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A decentralized farm planning method:Planning of the annual activities on a farm with milk, beef and crop production

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  • BO ÖHLMÉR

Abstract

In this article a manual method of farm planning is introduced for the planning of farms with several production sectors which are linked by intermediate products and common use of fixed resources. A decentralized type of model has been developed in which the plans for the different sectors of production of a Swedish firm — milk production, beef production and crop production — are suboptimized on the basis of estimated internal prices for intermediate products and common fixed resources. The optimal overall farm plan is then developed by an iterative procedure of adjustment of the internal prices on basis of the shadow prices. The approach enables one to solve the planning problems of the separate sectors of the farm in a way which is better adapted to the specific planning characteristics of each production sector and in better agreement with the procedures for establishing efficient input output relations in fertilizing, feeding etc. It identifies the decisions for which the connections between the different farm sectors have to be taken into account. It can be used by farmers and farm advisers for manual farm planning as well as in computerized farm planning service systems.

Suggested Citation

  • Bo Öhlmér, 1978. "A decentralized farm planning method:Planning of the annual activities on a farm with milk, beef and crop production," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 5(2), pages 119-142.
    • Handle: RePEc:oup:erevae:v:5:y:1978:i:2:p:119-142.
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    File URL: http://hdl.handle.net/10.1093/erae/5.2.119
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