Browsing by Subject "Dairy farm size"

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Structural change requirements in the Bulgarian dairy sector aiming at higher competitiveness within the EU
(2008) Vassilev, Zlatan; Doluschitz, Reiner
During the burdensome years of transition the agriculture in Bulgaria plays the role of a social buffer and a sector providing some, although insufficient, income and employment. Although employment in agriculture is a source of income, self consumption of its products can save income that could be spend on something else. The differences between market and self-sufficiency oriented farmers diminish due to income instability, that consequently contribute to agricultural decommercialization. A major characteristic of small-scale subsistent farming is the diversification of production activities that usually lead to diseconomy of scale effects. At the same time small-scale subsistent farms use labour intensive systems of production as a substitution for the scarcity of capital and machinery. Subsistence farming uses resources which could be used elsewhere in market-oriented farming and other sectors and its existence may cause a loss of overall production efficiency. Notwithstanding this loss of efficiency at the aggregate level, subsistence farmers may be efficient with regard to their own utility functions. Consequently, from a conventional economics point of view, small-scale farmers are unlikely to react to government policies in a normal, "rational" way. However, when they dominate the production of some products, predictions based on ?normal? economic models may be unreliable. The scope of the study is to cover the agriculture holdings with dairy cows according to the national statistic and moreover to argue that not all of them can be defined as dairy farms. The general hypothesis of this thesis states that the current typical dairy farm can double its size and increase significantly its income while reducing the risk for the household. On the contrary if it is growing more than a double that would have the opposite effect due to overestimated management capacity and unacceptable size of liabilities. The method used in this thesis is based on the concept of a typical dairy farm through bottomup approach. A typical dairy farm represents a significant number of dairy farms in a region in terms of size, forage and crops grown, livestock systems, labour organization and production technology used, and show an average management / performance ratio. The typical farm is ?built? and ?validated? based on panels (farmers, advisors? knowledge and local experts) and farm accounting statistics. The simulations in this thesis proved that with the currently existing support programs a successful farm restructuring is viable in a short period of time if the farmer possesses the necessary skills, knowledge and information to adopt a strategy to successfully face the changing market conditions. While the suggested structural changes could be successfully implemented in order to provide a significant improvement of the management, the time span available for them is very ?narrow? with respect to the financial support provided by the programs available. The general assumption of the government policy was that the ?Producer Union? (PU) should play a leading role in the process of structural reforms in agriculture. Unfortunately that assumption didn?t justify itself, consequently the provision of high qualified management services (as a major benefit from the membership in the PU) to the farmers is not utilised by them.