What does this do?
The farm level optimization calculates the combination of crops, at a selected level of practice, which will provide the highest aggregate gross margin. This is achieved by using information on cultivable farm area and the equipment capacities for each class of crop during the year. Where there are cash constraints use can be made of either reducing target technological levels to reduce total costs or by reducing the cropped areas whle maintaining a higher level of technology. This normally will result in an higher aggregate gross margin.
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Information used
The calculators use the information provided on cultvable area of the farm and the production capacities of equipment for each type of crop. The calculator also uses the input output information of the target technology (selected by the user).
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Formulae
In order to optimize (maximise aggregate gross margins) use is made of the Linear Programming SIMPLEX* method. This system reiterates many different combinations of crops subject to the farm's limitations of land area and the limitations of the capacity of equipment to support the production of different crops. The presentation of the results is in the form of an estimated aggregate gross margin for a farm plan, the total variable cost of achieving that result and the areas of the selected crops which contribute to that gross margin.
*SIMPLEX: See Agronet manual for more detailed description.
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