Analysis of the profitability of the production of sugar cane and its derivatives. Case of rural producers of the parish Malacatos -Loja, Ecuador

Abstract

The present research work is focused on agricultural production in small rural producers of sugar cane and its derivatives in the rural parish Malacatos of the city of Loja. Taking as an approach the determination of the financial profitability, the production costs of sugar cane and its derivatives in order to know which is the best option to invest and under what conditions it is sustainable. The agricultural activity was evaluated through cash flows of revenues, costs and expenses in sugar cane production to meet the profitability and recovery time of the investment. The results of the applied financial indicators established that the returns are low in order to cover the costs generated by the investment. According to the study the less profitable option is the elaboration of panela and the more cost-effective is the distillation of alcohol. These, by adding the lack of support by the State for the canicultor in training and access to credit, are disadvantages to be added to the precarious conditions for marketing and the lack of creation of a system of fair prices for their production.