Average Annual Profit Research Articles

Heavy steers and heifers run at low stocking rates enhance drought resilience in a pastoral region of Australia

CONTEXTThe semi-arid mulga lands of the Southern Rangelands of Western Australia experience frequent droughts. Maintaining a profitable animal grazing enterprise whilst preserving rangeland condition requires selecting an appropriate stocking rate and herd structure. OBJECTIVEWe construct and apply bioeconomic models of beef enterprises for the semi-arid Southern Rangelands of Western Australia, to assess the profitability and relative riskiness of three different livestock production systems and three different stocking rates when exposed to different frequencies of drought. METHODSWe construct bio-economic models of herd structures that separately focus on producing either: (i) 200 kg heifers and 210 kg steers (ii) live export of 340 kg heifers and 380 kg steers, or (iii) 500 kg heifers and 560 kg steers for local slaughter. The models are applied to assess the financial and production resilience of each herd structure for three different stocking rates, given the incidence of drought and various price scenarios. RESULTS AND CONCLUSIONSComparing the three herd structures, option (iii) produces more kilograms of beef at an equivalent grazing pressure and recovers fastest from drought. Considering cattle prices over the 7-year period ending in 2021, live export and slaughter production systems generate comparable financial returns to graziers' actual reported results. Under two different scenarios of future prices, option (iii) provides the most profitable outcome. Applying a stocking rate that is 66% of a recommended stocking rate allows use of residual rangeland feed (known as ‘haystack’) during drought, generates greater profit, and produces a more stable herd size and income. Not matching the haystack with the longest modelled drought reduces the grazier's average annual profit by $172,000. The optimum herd structure identified in this study targets the production of 500 kg heifers and 560 kgs steers for local slaughter, and relies on a conservative stocking rate that leaves enough haystack to increase resilience if ever consecutive droughts occur. SIGNIFICANCEIn the Southern Rangelands of Western Australia, there are financial and environmental merits in a herd structure that produces heavy steers and heifers for local slaughter yet is underpinned by conservative stocking rates.

Unraveling the interplay of human decisions and flood risk: An agent-based modeling approach

Flooding is a frequent and highly destructive natural disaster that requires effective flood management policies. This paper addresses the limitations of traditional flood risk assessment methods, focusing on the interplay between human decisions and flood risk using an integrated approach. Agent-Based Modeling (ABM) is employed to capture the social behavior of government, households, and farmers in three flood management scenarios. The study is conducted in the Fall River watershed, Idaho, USA, over a 30-year period. The results highlight the important influence of crop selection decisions on flood damage outcomes, with alfalfa emerging as the preferred crop due to its profitability and lower damage potential (around 67 % crop loss compared to more than 81 % for crops like corn, barley, and wheat). The levee scenario is identified as the most effective strategy, significantly reducing flood damage by more than 37 % and generating the highest average annual profit for farmers. The study emphasizes the need for comprehensive flood risk management strategies that address both frequent and rare flood occurrences in mitigating flood damage and promoting community resilience. By integrating human-flood interactions into flood risk assessment, this study offers valuable insights for Policymakers and stakeholders can utilize the research implications to develop effective strategies that mitigate damage and enhance community resilience.

Economic rationale for the development of small vertically diversified pork production enterprises in Ukraine

Implementing the vertical diversification strategy for pig-breeding enterprises in Ukraine is one of the factors in increasing their economic efficiency and competitiveness. Mastering the following interrelated links of production and sale in animal husbandry increases enterprises' financial stability and economic security. The article economically substantiates the expediency of capital investments in developing vertically diversified pork production enterprises in Ukraine. The need for investments for the formation of fixed and working capital for the implementation of the project has been determined. The main operating costs for the organization of pig breeding, slaughter, and the sale of meat through the direct sales channel in the amount of 200 tons per year have been calculated. Planning of workforce needs for project implementation has been carried out. The leading indicators of the economic efficiency of capital investments for the production and sale of pork in the newly established enterprise have been determined. According to the study results, the relatively high investment attractiveness of developing small vertically diversified pork production enterprises in Ukraine with an orientation to local markets is substantiated. It has been established that for the implementation of the proposed project, about 1.1 million euros of advanced capital is needed, which is expected to pay off in 3.5 years. The project's five-year net present value has been determined to reach 690,000 euros at a discount rate of 2%. Accordingly, the projected internal rate of return will exceed 26%. The average annual net profit during the project implementation period will be 268 thousand euros, with an average operating cost of 457 thousand euros, allowing us to achieve 65% profitability of production and 32% profitability of pork sales. The projected average net return on capital for the project implementation period is expected to be 35%. The development of vertical diversification in small pork production enterprises in Ukraine will increase the added value and productivity of the involved financial, labor, material, and technical resources.

