Analysing costs for bio-based materials in agriculture : an application of activity based costing on crop coverage
Abstract: The transition to a sustainable economy is a major challenge of our time that concerns most sectors in our society. Environmental, economic and social aspects are all important dimensions of sustainability, and agriculture is one of the most essential industries for the transition. The implementation of a bio-economy, i.e. an economy based on bio-materials and products, is seen as a key strategy towards sustainability. In this thesis a bio-based method for crop coverage in was investigated. By analysing activities applying a process perspective, information about cost systems and the economics of using bio-materials in agriculture were revealed. The main purpose of this study was to conduct an economic analysis of a bio-based production method in agriculture. The aim was to investigate existing cost activities which occur when using mulch film, and then to calculate the cost outcome for the different types of mulch film. The aim also included to find differences and similarities between the different types of mulch film, regarding the cost activities outcome. Activity Based Costing, which requires both quantitative and qualitative data, was the main theoretical framework in the analysis. The study also applied the mixed methods as research method. For this study, it means collecting and analysing both quantitative and qualitative data about the activities performed in the process. Six respondents were interviewed regarding the mulch film process and the costs it generates. The analysis was made by comparing the data from the respondents and the cost calculated with ABC. The result of the mulch film process was structured as phases containing activities, which occur during the mulch film process. Purchase, storage, lay out, maintenance service, end of season and final management were identified as existing phases. Delivery material, stock-keeping, setup machine, placing, and maintenance service were identified as principal activities existing in the phases. The activity of cultivation, collection and recycling depended and varied between the different mulch film materials. The analysis was conducted from a process perspective. All indirect costs (generated from the cost activities), as well as the direct costs (direct material and labour), were compared to one another as costs per hectare. The study shows the resources with the largest influence on the total result; extra labour and fuel. In some cases, indirect material such as irrigation tubes had a significant share of the indirect costs. A further analysis was made by comparing the bio-based mulch film process with other mulch film alternatives. The analysis also contains a critical reflection of the limitations of this study and the ABC method. The process perspective provided an informative overview of the costs connected to the mulch film process. The ABC method could probably be a useful and informative tool for understanding economic consequences of implementing certain sustainable methods in agriculture.
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