American Journal of Business Management, Economics and Banking ISSN (E): 2832-8078 Volume 17, | October, 2023 P a g e | 101 www.americanjournal.org AN ECONOMIC STUDY OF THE ITEMS OF PRODUCTION AND MARKETING COSTS FOR THE ORANGE CROP IN SALAH AL-DIN GOVERNORATE FOR THE PRODUCTION SEASON (2022) Balad district as a model)) Amna Hamid Mayouf amnahamed.f@gmail.com Dr. Firas Ibrahim Arhim Tikrit University Agricultural Economics and Extension / Agricultural Economics firas.ibrahim@tu.edu.iq A B S T R A C T K E Y W O R D S The main objective of the study of the orange crop is to identify the most important marketing functions from the producer until reaching the final consumer, and to estimate the marketing costs of the orange crop in the area under study for the year (2022), where a stratified random sample consisting of (65) farmers from the district’s farmers was selected. Information related to the study through a questionnaire designed for farmers, and then collecting information on wholesale markets through a questionnaire number (35) distributed to wholesale market traders, while information on retail markets was also collected through a questionnaire number (35) distributed to retailers, As the share of the producer, wholesaler, and retailer of the consumer’s dinars of the orange crop, respectively, was about (77.47%), (16.21%), (6.30%). The marketing costs for each of the producer, the wholesaler, and the retailer, respectively, amounted to (28.100, 44.9, and 21.86 dinars / ton). We conclude from this that the high marketing costs cause lower profits. We conclude from this and recommend the study to give sufficient importance to scientific research and intensify studies related to the orange crop Such as production, its costs, and marketing. It recommends the need to develop integrated strategic plans for agricultural marketing, which begins before production and purchase of seedlings, and ends with the arrival of the product from standard premiums to the final consumer. Economic study, Production costs, Marketing costs, Orange crop, Cost analysis. Introduction: Fruits are distinguished by their diverse varieties, attractive shapes, appealing colors, and delightful flavors. However, due to the lack of awareness among fruit crop farmers in Salahaddin, there is a challenge in effectively marketing fruits. This makes understanding fruit marketing in Salahaddin American Journal of Business Management, Economics and Banking Volume 17 Oct., 2023 P a g e | 102 www.americanjournal.org essential for delivering products in the desired manner, meeting the preferences of local markets and consumers, and achieving comparable qualities to foreign products in terms of sorting, grading, processing, and pricing based on quality. Since Salahaddin is renowned for its extensive fruit cultivation, and considering the significant production capacity, an applied model was selected to study the marketing of oranges, a desirable fruit with high consumer demand. Oranges are vital fruits due to their content of Vitamin C, B1, B2, and citric acid, possessing significant medicinal value for treating various ailments. Moreover, they are employed in numerous food industries, and their leaves are used in perfumes and cosmetics due to high concentrations of essential oils. Professor Philip Kotler, a marketing expert, defines marketing as a managerial and societal process through which individuals and groups obtain desired products by exchanging valuable offerings with others. He emphasizes its role as a key to achieving organizational goals, involving understanding market needs and obtaining satisfaction more effectively than competitors (Al-Ruba'i, 2012, p. 14). Research Methodology: Research Problem: There exists a clear discrepancy between the selling price of a product and the price paid by the consumer. This is primarily due to elevated marketing costs and profit margins, burdening both the consumer and the producer. Thus, this study aims to explore this issue and address significant marketing obstacles. Research Objectives: This research aims to study: 1. The current status of orange marketing in Salahaddin province. 2. The economic study of production and marketing costs for orange crops. Research Significance: The significance of this research lies in understanding the importance of fruit marketing for regions like Salahaddin and Iraq. This includes addressing obstacles and difficulties in efficiently delivering studied fruits to end consumers with minimal time and cost. Research Hypothesis: The study hypothesizes that there is a considerable weakness in the actual marketing functions due to high costs and a lack of proper grading and sorting of fruits marketed to wholesale markets, negatively affecting these products. Data Sources: Data was collected through field visits to fruit markets in the studied region, specifically in Salahaddin province. Additionally, questionnaires were distributed to various market levels, including farmers, wholesale traders, and retail traders. A total of 65 questionnaires were gathered from crop farmers, 35 from wholesale traders, and 35 from retail traders. American Journal of Business Management, Economics and Banking Volume 17 Oct., 2023 P a g e | 103 www.americanjournal.org Agricultural Marketing: Agricultural marketing is a branch of agricultural economics that encompasses economic knowledge facilitating individuals in obtaining optimal marketing services for agricultural goods. This aids in efficiently transferring goods and agricultural products