The structure, conduct, and performance of the hatchery segment of the aquaculture value chain in Bangladesh

IntroductionSeed production has experienced significant growth in Bangladesh over the last decade, driven by the increasing number of hatcheries. The hatchery segment plays a crucial role in the overall growth and development of aquaculture in the country. Understanding its structure, conduct and performance is essential for assessing its impact on the productivity and profitability of aquaculture farms. However, there is a limited number of methodologically rigorous studies focusing on the hatchery segment in Bangladesh. The study aimed to fill the gap in the exiting literature by conducting a methodologically analysis of the hatchery segment of aquaculture value chain in Bangladesh.MethodsThis study was conducted in seven of the main aquaculture producing districts in southern Bangladesh. A comprehensive structured survey was conducted between May and August 2022 with 66 enterprises, including 42 carp+catfish, 16 tilapia, and 8 crustacean hatcheries.Results and discussionThe major findings and their implications are as follows. (1) The number of hatcheries increased by 15% over the past decade, with a 27% increase in fish hatcheries and a 47% decrease in crustacean hatcheries. (2) Carp and tiger shrimp were the most commonly produced fish and crustacean seeds, contributing 67% and 99% of volume and 66% and 97% of sales value, respectively. (3) The hatcheries were family-owned and operated enterprise, and generated a total 2,491 full time equivalent (FTE) jobs. (4) Hatcheries used 86% of their broodstock annually and replaced them regularly for improving quality and avoiding inbreeding. (5) 18% of hatcheries reported facing diseases and/or water quality problems, but mean economic loss was only 0.71% of seed sales value, which is a low level of loss and waste. (6) Average annual net profit margin was relatively modest, averaging 54% of the gross revenue, which suggests the existence of competitive seed production and marketing. The results showed that the hatchery segment in southern Bangladesh appears to be dynamic, well developed, efficient, and relatively competitive.

About striped venus clam (Chamelea gallina) fisheries in the Black Sea: Management and economic aspects

Chamelea gallina has an important role in Turkey and the Black Sea fisheries. This study aimed to determine the structure of management and socio-economic situation of the Chamelea gallina fisheries The socio-economic evaluation of 27 vessel owners revealed that all of them had a family from a fisheries background, and they had an average professional experience of 24.3 years. The average gross annual production value of the boats was found as 123,214 US$/boat. The average gross annual profit of the boat owners was calculated as 58,552 US$/boat, while the average annual net profit was 43,289 US$/boat. It was found that the return on investment (ROI) was 21%, financial profitability was 21.4%, and the turnover rate of the investment was 59.8%. The boat size and engine power were not effective on the income of the boat owners. A positive correlation was observed between the number of days in the sea and fisheries income (p<0.05). Some boats could make losses without tax-free fuel subsidies independent from the total catch amount of the fishing fleet. An increase in the number of fishing boats would decrease the average income per boat. This situation could increase the pressure on the resources.

Socio-Economic Importance of Beekeeping in the Togo Plateau Region

Beekeeping is an agricultural activity that was more or less developed and practiced in different ways in the different regions of Togo. In recent years, in certain regions of the country, such as the plateau region, we have noticed a special consideration of the populations for beekeeping, which they practice as a subsistence activity. It is with the aim of seeing if a beekeeper can live exclusively from this activity that the study was carried out. This work has to evaluate the economic contribution of the beekeeping activity in the life of the producers of the region of the plateaus of Togo.&#x0D; To achieve this objective, socio-economic surveys were carried out on the basis of a semi-structured questionnaire via individual interviews. The questionnaire took into account: the profile of the beekeeper, annual investments, number and type of hive used, harvested products, the quantity obtained per hive and per year, selling price.&#x0D; The results obtained on the sale of honey and wax, showed that the beekeeping activity would be economically profitable. For the evaluation of profitability, the cost/revenue method was used. Production costs relate to materials and various expenses incurred. Gross receipts were estimated from cash flows from the sale of hive products. After investigation of the turnover, the profits are calculated by difference between income and expenditure for each product harvested for the year 2019. In short, the activity allows an average annual profit of 766.600 FCFA for beekeepers harvesting only honey and 829.000 FCFA for those harvesting both honey and beeswax, for an average number of 33 hives per producer.&#x0D; This study has shown that a serious beekeeper who is well organized and has at least thirty hives can normally make a good living from this beekeeping activity.

