What does it do?
This enables the user to compare the aggregate gross margins and total costs of activities which use either own land with rented land or all rented land, at each level of chosen technology A (good), B (average) or C (poor).
The user can input any combination of own or rented land up to the limits set by equipment capacities.
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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 requires the area of land owned by the business and the area of land rented for production as well as the annual rental fee per hectare. 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 a report which states the estimated aggregate gross margin for an optimized farm plan, another gross margin estimate is provided deducting the total costs of land rental. The report also provides the total variable cost of achieving that result discriminating between total variable costs and total rental costs. The report also presents the areas of the selected crops which contribute to that gross margin.
*SIMPLEX: See Agronet manual for more detailed description.
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