Common methods used in the analysis of farming systems.

Abstract

Abstract Ever since humans moved from simple hunting and gathering, man has contemplated how to produce food and fibre. Today with most western farms having large investments, careful consideration of the 'what, how and when' decisions embodied in a farming system is necessary. Among other objectives, profitability and, when debt levels are high, survivability are important. In the less developed world, analysis is just as important to ensure the greatest output for the minimum resources. This review considers the analytical methods used by farm management professionals in developing practical farming systems. Despite their large investment, most farmers, however, still use the simplest of analytical methods questioning the usefulness of the available tools for other than professionals who provide guiding analyses. Over the last century of both economic and analytical thought, a wide range of theories and techniques have been devised to assist determining farm systems. Any analyst involved in farm management and systems analysis should be fully familiar with the range of available practical tools and theories as this familiarity enables selecting the right tool for each analysis. To help this decision, this review considers the practicality of the tools and methods commonly used. Included are farm surveys, budgeting, cost-benefit analysis, linear (LP) and dynamic (DP) programming, systems simulation and various other operations research techniques. Bench-marking and risk analysis are also important, as are production functions (and estimation methods) and data envelopment analysis (DEA). The use of expert systems as a decision support system is also mentioned.