Abstract
A linear programming mathematical model was applied to a representative dairy farm located in Brazil. The results showed that optimization models are relevant tools to assist in the planning and management of agricultural production, as well as to assist in estimating potential gains from the use of integrated systems. Diversification was a necessary condition for economic viability. A total cost reduction potential of about 30% was revealed when a scenario of lower levels of diversification was contrasted to one of higher levels. Technical complementarities proved to be important sources of economies. The possibility of reusing nitrogen, phosphorus, and potassium present in animal waste could be increased to 167%, while water reuse could be increased up to 150%. In addition to economic gains, integrated systems bring benefits to the environment, especially with reference to the reuse of resources. The cost dilution of fixed production factors can help economies of scope to be achieved. However, this does not seem to have been the main source of these benefits. Still, the percentage of land use could increase up to 30.7% when the lowest and the highest diversification scenarios were compared. The labor coefficient could have a 4.3 percent increase. Diversification also leads to drastic transaction cost reductions.
Highlights
Technological development, especially from the mid-twentieth century on, has given priority to farm specialization, aiming to increase land, plant, and animal productivity
The results showed that optimization models are relevant tools to assist in the planning and management of agricultural production, as well as to assist in estimating potential gains from the use of integrated systems
Optimization models developed from the linear programming technique are relevant tools to assist in the planning and management of agricultural production units, as well as to assist in understanding the complexity and in estimating potential gains from the use of integrated production systems
Summary
Technological development, especially from the mid-twentieth century on, has given priority to farm specialization, aiming to increase land, plant, and animal productivity. Within this specialization, there has been a tendency to separate plant and animal production. Though specialization has allowed increased productivity, it has led to adverse environmental effects and to a greater uncertainty on the economic results of these systems. The generation of growing volumes of waste without proper destination and treatment is another consequence of this specialization process
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