Optimal Allocation of Crop Production Factors in Kerman Province of Iran

Kerman is the largest province in the country and agriculture is one of the main economic sectors in this province. In this study the value of marginal production was computed for factors of production of 9 major crops in Kerman province. The sample size consisted of 679 cultivators in year 2002. The 9 crops composed of wheat, barley, maize, chickpea, beet root, sunflower seed, lentils, cotton and potato. The value of marginal production for each factor was computed by using factor prices, and estimating Cobb-Douglas and Transcendental production function. The present allocation pattern of production function. The present allocation pattern of production factors were examined based on the values of marginal production, price of the production factors and economic principles. The results indicated the existing pattern is not optimal and a reallocation of resources can lead to a rise in profit and income of farmers.