The Objectives and Priorities for the Azorean Dairy Farmers’ Decisions

Abstract

The single objective—profit maximization—has been the classical and neoclassic model for farmer’s decision making. Nowadays, it is recognized that other and conflictual objectives are important concerns to the process, making the multi-criteria methodologies more suitable to the agricultural reality. This chapter aims to identify and find the objectives and priorities of the Azorean dairy farmer’s decision making. The proposed methodology is based on multi-criteria models, by simulation of the dairy farmers’ behavior through data of the Farm Accountancy Data Network. This allows to define a surrogate utility function for a dairy farm typology, regarding the different grazing systems. Five main objectives were previously considered: profit maximization, risk minimization, labor seasonality minimization, leisure maximization, and also deviations to the goal of total labor minimization. The results show that in any group of Azorean dairy farms, the decision making process seems to be influenced by three conflictual objectives: profit maximization, labor seasonality, and risk minimization. Also, the farms’ objectives depend on the intensity of grazing systems and by other socioeconomic factors. That is, farmers’ behavior is not always explained by profit (exception in the low intensity grazing systems), which is unusual under the traditional paradigm. Some explanations may be appointed for this situation and one is related to the dairy farms income that can be enough to maintain the farm and family income. If the economic objectives are satisfied, then the farmers can have other priorities.

Appendix

$$ \mathrm{Objective}\ (1):\kern1em \mathrm{MAX}\ \mathrm{MB}=\mathrm{MAX}{\displaystyle \sum_{i=1}^{15}{X}_i{\mathrm{MB}}_i},\kern1em \mathrm{Objective}\ (2):\kern1em \mathrm{MIN}\ \mathrm{MOTAD}=\mathrm{MIN}{\displaystyle \sum_{k=1}^7{N}_k} $$

$$ \mathrm{Objective}\ (3):\kern1em \mathrm{MIN}\ \mathrm{EST}=\mathrm{MIN}{\displaystyle \sum_{j=1}^6{n}_j+{p}_j} $$

$$ \mathrm{Objective}\ (4):\kern1em \mathrm{MIN}\ \mathrm{MO}=\mathrm{MIN}\ {\displaystyle \sum_{i=1}^{15}{X}_i{\mathrm{MO}}_i} $$

$$ \mathrm{Objective}\ (5):\kern1em \mathrm{MIN}\ \mathrm{DMMO}=\mathrm{MIN}\ {\displaystyle \sum_{i=1}^{15}{n}_{1j}+{p}_{1j}} $$

$$ \mathrm{Constraint}\ (1):\kern1em {X}_1\le {S}_A $$

$$ \mathrm{Constraint}\ (2):\kern1em {X}_2+{X}_3+{X}_4+\frac{1}{2}{X}_8+\frac{1}{4}\left({X}_{10}+{X}_{12}\right)\le {S}_M $$

$$ \mathrm{Constraint}\ (3):\kern1em {X}_5+{X}_6+{X}_7+\frac{1}{2}{X}_9+\frac{1}{4}\left({X}_{11}+{X}_{13}\right)\le {S}_B $$

$$ \mathrm{Constraint}\ (4):\kern1em {S}_A+{S}_M+{S}_B\le {S}_T $$

$$ \mathrm{Constraint}\ (5):\kern1em {X}_8+{X}_9\le 0.2\left({S}_M+{S}_B\right) $$

$$ \mathrm{Constraint}\ (6):\kern1em {X}_{10}+{X}_{11}\le {X}_8 $$

$$ \mathrm{Constraint}\ (7):\kern1em {X}_{11}+{X}_{13}\le {X}_9 $$

$$ \mathrm{Constraint}\ (8):\kern1em {\displaystyle \sum_{i=1}^{15}\left({\mathrm{MO}}_j{X}_i\right)+{n}_j-{p}_j=\overline{{\mathrm{MO}}_{dj},}\kern0.5em j=1,\dots, 6} $$

$$ \mathrm{Constraint}\ (9):\kern1em {\displaystyle \sum_{i=1}^{15}\left({\mathrm{MO}}_j{X}_i\right)={{\mathrm{MO}}_{dj}}_{{}_j},\kern0.5em j=1,\dots, 6} $$

$$ \mathrm{Constraint}\ (10):\kern1em {\displaystyle \sum_{i=1}^{15}\left({\mathrm{MB}}_{ik}{X}_i-\overline{{\mathrm{MB}}_{ik}}\right)+{N}_k-{P}_k=0,\kern0.5em k=1,\dots, 7} $$

$$ \mathrm{Constraint}\ (11):\kern1em {\displaystyle \sum_{i=1}^{15}{\mathrm{MB}}_i{X}_i\ge 3107} $$

$$ \mathrm{Constraint}\ (12):\kern1em {\displaystyle \sum_{j=1}^6{\displaystyle \sum_{i=1}^{14}{\mathrm{UFL}}_{ij}{\mathrm{MS}}_{ij}{X}_i\ge {\displaystyle \sum_{j=1}^6{\mathrm{UFL}}_{15j}{X}_{15}}}} $$

$$ \mathrm{Constraint}\ (13):\kern1em {\displaystyle \sum_{j=1}^6{\displaystyle \sum_{i=1}^{14}{\mathrm{PDIE}}_{ij}{{\mathrm{MS}}_{ij}}_{{}_i}\ge {\displaystyle \sum_{j=1}^6{\mathrm{PDIE}}_{15j}{X}_{15}}}} $$

$$ \mathrm{Constraint}\ (14):\kern1em {\displaystyle \sum_{j=1}^6{\displaystyle \sum_{i=1}^{14}{\mathrm{PDIN}}_{ij}{\mathrm{MS}}_{ij}{X}_i\ge {\displaystyle \sum_{j=1}^6{\mathrm{PDIN}}_{15j}{X}_{15}}}} $$

$$ \mathrm{Constraint}\ (15):\kern1em {\displaystyle \sum_{j=1}^6{\displaystyle \sum_{i=1}^{14}{\mathrm{CA}}_{ij}{\mathrm{MS}}_{ij}{X}_i\ge {\displaystyle \sum_{j=1}^6{\mathrm{CA}}_{15j}{X}_{15}}}} $$

$$ \mathrm{Constraint}\ (16):\kern1em {\displaystyle \sum_{j=1}^6{\displaystyle \sum_{i=1}^{14}{P}_{ij}{\mathrm{MS}}_{ij}{X}_i\ge {\displaystyle \sum_{j=1}^6{P}_{15j}{X}_{15}}}} $$

$$ \mathrm{Constraint}\ (17):\kern1em {\displaystyle \sum_{i=1}^{14}{\mathrm{MS}}_i{X}_i\ge {\mathrm{MS}}_{15}{X}_{15}} $$

$$ \mathrm{Constraint}\ (18):\kern1em {X}_{14}-547,7{X}_{15}=0 $$

$$ \mathrm{Constraint}\ (19):\kern1em {X}_{15}-1.4{\displaystyle \sum_{i=1}^{13}{X}_i\le 0} $$

$$ \mathrm{Constraint}\ (20):\kern1em {X}_i\ge 0,\ i=1,2,\dots, 15 $$