Managing Agricultural Systems

170 Pages·1982·4.144 MB·English

by  G. E. Dalton (auth.)

MANAGING AGRICULTURAL SYSTEMS
MANAGING
AGRICULTURAL
SYSTEMS
G. E. DALTON
Head, Agricultural Economics Division, School of Agriculture,
Aberdeen, UK
APPLIED SCIENCE PUBLISHERS
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ELSEVIER SCIENCE PUBLISHING CO., INC.,
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British Library Cataloguing in Publication Data
Dalton, G. E.
Managing agricultural systems.
I. Farm management
I. Title
630' .68 S561
ISBN-13: 978-94-009-7357-2 e-ISBN-13: 978-94-009-7355-8
DOl: 10.1007/978-94-009-7355-8
WITH 26 TABLES AND 26 ILLUSTRATIONS
© APPLIED SCIENCE PUBLISHERS LTD 1982
Softcover reprint of the hardcover 1st edition 1982
All rights reserved. No part of this publication may be reproduced, stored in a retrieval
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Applied Science Publishers Ltd, Ripple Road, Barking, Essex, England
Galliard (Printers) Ltd. Great Yarmouth
(Photoset in Malta by Interprint Limited)
Acknowledgements
I should like to thank three groups of people who have helped me
in the writing of this book.
My colleagues and friends in the Agricultural Economics
Division of the School of Agriculture, Aberdeen, and my former
colleagues in the Departments of Agriculture in Reading University
and the University of Ghana-in particular, the discussions
I have had with Peter Charlton, Bob Crabtree, Tony Giles,
John Marsh, Brian Pack, Blair Rourke and Martin Upton
ha ve been most hel pful.
My neighbours' support has been invaluable over the last six
years. They have helped to create an environment in which it has
been possible for me to learn, often the hard way, a great deal
about real agricultural systems. The advice and support of Jimmy
Adam, Bruce Jaffrey, Duncan McConnach and John Stephen is
appreciated.
My family too, even in my moments of doubt, have always had
faith in this project.
v
Preface
A large proportion of the world's population is directly involved
in agriculture, many of them as small businessmen. Each of these
businessmen applies his skill and resources day in, day out, to
produce food and raw materials. All of them to a greater or lesser
extent operate in a changing environment to which they must
adjust.
Many aspects of the environments of agricultural institutions
are influenced by the decisions of other people; in the marketplace,
in ancillary industries, in research institutes and places of learning
and in Government organisations that create and implement
agricultural policy. Improvements in the quality of decisions made
by those who manage all the various parts of the agricultural
system can have a major impact on the quality of everyone's life.
How can such improvements be achieved?
This book is based on the belief that a grasp of concepts or
principles can add a great deal to the understanding and
management of agricultural systems of all kinds. It therefore
attempts to transmit some ideas and observations about
management in agriculture. It is not about techniques nor about
the particular problems of a specific type of agriculture. Its aim is
to promote reflection, thought and discussion by professional
people whose decisions influence the performance of agricultural
VII
V11l PREFACE
systems. As such, the book attempts to convey only the -central
concepts of management in as simple a language as possible.
G. E. DALTON
Contents
Acknowledgements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . v
Preface. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Vll
Chapter 1. INTRODUCTION.. .. ............................... 1
General Management Problems..................... . . . . . . . . 1
Management Processes. . ... .... ... ......................... . 2
Outline of the Book.... . . . .................................. 3
Chapter 2. AGRICULTURAL SySTEMS.......................... 6
Describing Agricultural Systems ............... '" . .. .. .. . . . . 6
Characteristics of Agricultural Systems... . . . . . . . . . . . . . . . . . . . 10
Complexity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Coping with variety. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Constraints on system choice .......................... 13
Scale ...................................... " ... . .. . .. . . 15
Time................................................... 16
Stability. .. .. . . . .. . . ... . . .. ... .... ...................... 18
Technological change.. .. .. ..................... ........ 18
The market. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Models~A Way of Thinking About Systems............... 20
Types of model. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Features of models. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
ix
x CONTENTS
Experiments with models. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Procedures in Model Building..... ......................... 26
Validation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
The use of models. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
References. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Chapter 3. THE ENVIRONMENT.. .......... ................... 31
The Weather... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
The Economic Environment... ............................. 33
Agricultural markets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Price support. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
The wider economic environment ...................... 38
The international economy. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
