Oil palm and its production difficulties.

Written by:Diomer Antonio Galán Rincón.

Bachelor's Degree.Public Accounting / MSc.Science of Higher Education.

The production of the agricultural sector is essential in any country, because it is through it that food security is guaranteed and thus the possibility of providing the population with the food necessary for their maintenance. In this sense, palm production is of great importance, due to its preference as a fundamental element of the country's culinary culture.

In this sense, production is very important for obtaining palm oil; however, the palm production process presents a difficulty mainly due to the country's economic situation, where hyperinflation hinders this process. However, there is currently an increase in sales prices, but this is accompanied by an increase in costs.

In addition to the uncontrolled inflation, the other problem facing the Venezuelan economy and affecting companies as a whole is the difficulty in acquiring foreign currency, which is necessary for the purchase of inputs and materials that are not produced in the country. In the case of the Agricultural Production Units, most of the materials and inputs used to maintain the plantations are imported, therefore, they need to have some foreign currency for their acquisition, but since these are not available through official channels, they must resort to the parallel (black) market, where the cost is higher and fluctuates constantly, due to the structural problems of the country's economy

All this affects society in general and each interest group in particular, such as companies, whether they belong to the primary, service or industrial sectors. This situation means a significant deterioration in the profitability indexes of companies, even if sales and nominal income increase as a result of inflation, cash flows grow, but performance may be affected, because in the same proportion that sales increase, so do costs in general.

Therefore, it is necessary for companies to implement systems that allow them to make better use of resources and thus minimize costs, understood according to Corcoran (1992), as "the amount of money, time, labor, which is required to obtain a benefit; price; or disbursement", therefore, it is important to know clearly what these costs are, so that management can know the true profitability margins.

This situation affects companies in general, but in particular those dedicated to the production of oil palm, which need care to avoid and treat pests such as the goat worm, tunnel worm, canker worm, ants and rats. In addition to diseases such as anthracnose, Botryodiplodia spp, leaf blight and rot diseases.

The treatment of these pests and diseases requires manual cultural practices, but also products such as fertilizers, fungicides and insecticides, which are imported, and therefore their price is constantly affected due to the economic conditions mentioned above, directly affecting their cost structure.

I hope you like my article and I would appreciate all your comments.

1.- Corcoran, W. (1992). Costs, accounting, analysis and control. Editorial Limusa. Mexico.