Ugly fruits
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“A widespread introduction of “a new segment of ugly fruit and vegetables” is a complete disaster for farmers in general; and especially for those who this measure leaves out of the “ugly fruits” market.
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UGRLY_FRUIT_CLUB
This is a project suggesting an idea that was to reduce our food waste.
This project was done by 4 people taking online course for Design Thinking from IDEO (design consultancy) in Sydney, Australia. Our team members were from different industries like program, graphic design and human research and also different nationalities like English, Korean, Australian and Russian.
The beauty of food
This document outlines a project to create soups and smoothies from "ugly" fruits and vegetables that would otherwise go to waste due to supermarkets' strict cosmetic standards. It estimates that 20-40% of UK produce and over half of all global food is lost this way. The project aims to make soups and smoothies from these foods for a Green Week event using recyclable packaging, with supporting documentary footage. It provides example recipes and lists next steps like testing recipes, packaging, and contacting organizations for advice. The overall goal is to inform consumers about food waste and encourage buying "ugly" produce to pressure supermarkets into stocking them.
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This document outlines a proposed business model called Ugly Vegetable that aims to reduce food waste by delivering imperfect or misshapen produce directly to customers. The business would collect surplus fruits and vegetables rejected by supermarkets due to not meeting size or aesthetic standards from farms and deliver them to both businesses (B2B) and consumers (B2C). Key benefits include reducing food waste, lowering food miles, promoting seasonal produce with better flavor, and reducing packaging. Revenue would be generated through a modest price markup on the produce after accounting for collection and delivery costs. Competition is currently limited but scaling up demand is a challenge to reach profitability.
Les Legumes Moches, Case Study by The Azores
1. Intermarche, a French retailer, launched a campaign called "Les legumes moches" to promote "ugly" or misshapen produce and raise awareness about food waste.
2. The campaign was a success, with the entire stock of "ugly" produce selling out in two days and supermarket traffic increasing 24%.
3. The humorous campaign used witty storytelling and intense promotion to highlight the message that misshapen produce was just as tasty, helping address the issue of 40% of produce being discarded due to standards.
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Natureview Farm is considering options to grow its revenue beyond $20 million by 2001. Option 1 is to expand its 8-oz yogurt cups into supermarket regions, which could generate $16.1 million in revenue in 2000 and $19.3 million in 2001. Option 2 is launching a national rollout of its 32-oz cups, projected to earn $9.2 million in 2000 and $9.2 million in 2001. Option 3 is introducing children's multipacks in natural food stores, with potential revenues of $3.8 million in 2000 and $3.3 million in 2001. The recommendation is to combine Options 1 and 3 to leverage the revenue growth of supermarkets while maintaining relationships in natural food stores.
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The farming owners want to increase profits by modifying their process. They produce 3 crops - tomatoes, cucumbers, and peppers - and can adjust leased fields and workers. An optimization model represents the problem with variables like crop quantities, prices, and costs. It finds the profit-maximizing solution within market and resource constraints. The optimal amounts of peppers and tomatoes are produced. Increasing workers or markets can further boost profits if marginal returns remain positive.
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UGRLY_FRUIT_CLUB
This is a project suggesting an idea that was to reduce our food waste.
This project was done by 4 people taking online course for Design Thinking from IDEO (design consultancy) in Sydney, Australia. Our team members were from different industries like program, graphic design and human research and also different nationalities like English, Korean, Australian and Russian.
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This document outlines a project to create soups and smoothies from "ugly" fruits and vegetables that would otherwise go to waste due to supermarkets' strict cosmetic standards. It estimates that 20-40% of UK produce and over half of all global food is lost this way. The project aims to make soups and smoothies from these foods for a Green Week event using recyclable packaging, with supporting documentary footage. It provides example recipes and lists next steps like testing recipes, packaging, and contacting organizations for advice. The overall goal is to inform consumers about food waste and encourage buying "ugly" produce to pressure supermarkets into stocking them.
