ABSTRACT

POTENTIAL LIVESTOCK PRODUCTION ADJUSTMENTS
ON FAMILY FARMS IN CENTRAL MACEDONIA, GREECE
'By

Loukas Ioannis Ananikas

The dominant problem of the livestock industry in
Greece is the growing imbalance between demand for and
supply of livestock products. Livestock production has
increased during recent years but has failed to keep pace
with rapidly increasing consumption. Consequently, Greece
has been forced to turn to imports of livestock products
to meet growing consumer demands. In addition, the rela-
tive consumption among different categories of meat has
changed significantly over the past decade. There is a
trend toward increasing beef consumption primarily due to
an increase in per capita income, urbanization, and educa—
tion of the people concerning the nutritive qualities
of beef.

Various suggestions have been made for increasing
livestock production. These suggestions call for intro-
duction of new technology, for reallocation of the existing

resources on family farms, for acquisition of more land and

Loukas Ioannis Ananikas

capital, for large scale specialized operations, and
for group farming.

In response to the national goals of increasing
domestic livestock production, minimizing imports, and
improving farmers income relative to other sectors, the
main objective of this study were:

(1) To assess the capability of the small family
farms to increase livestock production through increased
efficiency in resource use.

(2) To evaluate the potential and conditions under
which livestock production on small family farms can be
expanded by acquiring additional land and capital.

(3) To evaluate the impacts of present and potential
price policies on livestock output on individual farms.

Linear programming techniques were used to determine
the organizations that would maximize farm income under
existing resources, varying land and capital resources,
and under varying milk and beef prices. The objective func-
tion to be maximized in the model was the farm gross margin.
Data concerning the resources, enterprise organization and
technology were accumulated from a survey of family farms
in Central Macedonia, using stratified random sampling.

Data related to input-output coefficients and prices had
to be assembled and synthesized from the survey personal
interviews with technical specialists, statistical bulletins,

and research publications related to the studied area. An

Loukas Ioannis Ananikas

average farm was selected for the purpose of estimating
optimum plans, which was assumed to be representative of
the small family farms in the area.

The main conclusions of the study were as follows:

(1) Allocative efficiency promises only small improve-
ments given the existing level of resources, technology and
farm prices.

(2) Land and capital were the most limiting resources.
Returns to land and capital were high in comparison with
land rent rates and the opportunity cost of capital.

(3) At the assumed low level of capital the expansion
of livestock enterprises was limited by capital, while at
the higher level of capital (unlimited credit) the expansion
of livestock enterprises was restricted by fall, spring and
summer labor.

(4) Since labor resources were not fully utilized,
it would be profitable for the farmer and family members to
work off the farm providing employment Opportunities were
available as assumed. The expansion of capital with no
expansion in land generated more livestock production and
less unemployed labor. On the other hand, expansion of
land with no expansion in capital brought about less live-
stock production and more unemployed labor.

(5) Farm enterprises were sensitive to price relation-
ships. Corn entered the optimal plan only when a milk price

of 5.6 to 6.1 Dr/kg was applied. Beef production activity

Loukas Ioannis Ananikas

entered the farm organization when the farm price of beef
exceeded 69.0 Dr/kg.

(6) The current level of feed grain subsidy was
insufficient to bring about the changes in livestock pro-
duction desired by the government.

It should be emphasized that the above conclusions
are dependent upon the assumptions made in the model.
Therefore, farmers and policy makers should not rule out

consideration of alternative plans.

POTENTIAL LIVESTOCK PRODUCTION ADJUSTMENTS

ON FAMILY FARMS IN CENTRAL MACEDONIA, GREECE

By

Loukas Ioannis Ananikas

A DISSERTATION

Submitted to
Michigan State University
in partial fulfillment of the requirements
for the degree of

DOCTOR OF PHILOSOPHY
Department of Agricultural Economics

1975

Ll

Dedicated
to my parents Ioannis and Maria Ananikas
for all the sacrifices and support they made

for my education in Greece and the United States

ii

ACKNOWLEDGEMENTS

My sincerest gratitude is given to Dr. Warren Vincent,
major professor and thesis chairman, for the creative gui-
dance, intellectual stimulation, encouragement and friendship
he gave throughout the entire period of my graduate program.
Working with Dr. Warrent Vincent has been a rewarding
experience.

