Price
More farmers are willing to plant durian tree as the price of durian increases..In short, supply of durian increase as the price goes up..If we look at the trend in price of durian which even reach RM80 per fruit, most farmer start to plant this type of fruit..But now after several decades the price of durians has cost as lower as RM1 per kg.. Due to this current market condition, most farmers are thinking to cutting off their durian tree.
Technology & Research
Where technology helps, if one is able to afford it, it is used. Technology provides more efficient production and supply. National policies to promote tropical fruit production include the introduction of new varieties, improvement of current cultivars, research to improve agronomic techniques and efforts to improve quality and processing standards.
Cost of Production
The amount of money spent on cost of labor, fertilizer, and pesticides will determine how large or small the production of supply is. Since cost of production changes, then supply also will change according to the fluctuations in the cost of production. As all farmer want to make profit in their business they will be highly responsive to a change in cost of production. If the government charge too much tax on their output, in the long run they will end up by exist the market. But if there government gives them subsidy which can lower their cost of production, the farmers are willing to continue plant the durian tree.
Government & Policy
Tropical fruit production in Malaysia has developed rapidly over the past decade and is supported by favorable policies at both the central and local government level. National policies to promote tropical fruit production include the introduction of new varieties, improvement of current cultivars, research to improve agronomic techniques and efforts to improve quality and processing standards. Malaysia also launched an official Program for Tropical Fruits in June 2002 to promote national and local development of its tropical fruit and processing industry.
P/S : This was a part of my presentation slides for the Microeconomic’s subject.
