Doctoral Dissertations

Date of Award

8-1992

Degree Type

Dissertation

Degree Name

Doctor of Philosophy

Major

Agricultural Economics

Major Professor

S. Darrell Mundy

Committee Members

Luther Keller, Bob Miller, Hans Jensen

Abstract

Satisfying multiple, simultaneous, and often conflicting goals is the crux of farm management, a process defined as "a science of choice and decision-making." Computer technology allows the evaluation of complex interrelationships and multitudes of combinations, scenarios, and iterations on which decisions might be based. Computer technology also facilitates the use of a systems approach to the farm management problem. A systems approach enables researchers to examine interrelated components which more nearly approximates the farm management problem than does the reductionist approach used in classical scientific research which evaluates isolated components.

The farmer attempts to solve the farm management problem of satisfying multiple goals by allocating a set of resources across a system of enterprises to produce goal-satisfying outputs. In a production system composed of multiple interrelated practices and inputs, the farmer must recognize that factors of production may be assembled in many different combinations to attain a specified output objective. Thus, the goal-oriented farmer needs information as to how factors substitute for each other in the production process.

Enterprise budgets provide information regarding production practices, inputs, and price information, yet they do not provide a convenient way of altering an analysis to match a farmer's specific resources. Although some state extension services offer software versions of their budgets directly to farmers, which relieves the tedium of hand calculations necessary to recalculate budgets to implement revisions, few budget generators have ventured into the field of enterprise systems, which would show the interrelationships among inputs and demonstrate technical and substitutionary relationships.

The purpose of this research was to identify and solve the production problems of a specific enterprise, burley tobacco: to develop a microcomputer spreadsheet-based enterprise planning system; and to demonstrate the optimal plant spacing for several limited resource combinations.

Two field experiments, SPACING and PRODUCTION RUN, were designed to fulfill the first objective. SPACING examined 20 combinations of row and drill spacings in burley cultivar TN 86. The SPACING-AGRONOMIC component of the research examined physical and chemical characteristics, yield, quality, and total value product. A multiple regression total physical product model was used to quantify the relationship between row and drill spacings and per plant yield. Analysis of variance procedures and means separation testing were conducted on each of the variables levels to determine the magnitude, direction, and shape of relationships between the dependent variables and the row and drill treatment variables.

The SPACING-ECONOMIC component evaluated the physical input requirements of 4 of the 20 row and drill combinations. Data collected from two extreme populations and two mid-spaced populations were used to estimate quantitative models to predict input requirements for the remaining 16 treatments. An additional experiment, PRODUCTION RUN, evaluated three different combinations of production practices and management strategies to provide data not collected in SPACING-ECONOMIC. Labor and machinery input data from PRODUCTION RUN were used to validate estimates of input required from SPACING-ECONOMIC. Multiple regression models were estimated from time-and-motion observations of 8 of the 27 production practices. These 8 practices account for 85% of the labor requirement and 50% of the total cost for this enterprise.

The physical and economic data generated by SPACING and PRODUCTION RUN provided the basis for development of the enterprise system model in the STEPS software. The STEPS model was constructed in a Lotus 1-2-3® spreadsheet. As a decision aid, STEPS incorporates information regarding the burley tobacco enterprise into an analytical system which accounts for the interactions and interdependencies of the enterprise. STEPS allows a user not only to see how a plant spacing decision influences net returns, but also to determine the combinations of resources required to produce that net return as well.

Examination of results from 130 solutions of that STEPS model indicates that the optimal plant spacing combination depends on which resource is most limiting. However, results from the SPACING experiment indicate that the optimal plant spacings for all limiting resources except land ware considerably different from what is generally used by tobacco farmers. This study suggests the potential for many burley tobacco producers to improve their net income by transplanting their tobacco at wider spacings and lower plant populations than are currently used. The STEPS software, which demonstrates how product-factor mixes and the associated costs and returns vary with changes in plant spacing, provides information useful to the decision maker planning the burley tobacco enterprise to satisfy farm management goals.

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