A Strategic Agricultural Production Model with Risk and Return Considerations

Rhonda L. Aull-Hyde and Solomon Tadesse

Agricultural and Resource Economics Review, 1994, vol. 23, issue 1, 37-46

Abstract: Decision support systems are generally geared to short-term tactical decision making. As an alternative, this paper develops a mathematical programming model to evaluate long-term strategic alternatives in the context of farm-level agricultural production where a broiler farm considers long-term implications of diversification into commercial aquaculture. The model considers a ten-year strategic planning horizon, incorporates financial risk and return considerations, and accommodates capacity variations. Results indicate that a diversification strategy significantly increases farm profitability over a strategic planning horizon while simultaneously maintaining financial risk below a predetermined tolerance level and return on investment above a predetermined level.

Date: 1994
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Journal Article: A STRATEGIC AGRICULTURAL PRODUCTION MODEL WITH RISK AND RETURN CONSIDERATIONS (1994)
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