The interaction between agriculture and the rest of the
economy............................................... 40
Social Environment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Conclusions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
References. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Chapter 4. PLANNING... .... .... ..................... ........ 46
A Definition of Planning. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Objectives. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Degree of satisfaction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Definition of objectives. . . . . . . . . . . .. . . . . .. . .. .. . . .. .. .. . 51
Sub-objectives. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Profit as an objective.. .... ....... ...................... 54
Time preference . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Uncertainty. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Seeking Alternatives. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
Finance ...... , ... . .. .. .. ..... .. ..... .. .................. 62
Matching capacity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
Physical form. ... . .. ... . ..... .. ......................... 63
Competition. ..... .. .... ..... .. ......................... 64
Finding the Best Solution. . . . .. .. . . . .. ... . . .. .. .. ... . . . . . .. . 67
Strategy. . ... .... .. ... .......................... ........ 67
The search process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
CONTENTS ~
Partial budgets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
Replacement. . . . . .. . . . . . . . . . . . . . . . .. . . ... .. .. ... . . . .. .. . 73
Linear programming........ .. ... ...................... 75
Simulation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
Simulation of time. . . . . . . . . . . . . .. . . . . . .. . . . .. .. . . .. . . .. . 77
Simulation of risk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
Action....................................................... 84
References ........................................... '" . ... . 85
Chapter 5. CONTROL. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
Equalisation of Deviations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
Setting standards. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
The need for feedback. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
Lags in feedback control systems. . . . . . . . . . . . . . . . . . . . . . . 93
Compensation for Disturbances... . . . . . . . . . . . . . . . . . . . . . . . . . . 94
Elimination of Disturbances. . . . .. . . . . . . . . . . . . ... .. .. .. .. .. . . 96
External changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
Internal changes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
Conclusions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 100
References. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 102
Chapter 6. RECORDING...................................... 104
The Recording of Events. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 106
The Use of Records. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 108
Profit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 109
Wealth ................................ " .. ... .. . . . . . ... 111
Comparison ............................................ 114
Index numbers ........................... '" ., . .. . . .. .. 116
Comparing incomes. . . . . . . . . . . . . . . . . . .. . . . .. .. . ... .. ... 116
Relationships. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 117
Agricultural research. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 117
Surveys. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 119
References. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 123
Chapter 7. FORECASTING.................................... 125
The Nature of Forecasts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 128
Decision Trees.. . . . . . . . . . . . . . . . .. . . . . . . . . . . .. .. .. .. . . . . .. ... 129
xii CONTENTS
Limits on Prospects. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 134
Manoeuvring for Position. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 137
References. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 138
Chapter 8. IMPLEMENTATION ................................ 139
The Analysis of Problems. . . . . . .. . . . . . . . . . . .. ... .. .. .. . .. ... 140
People ...................................................... 142
Job satisfaction ................... '" . . .. ... .. .. .. .. .. .. 142
The purpose of development ........... , .. .. .. . ... .. ... 143
Equity and Development.................................... 143
Equity and Extension Work ................................ 144
Countering Unfair Competition ...... , ...... , '" ... , ., . " . .. 145
The ownership and operation of land .... ,. . . .. . . . . .. .. 146
Education and Training..................................... 147
Task analysis ........................................... 148
Communication. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 150
The capacity of communication channels. . . . . . . . . . . . . .. 152
Overcoming Bottlenecks.. . . . . . .. . . . . . ... . . .. ... .. .. .. .. .. .. 153
Organisations. . . . . . . . . . . . . . . . . . . . . . .. . .. . . . .. .. .. .. . . .. .. ... 155
Conclusions .................................... " ........ '" 156
References ................................................. ,. 156
Index .......................................... , .. .. .. .. .. .. 158