Sharing economy-2
This document outlines a proposed business model called Ugly Vegetable that aims to reduce food waste by delivering imperfect or misshapen produce directly to customers. The business would collect surplus fruits and vegetables rejected by supermarkets due to not meeting size or aesthetic standards from farms and deliver them to both businesses (B2B) and consumers (B2C). Key benefits include reducing food waste, lowering food miles, promoting seasonal produce with better flavor, and reducing packaging. Revenue would be generated through a modest price markup on the produce after accounting for collection and delivery costs. Competition is currently limited but scaling up demand is a challenge to reach profitability.
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1. Intermarche, a French retailer, launched a campaign called "Les legumes moches" to promote "ugly" or misshapen produce and raise awareness about food waste.
2. The campaign was a success, with the entire stock of "ugly" produce selling out in two days and supermarket traffic increasing 24%.
3. The humorous campaign used witty storytelling and intense promotion to highlight the message that misshapen produce was just as tasty, helping address the issue of 40% of produce being discarded due to standards.
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Natureview Farm is considering options to grow its revenue beyond $20 million by 2001. Option 1 is to expand its 8-oz yogurt cups into supermarket regions, which could generate $16.1 million in revenue in 2000 and $19.3 million in 2001. Option 2 is launching a national rollout of its 32-oz cups, projected to earn $9.2 million in 2000 and $9.2 million in 2001. Option 3 is introducing children's multipacks in natural food stores, with potential revenues of $3.8 million in 2000 and $3.3 million in 2001. The recommendation is to combine Options 1 and 3 to leverage the revenue growth of supermarkets while maintaining relationships in natural food stores.
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This document discusses greenhouse vegetable production and yields in Ontario for 2015. Some key points:
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- Average yields were 38 kg/m2 overall, with tomatoes at 44.8 kg/m2, peppers at 24.1 kg/m2, and cucumbers at 47.9 kg/m2.
- Gross profit averaged $75.02/m2. Production costs averaged $70/m2, including $58.5/m2 in operational expenses.
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ECONOMICS 100A INTERMEDIATE MACROECONOMICSAMJAD TOUKANSummer
ECONOMICS 100A: INTERMEDIATE MACROECONOMICS
AMJAD TOUKAN
Summer Session I 2021
Due Monday July 26th by midnight
PROBLEM SET 6
Chapter 9 Problems
1. Suppose the market for widgets can be described by the following equations:Demand: P = 10 – QSupply: P = Q – 4
where P is the price in dollars per unit and Q is the quantity in thousands of units. Then:
a. What is the equilibrium price and quantity?
b. Suppose the government imposes a tax of $1 per unit to reduce widget consumption and raise government revenues. What will the new equilibrium quantity be? What price will the buyer pay? What amount per unit will the seller receive?
c. Suppose the government has a change of heart about the importance of widgets to the happiness of the American public. The tax is removed and a subsidy of $1 per unit granted to widget producers. What will the equilibrium quantity be? What price will the buyer pay? What amount per unit (including the subsidy) will the seller receive? What will be the total cost to the government?
2. Japanese rice producers have extremely high production costs, due in part to the high opportunity cost of land and to their inability to take advantage of economies of large-scale production. Analyze two policies intended to maintain Japanese rice production: (1) a per-pound subsidy to farmers for each pound of rice produced, or (2) a per-pound tariff on imported rice. Illustrate with supply-and-demand diagrams the equilibrium price and quantity, domestic rice production, government revenue or deficit, and deadweight loss from each policy. Which policy is the Japanese government likely to prefer? Which policy are Japanese farmers likely to prefer?
