Developing the Spatial Dimension of Farm Business Models
A non-linear mathematical farm business optimisation model, that is set within a spatial economic framework, has been developed. The model incorporates factors such as location, spatial market orientation and technology use, and identifies the business strategy that is optimal in different market and policy environments. Farm household time-use is incorporated centrally within the model, enabling it to examine how on-farm and off-farm activities compete for limited farm household human resources. The model is applied to a beef and sheep farm that can choose between selling livestock to meat processors or processing on-farm and selling direct to consumers. Model simulations reveal when it is optimal for the farm business to innovate in this way and how this decision is affected by changes in key parameters. The farm business model is solved using the GAMS/LINDOGlobal mathematical programming software package. While traditional nonlinear programming and mixed-integer nonlinear programming algorithms are guaranteed to converge only under certain convexity assumptions, GAMS/LINDOGlobal finds guaranteed globally optimal solutions to general nonlinear problems. The model and model results are discussed within the context of theoretical underpinnings, model tractability, and potential applications.
|Date of creation:||Apr 2011|
|Date of revision:|
|Contact details of provider:|| Web page: http://www.aes.ac.uk/|
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Greenhut,Melvin L. & Norman,George & Hung,Chao-Shun, 1987. "The Economics of Imperfect Competition," Cambridge Books, Cambridge University Press, number 9780521305525, june. pag.
- Gomez-Limon, Jose A. & Riesgo, Laura, 2004. "Irrigation water pricing: differential impacts on irrigated farms," Agricultural Economics, Blackwell, vol. 31(1), pages 47-66, July.
- Greenhut,Melvin L. & Norman,George & Hung,Chao-Shun, 1987. "The Economics of Imperfect Competition," Cambridge Books, Cambridge University Press, number 9780521315647, june. pag.
- Brennan, Donna & Williams, Jeffrey & Wright, Brian D, 1997. "Convenience Yield without the Convenience: A Spatial-Temporal Interpretation of Storage under Backwardation," Economic Journal, Royal Economic Society, vol. 107(443), pages 1009-22, July.
- Batterham, Robert L. & MacAulay, T. Gordon, 1994. "Price-Linked Farm And Spatial Equilibrium Models," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 38(02), August.
When requesting a correction, please mention this item's handle: RePEc:ags:aesc11:108782. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (AgEcon Search)
If references are entirely missing, you can add them using this form.