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Farm Modelling for Interactive Multidisciplinary Planning of Small Grain Production Systems in the Western Cape, South Africa

Willem Hoffman and Theo Kleynhans

No 101640, 2011 Conference (55th), February 8-11, 2011, Melbourne, Australia from Australian Agricultural and Resource Economics Society

Abstract: Subject matter research has made many contributions to small grain production in the Western Cape province of South Africa, but much of this focuses on single commodities and is undertaken within conventional disciplinary boundaries (e.g. soil science, genetics, economics). The result is that the solutions offered often have knock-on effects that are not properly accounted for by researchers. Expert group discussions, as a research method, are suitable, firstly, for gathering information in a meaningful manner and, secondly, to stimulate individual creativity by presenting alternative perspectives provided by various participating experts. In support of expert group discussions, multi-period wholefarm simulation models were developed. This type of modelling supports the accurate financial simulation of farms, while the user-friendliness and adaptability thereof can accurately accommodate typical farm interrelationships, and quickly measure the financial impact of suggested changes to parameters. Suggestions made by experts during the group discussions can thus be quickly introduced into the model. The financial implications are instantly available to prevent further exploration of nonviable plans and to fine-tune the viable plans. In this study, for each relatively homogeneous production area of the Western Cape, a typical farm budget model was developed, which served as the basis for the group discussions. The budget models measure profitability in terms of IRR (internal rate of return on capital investment) and affordability in terms of expected cash flow. The homogeneous areas identified were Koeberg/Wellington, the Middle Swartland and the Rooi Karoo, the Goue Rûens, Middle Rûens and Heidelberg Vlakte. For each area, the expected impact of climate change, fluctuating product and input prices, and the possible impact of partial conversion to bio-fuel production were evaluated in terms of expected impact on profitability. Various area-specific strategies were identified that could enhance the profitability of grain production: most of the strategies focused on optimising machinery usage and expanding or intensifying the livestock enterprise.

Keywords: Farm; Management (search for similar items in EconPapers)
Pages: 23
Date: 2011
New Economics Papers: this item is included in nep-afr and nep-agr
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aare11:101640

DOI: 10.22004/ag.econ.101640

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