3. In 1983, the Reagan Administration introduced a new agricultural program called the Payment-in-Kind Program. To see how the program worked, let’s consider the wheat market.
a. Suppose the demand function is QD = 28 – 2P and the supply function is QS = 4 + 4P, where P is the price of wheat in dollars per bushel, and Q is the quantity in billions of bushels. Find the free-market equilibrium price and quantity.
a. Now suppose the government wants to lower the supply of wheat by 25 percent from the free-market equilibrium by paying farmers to withdraw land from production. However, the payment is made in wheat rather than in dollars – hence the name of the program. The wheat comes from vast government reserves accumulated from previous price support programs. The amount of wheat paid is equal to the amount that could have been harvested on the land withdrawn from production. Farmers are free to sell this wheat on the market. How much is now produced by farmers? How much is indirectly supplied to the market by the government? What is the new market price? How much do farmers gain? Do consumers gain or lose?
b. Had the government not given the wheat back to the farmers, it would have stored or destroyed it. Do taxpayers gain from the program? What potential problem ...
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- A monopoly is both the firm and the industry and is the price maker. It faces a downward sloping demand curve where price exceeds marginal revenue. The profit-maximizing quantity is where marginal revenue equals marginal cost.
- At this quantity, the monopoly sets the highest price that demand allows. If price exceeds average total cost, the monopoly earns economic profits. In the long run, only monopolies that earn super-normal profits can remain in business.
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This document provides an overview of an introductory lecture on agricultural economics. It discusses why agricultural economics is an important field, covering topics like food security, trade, and subsidies. It then introduces some key concepts in welfare economics used to analyze agricultural policies, including consumer and producer surplus. Specific agricultural policies of the EU Common Agricultural Policy (CAP) are examined, including price supports and export subsidies that led to overproduction and dumping of surpluses on world markets. This generated controversies and budget issues for the EU. Reforms have since moved away from price supports, but production still relies on subsidies.
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It is a stream of social sciences and commerce.
It is a study of production, consumption, distribution and regulation of flow of goods and services in an economy.
It has a direct relation with money.
It studies the economic aspect of goods and services provided in the economy.
It is a wider concept and hence affects the overall conditions of the economy.
It has two major segments: micro and macro. It is derived from Greek word ‘Mikros’.
It creates efficiency and smoothens up the process of final consumption of goods and services.
It tries to understand the problems that occur while producing, distributing and consuming a product.
It deepens our understanding.
Consumption is a broader term and it is the essence of economics. Economists generally consider consumption to be the final purpose of economic activity, hence consumption per person is a central measure of an economy’s productive success.
Consumption in economics means utilization of a product or a commodity and to derive benefits from the same. The utility of a product will help us in satisfying our needs and hence it is consumption.
Consumption can be defined in different ways, but is usually best described as the final purchase of goods and services by individuals. The purchase of a new pair of shoes, a burger at the fast food restaurant, or the service of getting your house cleaned are all examples of consumption.
It is a state of maximum satisfaction from a consumption.
A producer will obtain the stage of equilibrium when he will get maximum profit from his production.
In economics, economic equilibrium is a state where economic forces such as supply and demand are balanced and in the absence of external influences the (equilibrium) values of economic variables will not change.
Equilibrium occurs at the point at which quantity demanded and quantity supplied are equal. Market equilibrium in this case refers to a condition where a market price is established through competition.
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Question 1A factor of production whose quantity can be changed d.docx
Question 1
A factor of production whose quantity can be changed during a particular period is a:
marginal factor of production.
fixed factor of production.
incremental factor of production.
variable factor of production.
Question 2
Assuming that all other factors of production are held constant, marginal product is the change in ________ output resulting from a 1-unit change in _______ .
total; a variable input
total; a fixed input
total; average product
per unit; a fixed input
Question 3
Average variable cost is the ratio of:
total cost to the marginal cost.
total cost to the amount of variable input.
variable cost to the quantity of output.
marginal cost to the quantity of output.
Question 4
The curve labeled V represents the firm's _______ curve.
total cost
average total cost
marginal cost
average variable cost
Question 5
When an increase in the firm's output reduces its long-run average cost, it experiences:
economies of scale.
diseconomies of scale.
constant returns to scale.
variable returns to scale.
Question 6
A firm that is able to more efficiently utilize by-products as it increases production in the long run is an example of:
economies of scale.
diseconomies of scale.
labor-intensive production.
capital-intensive production.