Sincere appreciation and gratitude is expressed to
Dr. George Bouyoucos, Emeritus Professor at MSU, who through
the "George Bouyoucos Graduate Fellowship,” provided finan—
cial assistance during my entire graduate program. Dr.
Bouyoucos is an internationally known soil scientist and
inventor who dedicated his life to agricultural science.

It was a special privilege to know Dr. Bouyoucos and his
wife personally. Their moral support will be long remembered.

I am especially grateful to members of my guidance
and thesis committees, Drs. Larry Connor, Milton Steinmueller,
Allan Beegle, Roy Black and Byron Brown for their contribu—
tion and assistance during my graduate program.

Special appreciation is expressed to Dr. Euthymios
Papageorgiou, Dr. Anthony Adamopoulos, Dr. George Kitsopanidis,
Dr. Thrasyvoulos Raptopoulos, Dr. Vassilios Logothetis and

Dr. George Tsoumis and through them all the faculty members of

iii

the Agricultural and Forestry School of the University of
Thessaloniki, Greece, for their contribution, in several
ways, to my educational career and for awarding me the
Fellowship to undertake graduate studies at Michigan State
university.

Appreciation is also due to Dr. Harold Riley, Chairman,
and Dr. Lester Manderscheid, Associate Chairman, and through
them to all faculty members of Agricultural Economics Depart-
ment for providing financial support and encouragement
during my program.

Appreciation is also extended to Dr. Glenn Johnson for
his continual encouragement and enthusiasm. It was during
my first months at MSU that Dr. Johnson provided me the
strength I needed to remain here and pursue my degree.

My recognition is extended to Dr. Robert Deans, Dr.
Christos Kamenidis, Mr. Thomas Dickey, Mr. Susumu Hondai,
Mr. Lynn Robbins, Dr. Atta Konadu, Dr. Y. C. Lee and Mr.
Anwarul Hoque for their constructive suggestions and cooper?
ation in the preparation of my thesis. Their contribution
is fully recognized with appreciation.

I am deeply grateful to my wife, Helen, for her
inexhaustible patience, understanding, sacrifice and unre-
lenting encouragement throughout my entire graduate work,
and to my children John and Alexandra-Maria who never
stopped being amazed by the fact that their father was

everyday in school.

iv

I owe particular gratitude to my sister, Ritsa
Ananikas,for her assistance in supporting our parents during
my stay in the United States, and to my brother and sister-
in-law Christos and Kathy Farmakis for their assistance and
support in many aspects of my program.

I am also grateful to Mr. and Mrs. John Vlahakis for
making my family's stay at Michigan State University enjoyalbe
through their warm friendship and encouragement.

The author is also indebted to the National Research
Institute of Greece for sponsoring part of the data collec-
tion, to Mr. Leonidas Kazakopoulos and Mr. George Daoutopoulos
for organizing the survey, training the enumerators and
advising the data collection.

Many thanks are extended to Mrs. Sally Meck for her
patience to type the early drafts of the thesis and to Mrs.
Nita Campbell for typing the final draft.

Finally, I would like to thank my fellow graduate
students who have given me their assistance and encouragement

during my stay at Michigan State University.

TABLE OF CONTENTS

Chapter
I INTRODUCTION .

A Profile of the Economy .
Agriculture in the Economy .

Structure of the Agricultural
Sector , .

Relative Place of Livestock Industry

The Structure of the Livestock
Industry .

Problem Setting
The Objectives
Plan of Study

II THE NATIONAL AND REGIONAL SETTING OF
THE CATTLE PRODUCTION INDUSTRY:
DESCRIPTIVE ANALYSIS .

Natural Characteristics

Size and Location of Cattle Industry :

Cattle Breeds

Production Systems .
Productivity Measures and Slaugh—o
terings .

