SUPPLY‐MAXIMISING AND VARIATION‐MINIMISING REPLACEMENT CYCLES OF PERENNIAL CROPS AND SIMILAR ASSETS: THEORY ILLUSTRATED BY COCONUT CULTIVATION

Abstract

The paper argues that maximum sustainable yields rather than net present values often need to be considered for policy and identifies the length of the replacement cycle required for maximum sustainable yield or supply in multi‐point or interval output time‐phased production conditions, such as apply to perennial crops and to similar productive processes. It enables point‐input point‐output models which have been well explored (for instance, for forestry) to be treated as special cases. A virtue of the analysis is its use of a simple technical relationship to determine the replacement rate of a perennial crop to maximise sustainable yield. The analysis is illustrated by an empirical example drawn for the cultivation of the Sri Lankan ‘tall’ variety of coconut.