Question 7
If your plant is operating in the positively-sloped portion of a long-run average cost curve, this could be the result of:
decreased input prices.
improved utilization of by-products.
specialization of resources.
limited decision-making capacity.
Question 8
Perfect competition is a model of the market that assumes all of the following EXCEPT:
a large number of firms.
firms face downward-sloping demand curves.
firms produce identical goods.
many buyers.
Question 9
The Case in Point on the Burkha Industry suggested that this industry:
might be an example of perfect competition although it did not feature easy entry and exit.
might be an example of perfect competition because it did feature easy entry and exit.
might not be an example of perfect competition although it did feature easy entry and exit.
might not be an example of perfect competition because it did not feature easy entry and exit.
Question 10
If a perfectly competitive firm sells 30 units of output at a price of $10 per unit, its marginal revenue is:
$10.
more than $10.
less than $10.
$300.
Question 11
The difference between total revenue and total cost is:
economic profit.
nominal revenue.
average revenue.
marginal revenue.
Question 12
If a perfectly competitive firm is producing a quantity that generates MC < MR, then profit:
is maximized.
can be increased by increasing production.
can be increased by decreasing production.
can be increased by increasing the price.
Question 13
In the short run, a perfectly competitive firm does not produce output and earns a negative economic profit if:
P = ATC.
P < AVC.
AVC > P > ATC.
AVC < P < ATC.
Question 14
If all fir ...
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123
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This document provides an overview of perfect competition in the context of the milk market. It defines key characteristics of perfect competition, including a large number of small producers/sellers, standardized/homogeneous products, price-taking behavior, free entry and exit, and lack of non-price competition. The document then analyzes how the milk market exhibits these characteristics, such as small individual farms, uniform milk quality, and farmers being price takers. It concludes that the milk market approximates perfect competition.
consumer and producer surplus
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Explain efficiency, gain and dead weight loss in monopoly and perfect competition?
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ECONOMICS 100A INTERMEDIATE MACROECONOMICSAMJAD TOUKANSummer
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AMJAD TOUKAN
Summer Session I 2021
Due Monday July 26th by midnight
PROBLEM SET 6
Chapter 9 Problems
1. Suppose the market for widgets can be described by the following equations:Demand: P = 10 – QSupply: P = Q – 4
where P is the price in dollars per unit and Q is the quantity in thousands of units. Then:
a. What is the equilibrium price and quantity?
b. Suppose the government imposes a tax of $1 per unit to reduce widget consumption and raise government revenues. What will the new equilibrium quantity be? What price will the buyer pay? What amount per unit will the seller receive?
c. Suppose the government has a change of heart about the importance of widgets to the happiness of the American public. The tax is removed and a subsidy of $1 per unit granted to widget producers. What will the equilibrium quantity be? What price will the buyer pay? What amount per unit (including the subsidy) will the seller receive? What will be the total cost to the government?
2. Japanese rice producers have extremely high production costs, due in part to the high opportunity cost of land and to their inability to take advantage of economies of large-scale production. Analyze two policies intended to maintain Japanese rice production: (1) a per-pound subsidy to farmers for each pound of rice produced, or (2) a per-pound tariff on imported rice. Illustrate with supply-and-demand diagrams the equilibrium price and quantity, domestic rice production, government revenue or deficit, and deadweight loss from each policy. Which policy is the Japanese government likely to prefer? Which policy are Japanese farmers likely to prefer?
