THE ECONOMIC VALUE OF A NEW TECHNOLOGY IN GROWING POTATOES: THE HILLING METHOD

Guangsen Han
Shanxi Institute of Science and Technology of Farming Machinery, China
Howard Qi
Michigan Technological University, USA
ABSTRACT
Combining finance knowledge, agricultural and farm machinery, this study analyzes the
economic value of a new technology of growing potatoes–the hilling method compared to the
traditional method without hilling. The authors find that this environmentally friendly technology
has a large economic value measured in billions of Chinese yuans (CNY) for Shanxi Province in
China. Our analysis also allows us to identify the breakeven price of around CNY 79,000 which is
considerably higher than the current price. Therefore, the substantial potential profit margin is
sustainable and creates a strong incentive for the technology’s developers and business owners.
The analysis in this study helps in determine the long-term economic value of the hilling method of
potato farming. It also provides key information for policy makers as well as serves as a
framework for valuating farming technology in general.