Economic contribution and social welfare of recreational charter boat fisheries in the northeast Atlantic: The cases of Galicia (Spain) and Madeira archipelago (Portugal)

Recreational charter boat fisheries provide alternative economic development to traditional commercial fisheries, especially to coastal communities in warm seas. Charter boat fishing has been little studied in temperate regions, and the factors that trigger its development and social contribution to fishing communities are unknown. We performed an economic analysis of recreational charter boat fisheries in the Eastern North Atlantic to assess their contribution to social welfare. We selected two case studies located in Galicia (NW Spain) and Madeira archipelago (Portugal). The two cases differ in the socioecological attributes in which recreational charter boat fishing is developed (e.g., relevance of commercial fishing, tourism, or targeted species), that were included in the assessment. Up to 7 charter fishing companies were identified in Galicia (10 boats) and 14 in Madeira (18 boats), and information on the costs and benefits of the activity were collected by a questionnaire answered by company managers and skippers. Charter boats in Galicia are operating throughout the year, and anglers mostly engage in bottom fishing targeting demersal predators like ballan wrasse (Labrus bergylta) and European seabass (Dicentrarchus labrax) that they retain. Despite the strong seasonality of the fishery in Madeira, focused on summers, the fishing effort is higher than in Galicia. On average, charter boats go fishing for 39.3 ± 41.5 (SD) fishing journeys and take 2 500 anglers on board per year in Galicia, while in Madeira they fish 63.7 ± 32.7 journeys and take 3 200 anglers on board. Anglers target in Madeira pelagic top predators like blue marlin (Makaira nigricans), or some tuna species, e.g., bigeye (Thunnus obesus), by trolling in a catch and release fishery. The economic balance of companies was more favorable in Madeira, with an average gross annual profit of € 28 883 ± 30 755, while economic yield in Galicia was € 4 444 ± 7 916. We also applied a travel cost method to assess the recreation demand of recreational fishing trips based on a questionnaire answered by 150 clients in Galicia and 55 in Madeira. We estimated the visitor surplus mean value to be € 1 385 per year in Galicia (95% confidence interval, CI95%= € 1 219 – € 1 550), and € 1 738 in Madeira (CI95%= € 1 433 – 2 043). The social annual recreation value of Galician fishery was worth € 3.4 Million, ranging between € 3.0 M and € 3.8 M, a value well below the annual economic impact generated by commercial fishing (€ 700 M). The recreation value of the charter boat fishery in Madeira, € 6.3 M, ranging between € 5.2 M and € 7.5 M, is comparable to the annual economic impact of commercial fishing, that contributes to the local economy with € 12 M.

ĐÁNH GIÁ THỰC TRẠNG PHÁT TRIỂN CÁC MÔ HÌNH KINH TẾ SINH THÁI Ở LƯU VỰC SÔNG KÔN, TỈNH BÌNH ĐỊNH

The eco-economic model is one of the economic development orientations associated with environmental protection, ensuring sustainable development for the territories. According to the eco-economic approach, the article has assessed the current status of developing eco-economic models in the Kon river basin, Binh Dinh province by the method of participatory rural appraisal and cost-benefit analysis based on three values: present value (PV), net present value (NPV), benefit-cost ratio (BCR). The results show the households have applied many different eco-economic models in agricultural and forestry production (18 types of models). Most of the models in the basin have components: fields, gardens, and barns. The model of rice field - garden - barn (Ru-V-C) accounted for the highest percentage (33.07%). The model of rice field - garden - pond - barn - forest (Ru-V-A-C-R) has the highest average annual profit of 237 million VND\year after discounting. Models with 3-4 components have created a link in the material-energy cycle in production, taking advantage of by-products, and protecting the environment. The evaluation results are the basis for proposing eco-economic models suitable to the potential and resources of the Kon river basin, Binh Dinh province.

