| Summary: | The British Columbia Apple industry, primarily located in the Southern Interior of the province, has undergone varying
levels of tree removal and replanting as growers attempt to maximize profits. This study models their behaviour by using
econometrics in a supply response model.
The economic environment of the fruit industry is described. The variables affecting acreage responses to removals and
replanting of new and traditional apple varieties are estimated using Ordinary Leased Squares in three separate
equations. Data are pooled and aggregated at the regional level. Several versions of the original model are run to test for robustness of the variables and of the original model.
The econometric models illustrated that the plantings of new varieties increases when expected profits from vintage trees
decline. However, planting and removals of traditional varieties are positively related to excepted profits from vintage trees and this does not follow apriori expectations.
More striking in the model is the regional differences and their responsiveness to removals and replanting. Regions with younger, better educated farmers replant to new varieties at a faster rate than other regions. Replant programs are shown to have a negative effect on the rate of replanting. These programs maintain basic criteria
for their eligibility to funding and seemingly decreased the acres replanted. Increasing the monetary value of the
replant grants results in the effect of increasing the acreage of traditional varieties being planted.
Policy implications are examined in a post modelling analysis. The effects of top loading subsidy effects are shown to have decreased the acreage of trees replanted over
time. These effects are shown to cause a dead weight loss to society of approximately $13 million over 20 years. === Land and Food Systems, Faculty of === Graduate
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