Extraction Rate

Calving Rate .

Mortality Rate . .
Average Slaughter Weight
Productivity Index .

Feed Production

III RESEARCH METHODOLOGY AND ANALYTICAL
PROCEDURES . . . . .

Sources of Data and Area Studied .
Sampling Procedures

vi

Page

13
15

18
19

45

46
49

Chapter Page

Questionnaire Design and Interviewing . 52
Construction of an Average Farm . . . . 53
Theoretical Considerations . . . . . . 54
IV THE STRUCTURE OF THE LINEAR PROGRAMMING

MODEL . . ... . . . . . . . . . . . . . . 56
Model Activities . . . . . . . . . . . 56
CrOp Production Activities . . . . . 57
Land Rent Activities . . . . . . . . 6O
Crop Selling Activities . . . . . . . 60
Feed Buying Activities . . . . . . . 61
Livestock Activities . . . 61
Labor Selling and Hiring Activities . 68
Capital Borrowing Activities . . . . 69

Resource Availability and Restrictions. 69

Land. . . . . . . . . . . . . . . . . 71

Labor . . . . . . . . . . . . . . . . 73

Capital . . . . . . . . . . . . . . . 75

Prices . . . . . . . . . . . . . . . . 76

V OPTIMUM ORGANIZATIONS FOR THE AVERAGE

FARM WITH EXISTING AND CHANGING RESOURCES 78
Assumptions and Presentation Scheme . . 80
Assumptions . . . . . . . . . . . . . 80

Explanations and Presentation Scheme. 81

Actual and Optimal Organization with
Existing Resources and Limited Credit . 82
Actual and Optimal Organizations with
Existing Resources and Unlimited Credit 86
Resource Use and MVP' s for the Optimum

Base Plan . . . . 88
Stability Limits for the Base Plan
Resources . . . . 89
Enterprises Included in the Optimal
Solution . . . . 92

Stability Limits of the Activities
Included in the Optimal Solution with

Respect to Prices and Variable Costs. . 95
Enterprises Excluded from the
Optimal Solution. . . . . . . . .‘. . . 100

vii

Chapter

Effects of Increasing Land and Capital
on the Optimum Organization . . .

Discussion on Efficiency Measures,
MVPs, and Farm Organizations Under
Various Levels of Land and Capital
Resources

Effects of Varying Milk and Beef Prices
on the Optimum Plan . . . . . . . .

VI SUMMARY, CONCLUSIONS AND POLICY
IMPLICATIONS . . .

Summary .

Conclusions . .

Interpreting the Conclusions
Policy Implications

Suggestions for Further Research

APPENDICES
BIBLIOGRAPHY .

viii

Page

102

103

106

110

110
112
114
117
121

123
153

Table
.l

1

U)

NNNNO—‘H

wawa

LIST OF TABLES

Number of Agricultural Holdings, Farm Size
and Irrigated Land .

Per Capita Meat and Milk Consumption in
Kgs Per Year ..... . . . . . . .
Meat Imports in Thousand Metric Tons
Distribution of Cattle Holdings, 1971
Cattle Numbers in the National Herd
Cattle Population in Central Macedonia .

Cattle Concentration in Central Macedonia.

Cattle Slaughterings, Extraction Rate, and
Productivity Index for Selected Years

Average Slaughter Weight in Kg/Head, 1967-
1972 . . . . . .

Contribution of Various Expenses to the
Total Costs Per Cow According to Milk
Production . . . . . . . . . . .
Cattle Breeds in Central Macedonia .

Sample Size (Selection of Communities
and Holdings)

Annual Costs and Returns Per Stremma for
CrOp Production Activities

Resource Supplies and Alternatives

Weights for Conversion into Equivalent
Man Units.