Contribution of Maize-based Products to the Livelihood of Smallholder Processors in Rural Northern Nigeria

In the smallholder value chains of maize, diversification of utilisation is an essential strategy towards enhancing the benefits drivable from the increase in maize production. This article identifies the contribution of maize-based products on poverty level among smallholder processors. The study, which was conducted in 30 rural communities in northern Nigeria, involved Focus Group Discussions and survey of 300 smallholder processors of maize-based products. Descriptive and inferential analyses were used. The results show that average annual profit among the interviewed smallholder processors of maize-based products was approximately N425,506 (about US$1,400). These processors faced several constraints which tend to keep them under poverty trap (vicious cycle of poverty). The result of the estimated two-step Tobit model shows that, with necessary interventions, profit from maize-based products has the capacity of keeping these processors out of poverty trap. The result indicates that as profit from maize-based products increases, the poverty probability index that household is not below poverty line of $1.90/day at 2011 purchase–power parity increases ( p &lt; 0.05). Thus, household poverty among rural smallholder processors of maize-based product could be reduced drastically through interventions targeted at mitigating the identified constraints.

An Economic Analysis of Brownfield and Greenfield Industrial Parks Investment Projects: A Case Study of Eastern Slovakia.

The implementation of industrial park investment projects in relation to the use of brownfields and greenfields is a constantly debated issue. Brownfields are unused areas, often with devastated building objects and environmental burden that pose potential risks to the investor but also contain the possibility of using the available infrastructure and facilities for the use of the proposed investment project. The objective of the study was to assess the positive and negative investment of these types of sites based on the available information on the possibilities of investing in the implementation of the brownfield industrial park compared to the greenfield in the western part of East Slovak region and to identify a more appropriate alternative of investing. Based on the assessment of investment in the industrial parks, the appropriateness of the allocation of investment capital was assessed through the simple additive weighting (SAW) method. The SAW approach allows us to objectivize the weighting value of selected factors and thus assess the appropriateness of the allocation of investment capital. Based on the results, it is more advantageous to allocate the investment capital to the greenfield as the return on investment of the project expressed as a percentage of the average annual profit was 9.5%, compared to brownfield with only 2.9%.

Performance analysis and multi-objective optimization of the high-temperature cascade heat pump system

This paper presents a high-temperature cascade heat pump system with a high compression ratio for recovering the waste heat of the chemical plant and replacing the steam. To analyze the economic and the thermodynamic performance of the high-temperature cascade heat pump, a mathematical model, considering energy, exergy, economy and environment, has been developed under different heat source inlet temperature. The proposed system here indicated good stability and feasibility under various operating conditions according to the simulation results. However, as the heating capacity and the annual net profit were found to be conflicting with each other, a multi-objective optimization method was developed to solve this problem. In addition, the technique for Order of Preference by Similarity to Ideal Solution method was selected as the decision-making method to search for the final optimal result of the system. The optimization results showed that if the optimized heating capacity project was selected, the average heating capacity and the average annual net profit were 2.8% and 6.7% lower than their maximum possible values. At the optimal heat source inlet temperature of 71 °C and condensing temperature of 145 °C, the heating capacity of the system was 498.9 kW and the payback period was 3.9 year.

Transitioning from conventional continuous grazing to planned rest-rotation grazing: A beef cattle case study from central Texas

Debate on the superiority of rotational or continuous grazing continues, but proponents of each call for additional research to enhance grazing management decisions. The short-term impact of transitioning from continuous grazing to an alternative grazing system is not well understood even though the transition can require substantial changes in infrastructure and management decisions related to forage availability, grazing duration and livestock movement, forage planting, and supplemental feeding. The objective of this five-year case study in a humid, subtropical environment was to evaluate real-world challenges and opportunities for beef cattle operations transitioning from conventional continuous grazing to a planned rest-rotation grazing system. The experimental data and observations (i.e., forage production, diet quality, cattle response, economics, and soil health) showcased that management changes under the planned rest-rotation system had potential for increased annual forage production, improved soil health (on cultivated grazed paddocks with multispecies forage crops, but not on grassland), and reduced costs; however, conventional continuous grazing produced higher body condition scores for cows and higher revenue. Average annual profits (~US$5.32 ac⁻¹ [US$2.15 ha⁻¹]) were similar for both grazing systems considering all economic factors. Key lessons learned and challenges faced include the difficulty of no-till establishment of cool-season multispecies forage in cultivated grazed paddocks and the importance of adequate fertilization of supplemental forage crops and dietary supplementation in the cold season.

