6357: Stochastic utility-efficient programming of organic dairy farms

O., Flaten and G., Lien (2005) Stochastic utility-efficient programming of organic dairy farms. Paper presented at XIth Congress of the EAAE (European Association of Agricultural Economists), ‘The Future of Rural Europe in the Global Agri-Food System’, Copenhagen, Denmark, August 24-27, 2005; Published in AgEconSearch.

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Summary

Opportunities to make sequential decisions and adjust activities as a season progresses and more information becomes available characterise the farm management process. In this paper, we present a discrete stochastic two-stage utility efficient programming model of organic dairy farms, which includes risk aversion in the decision maker’s objective function as well as both embedded risk (stochastic programming with recourse) and non-embedded risk (stochastic programming without recourse). Historical farm accountancy data and subjective judgements were combined to assess the nature of the uncertainty that affects the possible consequences of the decisions. The programming model was used within a stochastic dominance framework to examine optimal strategies in organic dairy systems in Norway.

Document Language:	English
Keywords:	Risk analysis; Stochastic programming; Stochastic dominance; Organic farming; Dairy farming; Sequential decisions
Subject Areas:	Animal husbandry > Production systems > Dairy cattle Farming Systems > Farm economics
Research affiliation:	Norway > NILF - Norwegian Agricultural Economics Research Institute
Total budget (Euro):	0
Orgprints ID Number:	6357
Contact:	Flaten, Dr. Ola
Deposited On:	19 December 2005
EPrint Type:	Conference paper
Published?:	Published
Online at:	http://agecon.lib.umn.edu/
Peer Review Status:	Peer-reviewed and accepted

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