| The cost of wheat production is the comprehensive technical and economic index for evaluating the advantage of wheat production. It causes higher attention of farmers, wheat trading and management departments and the central government. The cost control will help wheat production in Shandong Province to win in the market competition.This thesis, based on the theory of activity-based cost and the theory of value-chain, studies the existing problems of wheat production with the first-hand on-site investigation data obtained in 2004, and tries to find out the reasons of high cost of wheat production in Shandong Province. It aims to search for the way of raising the ability of competition and constructs the competitive value-chain of wheat production in Shandong Province.The method of on-spot investigation is used in the thesis. Sample cities and counties of different areas of wheat production in Shandong Province are chosen. The scope of on-site investigation is determined according to the ecological types of wheat in Shandong Province. The author (the investigator) chooses Wendeng City, Jiaozhou City, Jiaonan City in the hilly area in the east of Shandong Province for the wheat becomes ripen later ; Ling County, Yangxin County in the level area in the west and north of Shandong Province for the wheat becomes ripen later ; Tengzhou City, Juancheng County in the level and low-lying area in the west and south of Shandong Province for the wheat becomes ripen earlier ; Huantai County, Feicheng City, Tai'an City, Mengyin County and Tancheng County in the hilly area in the middle ofShandong Province for the wheat becomes ripen earlier. There are 12 sample cities and counties all together.The cost statistics of the investigation items have been divided into four phases: the cost at the sowing phase, the cost at the management phase before winter, the cost at the management phase in spring, and the cost at the harvest phase. The six motivation elements of direct production cost are determined. They are the cost of seeds, the cost of fertilizer, the cost of insecticide, the cost of water, the cost of machinery, and the cost of human resources. On the basis, the theory of activity-based cost and the theory of value-chain are introduced into the analysis and study of the wheat production in Shandong Province. The present production situation, existing problems and main causes in different areas have been analyzed and compared. The cost of wheat production in Shandong Province in 2003, the average wheat production cost in Henan Province, China as a whole and the major countries of wheat production in the world have been analyzed and compared. The result of the research is as follows:1. The statistic result and analysis of the activities in the value-chain process of wheat production1.1 The cost at the sowing phase. The cost of seeds is high at this phase. No supplementary work needs to be done after sowing. There is more chemical fertilizer than organic fertilizer in the base fertilizer; machines are used in ploughing; the cost of keeping the soil moisture is lower than the past years because it rained a lot in 2003.1.2 The cost at the management phase before winter. There is less input at the time. Watering, applying fertilizer, uprooting and other work is done according to the natural conditions and laboring habit. Herbicide is commonly used in Shandong Province before winter.1.3 The cost at the management phase in spring. The management of wheat production in spring is a key link and caused much attention in Shandong Province. Farmers usually apply fertilizer once or twice and spray a lot ofinsecticide. They pay much attention to the work and often spray insecticide twice or three times. Watering in spring also costs a lot. Water needs to be pumped to a higher place before irrigation in hilly areas and costs twice more than in the flat land. Weed uprooting is usually made by hand, which needs much time and human resources.1.4 The cost at the harvesting phase. It costs a lot at the time. Wheat harvesting is mostly done by machine. The money spent on combine tractors takes a big proportion. Half-machine and half-hand harvesting is used in some places. Hand harvesting is used in some smaller land where machines are not suitable to work. Wheat drying and storing in the barn has close relationship with the weather, which is not easy to control. Transportation of wheat is mainly depends on machines.2. The analysis of the motivating elements of cost in the value-chain of wheat productionAccording to the on-site investigation result, the sum of the items of wheat production cost for per mu (1 mu =667m2) in Shandong in 2003 is 347.96 yuan (RMB). The cost of seeds is 26.07 yuan (RMB), takes 8% of the proportion, lower than past years. The cost of fertilizer is 136.31 yuan (RMB), takes 40%, much lower than past years. The cost of insecticide is 11.75 yuan (RMB), takes 3%, nearly the same as before. The cost of water is 29.45 yuan (RMB), takes 8%, lower than before because the weather is beneficial to wheat growing in that year. The cost of machinery is 63.98 yuan (RMB), takes 18%, which means that the degree of machine application is still in a lower level. The cost of human resources is 80.40 yuan (RMB), takes 23%, which means that much work is still done by man. The statistics shows that the proportion of the items of wheat production cost in Shandong Province has become more reasonable than before, however, it needs to be improved because the cost of fertilizer, water and human resources is still higher. It means that the input of the proportion of the items of wheat production cost is still in adjustment and tends to be better.3. Analysis of the relationship between the cost of direct wheat production and the output by means of the diagram made with ExcelThe diagram made with excel shows that the higher input does not necessarily lead to the higher output although the output may become higher with the input in a certain range. The output even tends to decrease when the increasing input reaches a certain point. The best input-output range according to the diagram made with excel is determined. If the input is between 235 and 340 yuan (RMB) per mu, the output per mu is about 400 to 500 kilogram; if the input is between 350 and 500 yuan (RMB) per mu, the output per mu is about 400 kilogram. The conclusion is that too much input may lead to lower output and profit.4. Analysis of the relationship between the cost of fertilizer and water and the output per mu by means of MatlabThe author makes the analysis of the relationship between the cost of fertilizer and water and the output per mu by means of Matlab and sets up a mathematical model to draw the hypothetical diagram in scattered spots. The hypothesis between the cost of fertilizer and water and the output per mu is = 722-72 + °-95029x" 0-0013919x2shown in the following way: input of fertilizer and water reaches 341.36 yuan (RMB) per mu, the output of wheat comes to the highest point, that is 442.46 kilogram per mu. The hypothetical diagram made with Matlab concludes that when the input of fertilizer and water reaches 100-200 yuan (RMB) per mu. the output of wheat per mu rises quickly. When the input of fertilizer and water exceeds 200 yuan (RMB) per mu. When the input of fertilizer and water exceeds 200 yuan (RMB) per mu, the output of wheat per mu becomes stable at the point of 440 kilogram. The output of wheat per mu shows a tendency of rapid rising and long stable mode along with the increasing input of fertilizer and water.The analysis of the relationship between the cost of direct wheat production and the output by means of the diagram made with excel reaches the similar conclusion together with the analysis of the mathematical modeland the hypothetical diagram by means of Matlab. The conclusion is that input increases along with output in a certain range, but too high input even leads to lower output and little profit.The problems in wheat production in Shandong Province can be summed up in the following aspects. The total amount of fertilizer is used less than the past years, but there is more base fertilizer. The cost of human resources for field management such as weeding in spring is comparatively high. The cost of watering in hilly areas is much higher. Mechanization is not developed, compared with the advanced level in the world. Cost of fertilizer, water and human resource is still very high. The reason is that the different items of cost is not in harmony and leads to unbalance of value-chain. The comparison and analysis also shows that the proportion of the items of input is in adjustment. The value-chain of wheat production is being optimized but has not completely reflects the advantage of competition yet.As for the above problems, the system of cost control based on the theory of value-chain and the readjustment and optimization of the proportion of the cost is put forward so as to build up the core competitiveness of wheat production in Shandong Province. |
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