Ethical and Political-Economic Dimensions and Potential Reforms of the Hybrid Leveraged, High Frequency, Artificial Intelligence Trading Model

The average annual profits before fees of the $10 billion plus Renaissance Technologies’ hybrid Medallion “Leveraged, High Frequency, Artificial Intelligence (LHFAI)” trading hedge fund between 1988 and 2019 were about 66 percent. Total trading profits during this period were over $100 billion. The fund has never had a losing year. The fund is not open to the general public. First, distinctions among, in more or less historical order, the traditional market-maker trading model, the hedge fund trading model, the artificial intelligence trading model, and the hybrid LHFAI trading model are discussed. Second, the micro components of the LHFAI trading model are explained in the context of Renaissance Technologies’ Medallion Fund. Third, key positive contributions of the model with respect to profitability, low annual volatility, market liquidity, and intellectual property development; negative ethical issues concerning exclusive access, tax fairness, financial transparency, shared responsibility for losses and systemic risk, and short vs. long-term capital allocation are discussed. Potential reforms that retain the positives, reduce the negatives, and that could positively transform the model are discussed. Fourth, potential impacts that the potential reforms might have on the macro LHFAI form of finance capitalism and the larger finance capitalism political-economic system are considered. Fifth, conclusions are offered and discussed.

OPTIMIZATION OF THE CROPPING PATTERN IN CENTRAL YASIN DISTRICT GHIZER, GILGIT-BALTISTAN

In this research study Linear Programming (LP) Model is applied to determine the maximum profit from the three major crops (wheat, maize and alfalfa) in Central Yasin District Ghizer, where agriculture is the main source of income, however, due to population growth the agricultural land is used to construct buildings, which has minimized the land for agricultural use. In such a challenging condition a method to suggest the cultivation of a maximum profitable crop is the need of time. Therefore, LP model is an appropriate method to decide the profitable crop and to maximize the profit. The study was conducted employing quantitative method of research, with the purpose to compare the maximum profit per annum from the major crops, and to determine the beneficial crop among the three major crops in Central Yasin. All the farmers of the study area who grow the crops were the target population of the study and samples from the target population were selected using random sampling technique. Data was collected by conducting survey in the study area, where self-made questionnaires were distributed among the samples individually and responses were noted on the spot. The raw data is organized and analyzed using Microsoft Excel for LP model formulation. The result showed that the average land used for the cultivation of wheat, maize and alfalfa in the study area is 0.924 acres, 0.664 acres and 0.75 acres respectively. Furthermore, results of the LP model showed that alfalfa is the optimal solution rather than wheat and maize, and it (alfalfa) gives an average annual net profit of Rs.195634.488.

PRODUCTION AND MARKETING ECONOMICS OF HONEY FROM APIS CERANA IN DANG DISTRICT OF NEPAL

Beekeeping with Apis cerana is a vehicle to run livelihood of rural farmers in Nepal. Honey production is major source of cash income for them. This study was conducted in Dang, Nepal, with the aim to analyze production and marketing economics of honey form A. cerana. Total 55 beekeepers, two beekeeping groups, two collectors and five retailers were selected randomly for interview. The results showed that on average farmers holding 14.55 bee hive with productivity of honey 6.12 kg per hive. The benefit cost ratio was 3.71 and average annual net profit was NRs. 2,646.96 (USD 23.06) per hive. Human labour hours in colony management, number of beehives and number of honey harvest per year were significant factors affecting honey production. Ninety two percent of honey produce was actually marketed through three major marketing channels. Most of the producers directly sold honey to consumer and had higher farm gate price. Overall farm gate price, price spread, producer’s share and marketing efficiency index of honey was NRs. 671.06/kg, NRs. 93.15/kg, 84.12 percent and 5.30 respectively. Absconding behavior of A.cerana was the top production problem and lack of wholesale marketing points was top most marketing problem perceived by farmers.

Does having a semimandatory dividend policy enhance investor confidence? Research on dividend-financing behavior

Enhancing investor confidence is crucial for sustainable and stable development of the capital market. Does having a semimandatory policy to pay dividends help to enhance investor confidence? What is the origin of the cash dividend paid by companies to meet regulatory requirements so as to enhance investor confidence? Based on these considerations, this paper uses the exogenous policy shock that in 2006 the China Securities Regulatory Commission required listed companies to pay accumulated dividends of no less than 20 % of average annual distributable profits and adopts a panel difference-in-difference estimation strategy to explore whether this new policy has significantly enhanced investor confidence. In addition, it explores the source of external financing for cash dividends by examining dividend-financing behavior. The results show that the semimandatory dividend policy has led to new dividend-financing behavior by listed companies. The cash dividend paid by companies comes mainly from external financing, especially a net increase in debt. The paper expands the traditional theory of dividend payment and provides a reference point for decision-making by shareholders, company managers, and regulatory agencies.