from producers to consumers with minimal costs (Suwaidan & Haddad, 2003, pp. 32-33). Characteristics of Marketing: Key characteristics defining contemporary marketing in organizations include its comprehensive, integrated, economic, and social nature. Marketing involves a range of activities, benefits multiple parties through exchange, necessitates scientific planning, is continuous and dynamic, and isn't confined to for-profit entities (Al-Ruba'awi, 2015, p. 32). Marketing Costs: Marketing costs encompass expenses related to marketing services and operations, such as transportation, storage, sorting, grading, assembly, and sales, both wholesale and retail. These costs also include wages of intermediaries and various marketing-related charges (Al-Daheri, 1980, 199). Marketing costs differ from marketing differentials and margins. Marketing differentials refer to the difference between the selling and buying price of a specific good, while marketing costs are part of marketing margins (Moosaa, 1998, pp. 184-185). Cost Divisions: Costs are divided into several categories: 1. Fixed Costs: These costs remain constant regardless of the quantity of units marketed or sold. Examples include employee salaries and store rents. 2. Variable Costs: These costs vary with the quantity of goods. Examples include labor wages, employee salaries, and interest rates. 3. Social Costs: These costs are diverse and often unquantifiable. They include the consumer's time spent in search and transportation of goods and the stress associated with the process. These are the key points from the provided text. If you need more detailed information or a continuation of the translation, please let me know. ( يوضح متوسط التكاليف المتغيرة لزراعة دونم واحد من محصول البرتقال في 1جدول ) محافظة صالح الدين/ قضاء بلد . Relative Importance )%( Cost per Dunum (Dinar) Variable Cost Items 6.28 55.33 Land Plowing and Preparation 19.95 175.56 Hired Labor 21.18 186.52 Pesticides 16.52 145.46 Fertilization 6.95 61.22 Fuel and Oils 9.83 86.53 Maintenance and Pruning 2.41 21.23 Water and Electricity Costs 11.07 97.46 Transportation Costs 4.50 39.63 Harvesting and Cleaning Costs 1.31 11.500 Other Costs 100 880.44 Total Source: Prepared by the researcher based on the questionnaire form (1 .) American Journal of Business Management, Economics and Banking Volume 17 Oct., 2023 P a g e | 104 www.americanjournal.org Table (2) illustrates the average fixed costs for cultivating one dunum of orange crop in Salah al-Din Governorate / Qadhaa Balad for the production season 2022. Fixed Cost Components: Cost per Dunum (Dinar) Relative Importance )%( Family Labor 156.700 24.07 Land Rent 4.800 0.74 Depreciation 489.55 75.19 Total 651.05 100 Source: Prepared by the researcher based on the questionnaire form (1 .) Table (3) illustrates the calculation of average yield per hectare (donum) . Total Average Production: Tons Total Average Area: Dunums Average Yield: Production / Total Area 111.95 4.892 22.88 Source: Prepared by the researcher based on the questionnaire . Table (4) displays the total costs per hectare and per ton of oranges for the production season of 2022. Components of Total Costs Cost per Dunum (IQD/Dunum) Cost per Ton (IQD /Ton) Cost per Kilogram (IQD /Kg) Relative Importance (%) Variable Production Costs 880.44 38480 384.80 57.48 Fixed Production Costs 651.05 28454 284.54 42.52 Total 1531.49 66934 669.34 100 Source: Compiled and calculated by the researcher. Table (5): Estimation of marketing costs for orange crop producers during the agricultural season (2022). Components of Marketing Costs Value • Relative Importance (%) Transportation Cost 18000 64.06 Packaging and Grading Cost 1800 6.41 Unloading and Loading Cost 4500 16.01 Auction Entry Fee Cost 3800 13.52 Total 28100 100 Source: Calculated by the researcher based on the questionnaire Obstacles and Challenges Facing Orange Producers in Marketing Operations in Salahaddin Governorate / Balad District for the 2022 Production Season: Through the questionnaires distributed to the farmers, they were asked about the most prominent obstacles and challenges they face, which were characterized as follows: 1. Limited wholesale prices. 2. The abundance of imported oranges when the local product is available. 3. Competition among farmers and price reduction. American Journal of Business Management, Economics and Banking Volume 17 Oct., 2023 P a g e | 105 www.americanjournal.org 4. Increase in prices of fertilizers and pesticides. 5. Increase in transportation and fuel prices. Table (6) - Marketing Costs and their Relative Importance for Wholesale Traders for Orange Crop in Salah al-Din Governorate / Qadaa Balad for the Production Season 2022 . Marketing Costs Categories Value • Relative Importance (%) 1. Permanent Employee Wages Costs 14.300 31.85 2. Loading Costs 6300 14.03 3. Shop Rental Costs 9800 21.83 4. Unloading Costs 5,500 12.25 5. Water and Electricity Costs 1.80 4.00 6. Other Wages Costs 7,200 16.04 Total 44.9 100 Total in Dinars per Kilogram 44.9 Source: Prepared by the researcher based on the questionnaire form (2 .) • The Main Obstacles and Challenges Facing Wholesale Traders: These problems and obstacles were identified through the questionnaire survey. 1. Debts and deferred payments to some retailers. 2. Price monopolization by dominant wholesale traders. 