Output Prices

ix

Page

11
13
14
24
26
27

38

40

41

48

52

58
72

74
77

Page

A Comparison of Actual and Optimal Organi-
zations Under Limited and Unlimited Credit . 83

Feed Production and Utilization Under Actual
and Optimal Plans . . . . . . . . . . . . . 85

Meat and Milk Production in Kg. Carcass
Weight Per Farm with Limited and Unlimited
Credit . . . . . . 87

Resource Use and Marginal Value Products
(MVPs) for the Base Plan . . . . . . . . . . 89

Stability Limits for the Base Plan Resources
(Limited Credit) . . . . . . . . . . . . . . 91

Activities Included in the Optimal Solu-

.tion and Their Stability Limits with

Respect to Prices, or Variable Costs . . . . 93

Cost Incurred by Decreasing or Increasing
a Unit of Activity in the Optimal Solution
and Their Stability Limits . . . . . . 96

Cost of Forcing the Non-Basis Activities

into the Optimum Plan and the Stability

Limits with Respect to Prices or Variable

Costs . . . . . . . . . . . . . . . . . . 96

Efficiency Measures for the Base Plan and
Alternatives I-IV . . . . . . . . . . . . .103

Resource Marginal Value Products Under
Various Levels of Land and Capital . . . . .104

Level of Enterprises Included Under Various
Levels of Land and Capital . . . . . . . . .105

Optimum Organization with Variable Milk
Prices, and Variable Beef Prices . . . . . .108

Tableau

I Crop Production, Rent Land and Crop. Selling
Activities . . . . .
II Feed Buying Activities
III .Livestock Activities .
IV Sell, Hire Labor Activities and Capital
Borrowing Activities . . . . . .
Appendices
A-l Gross Domestic Product at Factor Cost and
Share of Agriculture .
A-2 Gross National Product (GNP) and Gross
National Income (GNI).
A-3 .Population, Labor Force, Employment and
Unemployment (Mid-Year Estimates) .
A-4 Imports c. i. f. and Exports f. o. b. Greece,
1957-1973 . .
A-5 Total Meat and Milk Production in
Thousand Metric Tons . . . . .
A—6 Total Meat and Milk Consumption in
Thousand Metric Tons . . . . .
A27 Livestock Imports c. i. f. (Trade by S.I.T.C.
Divisions) . . . . . . . . . . . . .
B-l Monthly Cattle Slaughterings in Imathia,
Pieria, Kilkis, 1973 . . . . . .
B-2 Area ('000 Hectares), Production ('000 Tons)
and Average Yield (Kg/Hectare) of: Wheat,
Barley, Corn, Greece, 1963-1972. . .
B-3 Production of Fodder Craps in Thousand
Tons, and Feeding Stuff Imports (c. i. f.)
in Million U. S. Dollars, Greece, 1963-1972
D-l Estimated Annual Budget for One Stremma
of Crap Production Enterprises .
D-2

Explanation of Abbreviations Used in the
Matrix . . . . . . . . . . . . . . .

xi

Page

59
62
66

70

. 123

124
125
126
127
128'
129

130

131

132

138

143

Appendices

Page
D-3 Estimated Gross Income and Variable Costs
for Livestock Production Activities . . . 146
D~4 Estimated Gross Income and Variable Costs
for a Cow--Cow Weighs 540 kgs and Produces
»2, 500 kgs Milk . . 151

xii

LIST OF FIGURES

Figure Page

4.1 Bull Calves and Heifers Flow Diagram . . . . 64

xiii

CHAPTER I
INTRODUCTION

. Greece is a Mediterranean country of approximately
8,950,000 people in 1972 and an average annual rate of
population growth of 0.5 percent. It occupies an estimated
area of 131,986 square kilometers (sq. km.) with a popula-
tion density of 67.8 inhabitants per sq. km.1
‘ Greece, a member of the Organization for Economic
Co-operation and Development (OECD) and an associate member
of the European Economic Community (EEC) since 1961, managed
in the relatively short time since the post World War II
period to achieve substantial general economic growth.

National economic growth usually is defined as a signifi-

cant, sustained increase in economic output per capita, or

in total, as measured in national income accounts. Often

it is accompanied by increases in population, and it always
involves sweeping changes in technology, institutions, and
structures of production and consumption.2 By certain criteria,

Greece's progress in economic growth since 1960 compares

favorably with most other developing countries.

