A dynamic model to analyse the bio-technical and socio-economic interactions in dairy farming systems on the Réunion Island

Overview & Synopsis

This paper presents a framework that permits an integrated analysis of a complex livestock system in which biophysical, technical, socio-economic and policy components intervene. The main aims were to analyse the investment decisions and management strategy in the livestock system, and to simulate its future evolution under exogenous shocks (agricultural policies, technical opportunity). A multidisciplinary approach was used, based on a dynamic linear programming model that integrates technical and socio-economic constraints, policy making, technology choice, opportunities and farmer's objectives. This approach postulates that farmers make their decisions according to knowledge of the relation between production factors, the amount of output obtained and the level of unit costs of each production activity and future market prices. A technical matrix, containing a collection of relevant technical coefficients that describe the production functions (input-output coefficients), was built on the basis of observations of local farming systems. These coefficients and the opportunities offered to each farm type to produce goods subject to constraints are expressed in linear equations and are introduced in the model types. This modelling approach was used in the case of the dairy farming system on the Réunion Island. Applied to six dairy farm types, this approach showed the correct representation of the observed behaviour by the model, and the extreme sensitiveness of most farming incomes to agricultural policies and especially to public support. These models are currently operational and may be used to accompany decision-makers, especially dairy cooperative leaders, in their considerations on the management of farms.