3. In 1983, the Reagan Administration introduced a new agricultural program called the Payment-in-Kind Program. To see how the program worked, let’s consider the wheat market.
a. Suppose the demand function is QD = 28 – 2P and the supply function is QS = 4 + 4P, where P is the price of wheat in dollars per bushel, and Q is the quantity in billions of bushels. Find the free-market equilibrium price and quantity.
a. Now suppose the government wants to lower the supply of wheat by 25 percent from the free-market equilibrium by paying farmers to withdraw land from production. However, the payment is made in wheat rather than in dollars – hence the name of the program. The wheat comes from vast government reserves accumulated from previous price support programs. The amount of wheat paid is equal to the amount that could have been harvested on the land withdrawn from production. Farmers are free to sell this wheat on the market. How much is now produced by farmers? How much is indirectly supplied to the market by the government? What is the new market price? How much do farmers gain? Do consumers gain or lose?
b. Had the government not given the wheat back to the farmers, it would have stored or destroyed it. Do taxpayers gain from the program? What potential problem ...
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- A monopoly market is characterized by a single seller of a unique product without close substitutes. Barriers to entry like government protections, large economies of scale, or exclusive ownership of resources allow monopolies to exist.
- A monopoly is both the firm and the industry and is the price maker. It faces a downward sloping demand curve where price exceeds marginal revenue. The profit-maximizing quantity is where marginal revenue equals marginal cost.
- At this quantity, the monopoly sets the highest price that demand allows. If price exceeds average total cost, the monopoly earns economic profits. In the long run, only monopolies that earn super-normal profits can remain in business.
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This document discusses perfect competition in the long run. It provides two scenarios to analyze how a perfectly competitive firm, Joe the catfish farmer, would respond to a decline in prices. If prices fell to $71/unit, Joe should shut down his business as it would be cheaper than producing at a loss. However, if prices only fell to $81/unit, Joe should continue operating in the short run to minimize his losses until prices potentially increase. The document also discusses how, in perfect competition, the constant entry and exit of firms in response to profits and losses drives prices toward the lowest point on the average total cost curve in the long run.
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This document provides an overview of an introductory lecture on agricultural economics. It discusses why agricultural economics is an important field, covering topics like food security, trade, and subsidies. It then introduces some key concepts in welfare economics used to analyze agricultural policies, including consumer and producer surplus. Specific agricultural policies of the EU Common Agricultural Policy (CAP) are examined, including price supports and export subsidies that led to overproduction and dumping of surpluses on world markets. This generated controversies and budget issues for the EU. Reforms have since moved away from price supports, but production still relies on subsidies.
Equilibrium
It is a stream of social sciences and commerce.
It is a study of production, consumption, distribution and regulation of flow of goods and services in an economy.
It has a direct relation with money.
It studies the economic aspect of goods and services provided in the economy.
It is a wider concept and hence affects the overall conditions of the economy.
It has two major segments: micro and macro. It is derived from Greek word ‘Mikros’.
It creates efficiency and smoothens up the process of final consumption of goods and services.
It tries to understand the problems that occur while producing, distributing and consuming a product.
It deepens our understanding.
Consumption is a broader term and it is the essence of economics. Economists generally consider consumption to be the final purpose of economic activity, hence consumption per person is a central measure of an economy’s productive success.
Consumption in economics means utilization of a product or a commodity and to derive benefits from the same. The utility of a product will help us in satisfying our needs and hence it is consumption.
Consumption can be defined in different ways, but is usually best described as the final purchase of goods and services by individuals. The purchase of a new pair of shoes, a burger at the fast food restaurant, or the service of getting your house cleaned are all examples of consumption.
It is a state of maximum satisfaction from a consumption.
A producer will obtain the stage of equilibrium when he will get maximum profit from his production.
In economics, economic equilibrium is a state where economic forces such as supply and demand are balanced and in the absence of external influences the (equilibrium) values of economic variables will not change.
Equilibrium occurs at the point at which quantity demanded and quantity supplied are equal. Market equilibrium in this case refers to a condition where a market price is established through competition.
This price is often called the competitive price or market clearing price and will tend not to change unless demand or supply changes and the quantity is called "competitive quantity" or market clearing quantity.
