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Stochastic Utility-Efficient Programming of Organic Dairy Farms

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  • Flaten, Ola
  • Lien, Gudbrand D.

Abstract

Opportunities to make sequential decisions and adjust activities as a season progresses and more information becomes available characterize 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 resource) and non-embedded risk (stochastic programming without recourse). Historical farm accountancy data and subjective judgments 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.

Suggested Citation

  • Flaten, Ola & Lien, Gudbrand D., 2005. "Stochastic Utility-Efficient Programming of Organic Dairy Farms," 2005 International Congress, August 23-27, 2005, Copenhagen, Denmark 24743, European Association of Agricultural Economists.
    • Handle: RePEc:ags:eaae05:24743
    DOI: 10.22004/ag.econ.24743
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    Cited by:

    1. Tzouramani, Irene & Karanikolas, Pavlos & Alexopoulos, George, 2008. "Risk and Income Risk Management Issues for Organic Crops in Greece," 108th Seminar, February 8-9, 2008, Warsaw, Poland 48116, European Association of Agricultural Economists.
    2. Sauer, J. & Park, T. & Graversen, J., 2008. "Organic Farming in Denmark – Productivity, Technical Change and Market Exit," Proceedings “Schriften der Gesellschaft für Wirtschafts- und Sozialwissenschaften des Landbaues e.V.”, German Association of Agricultural Economists (GEWISOLA), vol. 43, March.
    3. Tzouramani, Irene & Karanikolas, Pavlos & Alexopoulos, George & Sintori, Alexandra & Liontakis, Angelos E., 2008. "Modelling Economic Alternatives For Tobacco Producers: The Case Of Sheep Farming," 107th Seminar, January 30-February 1, 2008, Sevilla, Spain 6695, European Association of Agricultural Economists.
    4. Sauer, Johannes & Graversen, Jesper T. & Park, Timothy A., 2006. "Breathtaking or Stagnating? - Productivity, Technical Change and Structural Dynamics in Danish Organic Farming," 2006 Annual meeting, July 23-26, Long Beach, CA 21481, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    5. Sauer, Johannes & Park, Tim, 2009. "Organic farming in Scandinavia -- Productivity and market exit," Ecological Economics, Elsevier, vol. 68(8-9), pages 2243-2254, June.
    6. Bhuyan, Sanjib & Postel, Michael, 2009. "Determinants of Organic Dairy Farm Profitability: Some Evidence from the Northeast United States," 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin 49934, Agricultural and Applied Economics Association.

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