3. Lack of a formal market in the study area. 4. Congestion and security checkpoints that increase transportation costs and difficulties. Table (7) illustrates the total marketing costs incurred by the retailer for the orange crop . Marketing Costs Categories Value (IQD/Kg) • Relative Importance (%) Transportation Costs 10.600 48.49 Unsold Quantities Costs 0.200 0.92 In-Shop Incurred Costs 11.06 50.59 Total Retailer Marketing Costs per Kilogram 21.86 100 Total Retailer Marketing Costs per Ton 21.86 Source: Prepared by the researcher based on the questionnaire form (2 .) The Major Obstacles and Challenges Facing Retail Traders: 1. Poor transportation due to road conditions. 2. High number of imports when local products are available, leading to a decrease in local product prices. 3. Wholesale traders monopolizing prices, negatively affecting retail traders. 4. Lack of refrigerated storage and cooling facilities. 5. Limited access to refrigerated storage and cooling facilities. American Journal of Business Management, Economics and Banking Volume 17 Oct., 2023 P a g e | 106 www.americanjournal.org Table (8) shows the distribution of shares among the producer, wholesaler, and retailer from the consumer's dinar. The Crop The Prices: Dinars per Kilogram Distribution of Consumer Dinars (%) Farm Wholesale Retail Share of Farmers (4) % Share of Wholesaler (5) % Share of Retailer (6) % Orange 860 930 1110 77.47 6.30 16.21 Source: Calculated and compiled by the researcher based on the questionnaire forms (1, 2, 3). 1. Farmer's Share (4) = (Farm Price / Retail Price) × 100 2. Wholesaler's Share (5) = ((Farm Price - Wholesale Price) / Retail Price) × 100 3. Retailer's Share (6) = ((Wholesale Price - Retail Price) / Retail Price) × 100 Table (9) illustrates the relative importance of the components of the marketing margin between the product price and the consumer price . The Crop Marketing Margin (Dinar per Kilogram) Relative Importance of Marketing Costs for the Product (%) Relative Importance of Marketing Costs for Wholesalers (%) Relative Importance of Profits for Wholesalers (%) Relative Importance of Transportation Costs for Retailers (%) Relative Importance of Marketing Costs Incurred by Retailer at His Shop (%) Relative Importance of Retailer's Profits (%) Orange 250 11.24 17.76 28 0.08 4.42 72 Source: Compiled by the researcher . 1. The relative importance of total profits for wholesalers occupied the first rank, with a marketing margin of 28%. 2. The second rank was taken by the relative importance of total costs borne by retailers, which amounted to approximately 4.42%. 3. The third rank was held by the relative importance of costs borne by the producer, estimated at 11.24%. 4. The fourth rank was occupied by the relative importance of costs borne by wholesalers, averaging 17.76%. Retailer's profits had the lowest relative importance, amounting to 0.72% of the marketing margin between the product price and the consumer price, representing retailer profits. Conclusions: Based on the obtained results and the collected data through the questionnaire for each stage of the marketing channels for oranges during the production season of 2022, the study drew several conclusions, including: American Journal of Business Management, Economics and Banking Volume 17 Oct., 2023 P a g e | 107 www.americanjournal.org 1. Marketing costs for both the producer, wholesaler, and retailer were 28.100, 44.9, and 21.86 JD/ton respectively. This indicates that higher marketing costs lead to decreased profits. 2. The producer's share of the consumer price reached about 77.47%, indicating efficient marketing of the orange crop within the study sample. A higher producer share indicates a more efficient marketing system. 3. Wholesalers' total profits held the highest relative importance, accounting for 28% of the marketing margin. The relative importance of total costs borne by retailers was about 4.42%, while costs borne by the producer were estimated at 11.24%. Wholesalers' costs held an average of 17.76%, and retailer's profits held the lowest relative importance at 0.72%. Recommendations: 1. It's crucial to develop integrated strategic plans for agricultural marketing that start before production, encompassing the purchasing of seedlings, and continue through product delivery to the final consumer. 2. Implement taxes on imported crops, particularly during the local production season, and restrict importation to stabilize prices and ensure production continuity. 3. The government should improve roads and transportation infrastructure, facilitating the movement of products to reduce obstacles and additional costs. 4. Establish standardized, globally-compliant model markets and increase the number of wholesale markets to mitigate the power of monopolies and price control within the markets, while providing high-quality cold storage facilities. Sources: 1. Rabaei, Youssef Abd Rashid (2012), "Marketing Costs", University of Science and Technology, Sanaa, First Edition. 2. Sweidan, Nazim Moussa, and Haddad, Shafiq Ibrahim (2003), "Contemporary Marketing Concepts", Dar Al-Hamid for Publishing and Distribution, Amman, Jordan. 3. Rabiaawi, Saadoun Hamoud et al. (2015), "Supply Chain Marketing", First Edition, Dar Ghaida for Publishing and Distribution, Amman, Jordan. 4. Moussa, Murad Zaki, and Al-Muqri, Amer Al-Vittori (1998), "Principles of Agricultural Marketing", Management of Publications and Publishing, University of Al-Fateh - Tripoli, Great Jamahiriya. 5. Yassin, Mahmoud Mohamed, and Abdul Aziz, Ali Mahmoud (2008), "Introduction to Agricultural Marketing Science", Al-Rawda Printing House, Damascus, Syria. 6. Food and Agriculture Organization (FAO), (http://www.fao.org/faostat/en/#data/).