A linear programming analysis of an Iraqi state farm

Abstract

In this study linear programming is used to develop gross margin maximising farm plans for an examplar state farm in Iraq. The activities of the farm included a variety of cash crops, fodder crops, poultry and livestock activities. Sensitivity analyses were also used to serve as a guide to the stability of the various plans. The effects of crop.rotations, buying in concentrate feedingstuffs, government constraints on outputs, and alternative price systems were examined. The data used were from a 1979-1983 survey of resource inventories, and represented conditions at average performance. Under the present Iraqi Agricultural policy, the results of this study indicate the importance of using crop rotation systems and of bought-in concentrate feedingstuffs. They also indicate that among all the alternatives considered, the dairy activity combined with certain fodder crops, poultry and malting barley as a cash crop is the most profitable combination. In a fully relaxed model, within Iraqi prices, poultry will dominate all the farm activities, while in a fully relaxed model with world prices, the solution is consistent with the existing farm plan. This study indicates the effectiveness of the linear programming technique in addressing the problem of farm planning. It also shows how influential the system of relative prices is upon the optimal solution. It is suggested the Iraqi authorities should establish an effective set of agricultural prices which stimulate agricultural production and satisfy a competitive equilibrium in the agricultural sector.