Macro 6 macroeconomic+measures-gdp+and+economic+growth+
The document discusses macroeconomic measures like GDP and economic growth. It defines GDP as the total value of goods and services produced within a country in a year. GDP is calculated by adding up consumer spending, investment, government spending, and net exports. Nominal GDP uses current prices, while real GDP adjusts for inflation to show changes in the actual quantity of goods produced. The document also discusses related concepts like GNP, NNP, and the components and calculation of GDP.
Question 1A factor of production whose quantity can be changed d.docx
Question 1
A factor of production whose quantity can be changed during a particular period is a:
marginal factor of production.
fixed factor of production.
incremental factor of production.
variable factor of production.
Question 2
Assuming that all other factors of production are held constant, marginal product is the change in ________ output resulting from a 1-unit change in _______ .
total; a variable input
total; a fixed input
total; average product
per unit; a fixed input
Question 3
Average variable cost is the ratio of:
total cost to the marginal cost.
total cost to the amount of variable input.
variable cost to the quantity of output.
marginal cost to the quantity of output.
Question 4
The curve labeled V represents the firm's _______ curve.
total cost
average total cost
marginal cost
average variable cost
Question 5
When an increase in the firm's output reduces its long-run average cost, it experiences:
economies of scale.
diseconomies of scale.
constant returns to scale.
variable returns to scale.
Question 6
A firm that is able to more efficiently utilize by-products as it increases production in the long run is an example of:
economies of scale.
diseconomies of scale.
labor-intensive production.
capital-intensive production.
Question 7
If your plant is operating in the positively-sloped portion of a long-run average cost curve, this could be the result of:
decreased input prices.
improved utilization of by-products.
specialization of resources.
limited decision-making capacity.
Question 8
Perfect competition is a model of the market that assumes all of the following EXCEPT:
a large number of firms.
firms face downward-sloping demand curves.
firms produce identical goods.
many buyers.
Question 9
The Case in Point on the Burkha Industry suggested that this industry:
might be an example of perfect competition although it did not feature easy entry and exit.
might be an example of perfect competition because it did feature easy entry and exit.
might not be an example of perfect competition although it did feature easy entry and exit.
might not be an example of perfect competition because it did not feature easy entry and exit.
Question 10
If a perfectly competitive firm sells 30 units of output at a price of $10 per unit, its marginal revenue is:
$10.
more than $10.
less than $10.
$300.
Question 11
The difference between total revenue and total cost is:
economic profit.
nominal revenue.
average revenue.
marginal revenue.
Question 12
If a perfectly competitive firm is producing a quantity that generates MC < MR, then profit:
is maximized.
can be increased by increasing production.
can be increased by decreasing production.
can be increased by increasing the price.
Question 13
In the short run, a perfectly competitive firm does not produce output and earns a negative economic profit if:
P = ATC.
P < AVC.
AVC > P > ATC.
AVC < P < ATC.
Question 14
If all fir ...
Agribusiness market analysis
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PURE COMPETITION
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Managerial_economics (3).docx
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123
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Cournot's Duopoly model
This document summarizes the Cournot duopoly model of market competition between two firms. It explains that under Cournot's assumptions, the two firms will each capture 1/3 of the market share and settle at an equilibrium price point between the competitive and monopoly prices. The model involves the firms reacting to each other's output and price decisions in successive rounds until they split the market evenly. Some criticisms of the model are that it assumes costless production and does not allow for new firm entry or learning over time.
Microeconomic_Perfect Competition
This document provides an overview of perfect competition in the context of the milk market. It defines key characteristics of perfect competition, including a large number of small producers/sellers, standardized/homogeneous products, price-taking behavior, free entry and exit, and lack of non-price competition. The document then analyzes how the milk market exhibits these characteristics, such as small individual farms, uniform milk quality, and farmers being price takers. It concludes that the milk market approximates perfect competition.
