proposes an improvement of the agricultural mechanization rate indicators. In addition, a method of analyzing production cost reduction according to the agricultural machinery rental policy is presented in this study. As a result of the analysis, the mechanization rate of dry-field farming is estimated to be 50.1 to 58.9 percent. The average production cost reduction due to the policy is estimated to be from 520,000 to 530,000 won per hectare. Pepper is found to be the largest cost-reduction commodity as much as about 880,000 to 930,000 won, followed by potato (about 660,000 to 700,000 won) and cabbage (about 610,000 to 630,000 won).

Suggested Citation

  • Nam, Kyungsoo, 2021. "The Empirical Analysis of Production Cost Reduction Effects from the Agricultural Machinery Rental Policy," Journal of Rural Development/Nongchon-Gyeongje, Korea Rural Economic Institute, vol. 44(2), June.
    • Handle: RePEc:ags:jordng:330820
    DOI: 10.22004/ag.econ.330820
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    Keywords

    Productivity Analysis;

    Statistics

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