Economic evaluation of information technology applications on dairy farms

The research described in this thesis focused on the economic evaluation of information technology (IT) applications on dairy farms in order to support investment decisions. The evaluation included a normative (deductive) approach and an empirical (positive) approach. The normative approach predicted potential benefits from a theoretical model of the investment, and investigated how farmers should deal with the applications. The empirical approach observed the actual effects of the investment (realised benefits) and investigated how farmers did deal. Applications were adopted on Dutch dairy farms and were directed towards improvement of management on an individual cow basis.The research was focused on automated concentrate feeding systems, sensors that measure daily physical activity of cows and on-line automated parlour systems for recording of milk production, milk temperature and electrical conductivity of quarter milk. Results obtained from the normative and empirical approach showed that investments in automated concentrate feeders were profitable for a typical Dutch dairy farm. A simultaneous investment in activity measurement was profitable if the level of visual oestrus detection was average. The possible dichotomy between potential and realised benefits of IT applications was examined and discussed. This was focused towards the processes of concentrate feeding, oestrus detection and mastitis detection.In general, similar results were obtained for an application that automated and improved a physical process. However, potential benefits obtained from the normative analysis were more profound than realised benefits obtained from the empirical analysis. This was particularly the case for applications that were heavily depending on time and management skills of the farmer. The methods described were general of nature and could also be used for other applications and species.</p

Farmers’ reaction upon receiving economic information in controlling somatic cell count

Adoption and implementation of efficient somatic cell count (SCC) control practices is an action of behavioral change, which is notoriously difficult to achieve and sustain, even when substantial production and economic gains are to be expected. In the current study, it was tested whether farmers are aware of these potential gains and whether providing farmers additional information on projected economic losses on a regular basis may motivate them to implement enhanced control practices. In-depth interviews revealed that the majority of the dairy farmers perceived cow-specific and herd-specific projected losses, due to elevated SCC levels, as not very relevant to them. Farmers posed that SCC was already monitored regularly at cow-level and provided them adequate information to support decision making. Actions were rationalized in a specific context comprising the intertwined notions of intentions and efficacy believes. Understanding of these notions is essential when advising farmers, being either veterinarians or others providing agricultural extension, to support farmers implementing enhanced management decisions

Risk programming analysis with imperfect information

A Monte Carlo procedure is used to demonstrate the dangers of basing (farm) risk programming on only a few states of nature and to study the impact of applying alternative risk programming methods. Two risk programming formulations are considered, namely mean-variance (E,V) programming and utility efficient (UE) programming. For the particular example of a Norwegian mixed livestock and crop farm, the programming solution is unstable with few states, although the cost of picking a sub-optimal plan declines with increases in number of states. Comparing the E,V results with the UE results shows that there were few discrepancies between the two and the differences which do occur are mainly trivial, thus both methods gave unreliable results in cases with small samples

Mainstream and alternative sources of finance in Dutch agriculture

In this paper mainstream and alternative sources of finance inDutch agriculture is analysed. Dutch farmers make use ofdifferent sources of finance whereby bank loans continue toserve as the major source of debt financing. The average bankloan was approximately 740,000 euro per farm in 2015 whileequity amounted 1.8 million euro per farm. Traditional familyloans amounted about 60,000 euro per farm. Recentdevelopments in, and examples of, alternative sources of financeindicate that the diversity will increase in the future, wherebyvarious forms of financing will be used simultaneously. This canalso be of interest for mainstream banks since their fundingcapacity is becoming more restricted as they are required toretain more capital to comply with the Basel Accords. Theprospects for crowdfunding in agriculture are promising forprojects relating to sales in niche markets. The relative lowreturn on equity in agriculture indicates that private equity orventure capital is often not a viable option

Stochastic fault tree analysis for agropark project appraisal

Agroparks offer in theory a variety of economic advantages and environmental benefits. Since agropark projects are typically capital intensive and with high societal impact, appraisal from lenders and policy makers will play a key role in the realisation of the concept. In practice, however, project appraisal is hampered by the complexity of the concept and the multitude of risks. In this paper, a methodology based on stochastic fault-tree analysis (FTA) was developed to support project managers and policy makers in making agropark investment decisions. The methodology is illustrated with an example agropark project