Profitability and risk of sugar cane production of two land tenure arrangements in north region of São Paulo State

• Grant number: 07/07849-0
• Support Opportunities: Regular Research Grants
• Start date: March 01, 2008
• End date: February 28, 2009
• Field of knowledge: Agronomical Sciences - Agronomy
• Principal Investigator: Maura Seiko Tsutsui Esperancini
• Grantee: Maura Seiko Tsutsui Esperancini
• Host Institution: Faculdade de Ciências Agronômicas (FCA). Universidade Estadual Paulista (UNESP). Campus de Botucatu. Botucatu , SP, Brazil

Abstract

The aim of this work is to evaluate the profitability of sugar cane production, in North Region of Sao Paulo State, in land owner condition, under two arrangements: the owner operator and share rental tenure arrangements, considering the changes in parameters that influence the ATR value, base for sugar cane payment. For each arrangement, it was developed an economic return and risk model, identifying critical variables and the respective impacts in the variability of owner operator and share rental profitability. The Monte Carlo Simulation Method will be used to map the risk. The critical variables for the owner operator arrangement are sugar and alcohol prices, yield, quality parameters as fiber content and cane juice purity, and production costs. For the rental share arrangement, the main risk variables are sugar and alcohol prices, and yield. To evaluate the return and risk in both arrangements the following indicators will be estimated: statistics measures of profits, sensibility analysis and risk percentis. The results can help land owners to take decision, under risk conditions, among produce sugar cane or to rent fields to sugars mills. (AU)