Optimising an integrated crop-livestock farm using risk programming

Abstract

Numerous studies have analysed farm planning decisions focusing on producer risk preferences.
Few studies have focussed on the farm planning decisions in an integrated croplivestock
farm context. Income variability and means of managing risk continues to receive
much attention in farm planning research. Different risk programming models have
attempted to focus on minimising the income variability of farm activities. This study attempts
to identify the optimal mix of crops and the number of animals the farm needs to
keep in the presence of crop production risk for a range of risk levels. A mixed integer linear
programming model was developed to model the decision environment faced by an integrated
crop-livestock farmer. The deviation of income from the expected value was used as a measure
of risk. A case study is presented with representative data from a farm in the Swartland
area. An investigation of the results of the model under different constraints shows that, in
general, strategies that depend on crop rotation principles are preferred to strategies that
follow mono-crop production practices.

Keywords: Farm planning, risk, return, integer programming

ORiON Vol. 20 (1) 2006: pp. 29-54