Agricultural technology adoption that increases individual firm productivity is generally assumed to improve competitiveness and profitability. However, technology that is adopted by many firms in an industry can shift the basic supply relationship, increasing total production while lowering farm prices. While generally beneficial to consumers, this result can reduce (or completely offset) benefits for farmers, especially late or non-adopters. Our objective is to assess the market dynamics of alternative assumptions about exogenous productivity-enhancing technology adoption by Brazilian dairy farms. Of particular interest is the distributional impact on farm incomes and on the proportion of milk production for different farm size classes. To achieve this objective, we developed an empirical System Dynamics model that evaluates market and farm profitability impacts from 2006 to 2016. We simulated six counterfactual scenarios comprising three rates of adoption (slow, medium and fast) by two farm size categories (small and large). Technology adoption impact differs in the short- and long-term and depending on the assumed rates and farm sizes. Non-adopters of technology can experience lower incomes and a smaller production and income shares when other farms adopt. The underlying causal structure of farm profitability and the herd management decisions suffices to explain the potential market exclusion of non-adopting farms (especially small-scale farms) when others adopt.
Many problematic outcomes in agricultural and food systems have important dynamic dimensions and arise due to underlying system structure. Thus, understanding the linkages between system structure and dynamic behavior often is important for the design and implementation of interventions to achieve sustained improvements. System dynamics (SD) modeling represents system structure using stock-flow-feedback structures expressed as systems of differential equations solved by numerical integration methods. System dynamics methods also encompass a broader methodological approach that emphasizes model structural development and data inputs to replicate one of a limited number of problematic behavioral modes, anticipates dynamic complexity, and focuses on feedback processes arising from endogenous system elements. This paper highlights the process of SD modeling using 2 examples from animal agriculture at different scales. A dynamic version of the Cornell Net Carbohydrate and Protein System (CNCPS) that represents outcomes for an individual dairy cow is formulated as an SD model illustrates the benefits of the SD approach in modeling rumen fill and animal performance. At a very different scale, an SD model of the Brazilian dairy supply chain (farms, processing, and consumers) illustrates the country-level impacts of efforts to improve cow productivity and how impacts differ if productivity improvement occurs on small farms rather than large farms. The paper concludes with recommendations about how to increase awareness and training in SD methods to enhance their appropriate use in research and instruction.
Price is the main attribute considered in negotiations between companies in many agricultural commodity markets. However, there is evidence that unit price is only one factor affecting dairy farmers' satisfaction with dairy processors, which has implications for the coordination of supply chains. The understanding of price satisfaction as embodying multidimensional attributes that influence farmer satisfaction are important for the formulation of commercial strategies aimed at reducing market asymmetries. The objective of this study was to assess dairy farmers' satisfaction with the prices they receive across multiple dimensions and to determine its relationship with overall satisfaction with dairy processors within a competitive market context. A conceptual Price Satisfaction model was used, and Exploratory Factor Analysis was applied to identify the main constructs of satisfaction levels with price. Regression models were used to identify the relationship between theoretical constructs and levels of satisfaction. The results indicate that, in order of importance, milk dairy farmers' satisfaction with the price is explained by the constructs Price Transparency, Price-Quality Ratio, Price Credibility, Price Confidence and Price Fairness. Furthermore, the level of satisfaction with the price and the overall satisfaction of dairy farmers with dairy processors is independent of their technological level or scale of production. The results also suggest that a significant part of the satisfaction level of rural dairy farmers goes beyond the multidimensional aspects of price satisfaction, as is the case with milk in Brazil.
To meet the growing demand for sustainable aquaculture, the biofloc technology (BFT) system has emerged as a promising solution, offering high productivity, improved water use efficiency, and enhanced environmental and biosecurity performance. Economic and risk analyses are essential tools for identifying the key technical and economic factors that determine the profitability and long-term sustainability of aquaculture systems. This study aimed to evaluate the economic feasibility and the risk associated with Nile tilapia juvenile production in a BFT system. Economic viability indicators were calculated using real data on capital investment, operational costs, and zootechnical performance from a production cycle. Scenario analyses were conducted to assess the effects of fluctuations in input prices and survival rates on overall economic outcomes. Stochastic simulations were also conducted to determine the probabilities of economic results. The items with the greatest impact on costs were the acquisition of the greenhouse and fingerlings, representing 27.64% of the initial investment and 33.24% of the operating cost, respectively. The BFT system showed a positive net margin and profitability per production cycle, with the exception of the pessimistic scenario. The risk analysis demonstrated that in 87.29% of the simulations resulted in a positive profit. Thus, the production of tilapia juveniles in a BFT system is an economically viable investment. However, its success is contingent upon specific technical and market conditions, underscoring the need for careful management and context-specific planning.
27 October 2020 in Revista Brasileira de Zootecnia
The objective of this study is to apply Social Network Analysis (SNA) approach to improve the understanding of how to shape effective information diffusion policies among small-scale dairy farmers in rural communities of Brazil, for whom milk production is an important source of income. We interviewed 24 dairy farmers representing all participants of a dairy farmer association in a small-scale production community in the Zona da Mata of Minas Gerais, Brazil. Two sociograms were built by means of an [...] ABSTRACT The objective of this study is to apply Social Network Analysis (SNA) approach to improve the understanding of how to shape effective information diffusion policies among small-scale dairy farmers in rural communities of Brazil, for whom milk production is an important source of income. We interviewed 24 dairy farmers representing all participants of a dairy farmer association in a small-scale production community in the Zona da Mata of Minas Gerais, Brazil. Two sociograms were built by means of an
The current study explores variables associated with the loyalty of dairy farmers to dairy processors in the Brazilian context. A multivariate discrete choice (Logit) model and alternative formulations assess the associations between loyalty metrics and farm and processor characteristics for a sample of 32 dairy farmers in 16 municipalities at the Zona da Mata in Minas Gerais. Twenty-two dairy processors were identified as milk buyers in the area studied, but each farmer indicated that they could sell to an average of five alternative buyers of milk. Farmers’ attributes such as production scale or the technological level are not statistically significantly associated with loyalty in this sample. The current milk price paid to farmers in our sample is not associated with increased loyalty (sales to a single processor for 6 or more years) in all estimated models; although, further research on this impact is merited to inform buyer-pricing policy. Variables associated with increased loyalty include payment of premiums for quality, farmer years of experience and cooperation among farmers in the purchase of inputs. Delayed payment is associated with reduced loyalty. We could not determine the effect of participation in technical assistance programs offered by processors on loyalty, because in our sample all farmers received free university-provided technical assistance. The payment of a premium based on milk volume was also unassociated with loyalty determination. The small size of our sample limits the ability to generalize our results but provides exploratory results that facilitate future investigation.