Economies of Scope in Wheat and Barley Production in North Korasan and Khorasan Razavi Provinces

Document Type : Research Paper

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Abstract

Economies of scope evaluate the amount of cost reduction in a joint production system in compare with a commercial one. Investigating the economies of scope in agricultural enterprises provide the possibility of reduction in production costs and usage of economics advantages. This article estimated economies of scope for wheat and barley in North Khorasan and Khorasan Razavi Provinces applying cost approach on data of 2007. Results showed that economies of scope in these provinces are 55 and 57 percent, respectively. So, according to the results, wheat and barley farmers in these two provinces can merge in a firm and then reduce their costs.

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