The name is absent



Table 15. DRC ratios for Cyprus’ three commodities (3 year average; 1997/1998 -
1999/2000)

Tomatoes,

_____Oranges,

Olive Oil

1. Yield (kg/ha)_________________

__________46,000

__________23,048

_____________1,729

CYP

EURO

CYP

EURO

CYP

EURO

2. Farm gate price/ton

261.3

458.5

108.7

190.6

1,900.

_______0

3,333.3

3. Adjusted border price

472.0

828.0

183.2

321.5

3,265.

_______6

5,729.1

4. Social cost of non-
tradable inputs*_______________

65.2

114.5

40.7

71.4

437.0

766.8

5. Social Value Added**

378.5

664.0

86.9

152.4

2,674.

________5

4,692.2

6. Social Cost of Tradable

Inputs***_____________________

93.5

164.0

96.4

169.1

591.1

1,036.9

7. DRC (4/5)__________________

0.172

0.469_______

0.163_______

* Social Cost of Non- Tradable Inputs: Non- tradable inputs: labor, land, depreciation,
social contributions

** Social Value Added: Domestic production generates value added with the use of
domestic non-internationally traded inputs valued in terms of social (shadow) prices
*** Social Cost of Tradable Inputs: Tradable Inputs: Seeds, Fertilizers, Chemicals, Fuel

Tomatoes: Tomatoes proved to have a definite cost and price
comparative advantage in producing them having a DRC of 0.172. Most
probably the reason has to do with the technology used and the fact that the
product is grown mainly in greenhouses resulting to increased productivity,
in terms of tonnage output per hectare, and increased prices especially in
winter. The bulk or production of tomatoes originates with the vast network
of coops that tend to focus on local realities and are ill equipped to
undertake export activities. However, the export potential of tomatoes
remains high.

Oranges: Citrus production has a DRC of 0.469, indicating that
oranges are the least competitive crop among the three studied. Supportive
to this finding is the fact that local exporters are beginning to find it
extremely difficult to compete with other exporters from other countries. It
seems that the main reason for reduced competitiveness in the foreign
markets is the old fashioned composition of plantations in terms of
varieties that do not meet consumer demand. Currently, new varieties are
planted and new markets are being tried as far away as Hong Kong.

Olive Oil: According to table 15, olive oil proves to be the most
competitive of the three measured (DRC 0,163) but it also has the greatest
room for improvement as it is still organized as a labor- intensive industry.
The sector already needs serious infrastructure investments and incentives
to become more competitive. However, its export potential remains high.

Explanation note: All three products examined in this section have a
comparative advantage in terms of DRC estimations. However, things are
not static, and agricultural production costs and producer prices have
changed since EU accession negotiations begun between EU and Cyprus in
2001. If we have to estimate new DRC ratios based on current data (not yet
available), the agricultural situation in Cyprus would be different. It is
believed that DRC ratios after 2001 would be higher than the ones reported
due to unchanged/decreased border prices and increased costs of tradable

13



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