Economic and environmental optimization for a biogas supply Chain: A CVaR approach applied to uncertainty of biomass and biogas demand

This paper explores the impact of biomass availability and biogas demand on the economic and environmental performance of a biogas supply chain. A mixed-integer nonlinear programming model is proposed in a multi-objective form, then the problem is reformulated as a single objective problem with a multi-scenario strategy solution and a CVaR approach. The uncertainty associated with biomass availability and biogas demand is obtained from historical data of the central-western region of Mexico. Two case studies are presented to show the applicability of the proposed mathematical model to minimize the criteria gap in economic and environmental functions and to obtain cumulative probability graphs. The results showed that it is possible to minimize the gap between the objective functions, aiding the decision-making process. The average annual profit is at least 1,740,600 € with annual emissions of 292,440 tons of CO2.

Corporate Social Responsibility: A Perspective

As Corporate Social Responsibility (CSR) continues to mature, one of the paradigms shifts we’ve seen in recent years is a move towards “values”. CSR motivates companies to be ethically right by contributing socially, economically and environmentally. In 2014, government made mandatory for companies to spend 2 per cent of their three-year average annual net profit on CSR activities in each financial year, starting from Financial Year 2015. The norms are applicable to the companies with at least Rs 5 crore net profit or Rs 1,000 crore turnover or Rs 500 crore net worth. As an amendment to The Companies Act, 2013, businesses can invest their profits in areas such as education, poverty, gender equality, and hunger.

Insight into the economy of aquaculture production in Czechia: assessment of aquaculture enterprises

We provide a general overview of spatial distribution and the economic situation of aquaculture enterprises in Czechia (the Czech Republic) in terms of revenues, profitability, work productivity, indebtedness and grants. We analysed data available in the State Veterinary Administration and information system of the State Agricultural Intervention Fund. The most significant fish producers (enterprises) are located in the regions of South Bohemia. Aquaculture sector profitability and enterprises profits have been moderately rising since 2010. The profitability in 2015 is roughly the same as that in 2005. The amount of provided grants showed a higher value than the generated average annual profits. The enterprises were not able to generate sufficient resources to finance investments without grants resources. Enterprises that realised financing for larger investments from bank credits showed relatively high levels of indebtedness (micro-enterprises at 95.5%). On the contrary, work productivity was the highest for micro-enterprises. Micro-enterprises had the largest share of revenues in relation to the number of employees. Each group of enterprises is considerably specific and needs an individual approach for the subsequent evaluation.

Factors influencing farmers’ use of the warehouse receipt system in Indonesia

PurposeThe purpose of this paper is to examine the factors influencing Indonesian farmers’ use of the warehouse receipt system (WRS) and their choice of private and public warehouses.Design/methodology/approachPrimary data were collected through questionnaires administered to 500 farmers in two districts, Subang and Cianjur, in West Java Province in Indonesia. Binary logit regression was employed to examine the factors influencing farmers’ use of the WRS. Binary and bivariate probit regressions were employed to determine the factors influencing farmers’ choice of private and public warehouses.FindingsThe empirical results of the binary logit regression revealed that age, land ownership, selling price, the use of the warehouse receipt as collateral security and the availability of transportation facility positively influenced farmers’ use of the WRS, whereas education, income, farm profit and participation in farmers’ group negatively influenced farmers’ use of the WRS. The results of the binary probit regressions revealed that profit, availability of insurance and processing facility positively influenced the farmers’ decision to use the private WRS, whereas education, production, selling price and distance from the farm to the warehouse negatively influenced farmers’ decision to use the private WRS. Age, education, selling price and distance from the farm to the warehouse positively influenced the farmers’ decision to use the public WRS, whereas production and availability of processing facility negatively influenced the decision of farmers to use the public WRS.Practical implicationsThis study highlights the importance of education and government assistance regarding the provision of facilities and price indemnified insurance for successful implementation of the WRS.Originality/valueThis study provides an empirical contribution to the existing literature on the development of WRS in Indonesia. In terms of methods of analysis, previous studies used purely qualitative and descriptive methods, whereas this study employed econometric techniques (i.e. binary logit, binary probit and bivariate probit regressions) to examine the WRS in Indonesia. In addition, whereas previous studies explored the WRS in general, this study investigated the farmers’ use of the public and private warehouses in addition to exploring the WRS in general. Finally, the finding that the average annual profit of non-users was significantly higher than that of the users of the WRS is striking, and this could be attributed to the current challenges of the implementation of the WRS, including high transportation and warehouse rental costs.