Back Issues 11-20

APPLICATION OF EDA WINDOW ANALYSIS FOR  CONSTRUCTING ECONOMIC SCALE MODELS  OF THE BANANA INDUSTRY

Lin Te-Sheng

Ph.D Student, Department of Plant Industry,

National Pingtung University of Science and Technology Industry, Taiwan

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Lin Chun-Nan*

Assistant Professor, Department of Agribusiness Management,

National Pingtung University of Science and Technology, Taiwan

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Peng Ke-Chung

Professor, Department of Agribusiness Management,

National Pingtung University of Science and Technology, Taiwan

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Abstract

Taiwan is known as the “Banana Kingdom,” and its bananas are an essential economic fruit crop with an excellent flavor and wide appreciation in Japan since the 1960s. Taiwan’s bananas formerly occupied a 90% share of the Japanese market; however, banana yields diminished because of the “Panama disease,” and thus export yields decreased. From 2006 to 2016, Taiwan’s banana market had excess supply as a result of shifting from export to domestic sales, and export yields decreased. Therefore, Taiwan’s banana industry had the wrong operating strategy. This study collected data from the four most prominent banana-producing counties (Taichung, Nantou, Kaohsiung, and Pingtung) and used production efficiency and data envelope analysis to compute banana production efficiency, status of profit and loss, competitive potential, and productivity from the “Agricultural Production Yearbook” from 2010 to 2015. The results revealed that price stability was the most crucial strategy of Taiwan’s banana market. Taichung City had the lowest input cost and best technical efficiency but was inferior to Nantou County regarding scale efficiency. However, Kaohsiung and Pingtung had superior scale efficiency but inferior technical efficiency, input cost, and precautions taken against typhoons. Bananas are an   essential economic fruit tree in Taiwan. In the 1960s, Taiwanese bananas became popular in Japan because of their strong aroma and rich taste. In 1967, Taiwanese bananas occupied a market share of 90% of the Japanese market, and Taiwan was known as the “Banana Kingdom.” The new banana industry earned a considerable foreign trade surplus for Taiwan. However, as a result of yellow leaf disease, the “Banana Kingdom” has since become history. No research has analyzed the production efficiency of the banana industry in Taiwan. Therefore, this study used data of the annual report on agricultural production and costs of the Agricultural and Food Administration of the Executive Yuan Agricultural Committee. Data envelopment analysis was used to understand the productivity of major producing areas of Taiwan’s banana industry. The results indicated that Taichung City and Nantou County had higher pure technical efficiency but lacked scale efficiency. If these areas expanded their production scale, they would have higher productivity. Kaohsiung City and Pingtung County have reached an economic scale; however, they still must strengthen the effective use of input factors.

Key words: EDA Window Analysis, Economic Scale, Data envelope analysis 

Attachments:

1028 Final.pdf

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185 kB