Abstract

The objective of the research is to determine the optimum area of wheat in Karma cooperatives for the season 2008-2009 .The results of costs structure of 139 farmers sample that variable costs formed about 84.5%of total costs which is high percentage .The fertilizers consisted about 34.39%of variable costs while fixed costs consisted about 15.5%and the family labour percentage importance was about 70.05% of fixed costs .The cubic function was used in estimaton of cost function .The results of estimation were consistent with economic logic and staistical criteria and its estimates were significant with high level through t-test and the significance of the model through F-test the high value of Ŕ²  showed the credibility of the estimated model . The econometrical criteria showed that the function passed most of tests such as D-w test for autocorrelation and park test for heteroscedasticity .As far as multicollienearity it was  absent due to nonlinearity of the model  The average cost equation was derived and from it the optimum size of production was determined which was about 52 tons .The optimum  area was about 69 donums .The results also showed that the size of actual prodution was less of optimum production therefore production should be expanded through area expansion to minimise production cost in addition to achieve good return for farmer .