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Similar to Ugly fruits (20)
ECONOMICS 100A INTERMEDIATE MACROECONOMICSAMJAD TOUKANSummer
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Question 1A factor of production whose quantity can be changed d.docx
Question 1A factor of production whose quantity can be changed d.docx
Ugly fruits
- 2. Current Scenario. Lets say that we currently have a fresh produce market of a total of 100kg of selected Class I products. First Effect . An over supplied market will pressure down all fresh produce prices. Regular Market First Issue: Does anybody believe that we can increase demand by 15% from one day to another? New Scenario. An over supplied market = 100kg of selected fresh produce + 15*kg of Ugly fruits. Total 115kg. Summary. There is an excess of 15kg in this new market and so there is an excess of growers that produce them. The less efficient growers that cannot life with the reduced prices will disappear. Market with Ugly Fruits *Hypothesis. 15 extra kilos of ugly fruits out of a production of 100kg currently sold. Based on own estimations of proponents of this trend (meaning that currently 10% to 15% of edible but ugly fruits are discarded).
- 3. 15% of the Supply Base will disappear. We can even assume (almost impossible) that after the initial oversupply market-shock, prices of Class I fruits get back to normal. The total consumption of this new market will continue to be 100kg. (or a very modest increase due to the reduced prices; because eating habits do not change dramatically when prices get reduced but rather when prices heavily increase) Summary. So even at best possible scenario (discount price reduction of 30%), the total size of the market gets reduced by 4,5%. 100kg x 2€ (Hypothetical Retail Price) = (200 €) Size of the Regular Market Size of Regular Market (€) Size of Market with Ugly Fruits (€) *Hypothesis. Retailers estimate that Ugly Fruits are regularly sold at a discount price reduction that range from 30% to 50 85kg x 2€ (Hypothetical Retail Price) 15kg x 1,40€ (Hypothetical Retail Price -30%) Size of market with Ugly Fruits: 191 €
- 4. Following our reasoning, the size of the market is reduced by 4,5%, but we also need to address the impact on the Producers’ Turnover taking into consideration all Supply Chain Costs*. Summary: Producer’s Turnover gets reduced by 18% . *Hypothesis. To simplify calculation we estimate all Supply Chain Costs together. According to last available data, average gross Producers’ turnover account for ¼ of Retail Price. Produce Turnover Regular Market Producer Turnover M. With Ugly Fruits Supply Chain Costs and margins: 200€ x ¾ = 150€ Producers’ Turnover: 200€ x 1/4 = 50€ or 200€-150€= 50€ Supply Chain Costs and margins= 150€ (same costs and margins in the new market) Producers’ Turnover: 191€ - 150 = 41€
- 5. We are told that this new product Ugly Fruits niche market maximize Growers’ Turnover and Profit by selling all crop and not only the selected Class I. As previously seen (see previous slide) not only turnover does not increase but rather reach to a minimum of 18%. Now we concentrate on how profits get impacted. To review growers’ profits we will estimate all farming costs at once. Growers’ Profits Regular Market Grower’s Profits M. with Ugly Fruits *Hypothesis. To simplify theoretical Analysis, we assume a generous 50% margin (excluding amortization, interests and unpaid family labor) To be able to sell 100kg, growers produce an excess that is discarded (Ugly/Unfit/Deficient). Kilos Grown (100+15%)= 117,64kg Growers’ Profits: 50€ (Turnover)-25€ (Costs)= 25€ Unit Costs: 25€/117,64kg=0,20€ We assume growers produce no excess (use all crop) Kilos Grown 100kg We apply same Unit costs : 0,20€/kg Grower’s Costs: 41€ (Turnover)-20,40€ (Costs)= 20,60€ (-17,60%)
- 6. Total Market (in €) is reduced by 4,5% Growers’ Profits get trimmed by 17,60% Growers’ turnover is lowered by 18% The less efficient growers representing 15% of the production are expelled from the business. The New Market with Ugly Fruits” “A widespread introduction of a new segment of ugly fruit and vegetables” is a complete disaster for farmers in general; and especially for those who this measure leaves out of the “ugly fruits” market.. This is good example on how good intentions (from institutions, retailers and NGOs) can introduce with this movement perverse incentives that hinder the improvement and progress of the efficiency of production systems.