 

1National Statistical Service of Greece, Statistical
Yearbook of Greece, 1973 (Athens, Greece, February 197477

2OECD, Food Marketing_and Economic Growth (Paris, 1970),
p. 14.

1

This chapter aims at fulfilling three functions:
(1) to offer a general view of the Greek economy, (2) to
link Agriculture and Livestock sectors to the rest of the
economy and, (3) to formulate the problem and specify the

objectives of the study.

A Profile of the Economy

 

Measured in terms of Gross Domestic Product (GDP) in
constant prices (1958) and factor cost, the average annual
growth rate of the economy was 7.0 percent from 1955 to
1965 and 7.9 percent from 1966 to 1972 (Appendix A, Table
A-l). The per capita GDP more than doubled from 1960 to 1971.
Using indexes, the per capita GDP index number for 1960 and
1971 was 82 and 177, respectively,with base year 1963 = 100.3

In terms of total Gross National Product (GNP) and
total Gross National Income (GNI) at constant prices (1958)
both more than doubled for the decade 1963 to 1972. The
per capita GNP at constant prices increased from $412
in 1960 to $976 in 1972. Respectively the per capita GNI
for the same years and prices increased from $369 to $839
(Appendix A, Table A-2).

The average annual rate of population growth for the
1961-1971 period was 0.5 percent. This rate is considered

very low and Greece, in terms of population growth, faces

 

3United Nations, Yearbook of National Accounts and
Statistics. Vol. III: International Tables, (New York, 1974).

 

 

a reverse of the world problem, with consequences on rural
and urban manpower. The 15 to 64 years age group is
decreasing in favor of under 15 and over 65 years age groups.
The labor force (economically active population)4 decreased
from 43.3 percent in 1961 to 38.6 percent in 1971, almost
the same as 20 years ago (Appendix A, Table A-3).

External migration, mainly of the children bearing age,
later age at marriage, inadequate income and day-care faci-
lities, economic and political uncertainty, are the main
reasons for the low rate of population growth. Also there
is a continuous population movement from the rural and
semi-urban areas to urban areas. From 1961 to 1971 urban
population increased from 43.3 percent to 53.2 percent
and during the same time the rural population decreased
from 43.8 to 35.1 percent. The urbanization movement has
brought important policy questions related to the demand
and supply of agricultural products, rural-urban manpower,
urban-rural income differences, consumption patterns and
tenure problems.

Unemployment rate, 3.4 for 1971, has decreased since
1960, mainly due to development of industry and to external
migration.

Total value of imports is more than three times the

total value of exports (1973). The importation rate has

 

4Economically active were considered those usually
' working and those who are looking for a job.

been increasing more rapidly than growth in exports. The
balance of payment deficit increased from 14,722 million
drachmas (mil. drs.)5 in 1961 to 43,068 in 1971 and to
84,009 in 1973. The 1973 balance of payment deficit was
almost double that of 1971, primarily due to increased
prices of imported goods and to the devaluation of the
dollar to which the Greek currency is tied (Appendix A,
Table A-4). The present trade deficit is partly compen-
sated by workers' remittances, tourism, Shipping and partly
by capital inflows. Income from abroad increased by 325
percent from 1962 to 1972, and the total receipts from
foreign tourism was 11,790 mil. drs. in 1972.6

With respect to monetary situation the international
reserves of the country have increased from 273 million
dollars in 1966 to 1,112 in 1973.7

The average increase in the consumer price index for
1970 through 1972, 3.6 percent, was among the lowest in

the world. This was a result of government policies to

 

530 drachmas (drs.) = l U.S. dollar.

6Ministry of Planning and Governmental Policy, ”Pro-
visional National Accounts of Greece, Year 1972," (Athens,
Greece, March, 1973).

7Analytically include.

Gold 148 mil. dol.
Reserve Position in IME 42 mil. dol.
Foreign Exchange 892 mil. dol.
Special Drawing Rights 30 mil. dol.

 

1112 mil} dol.
Source: United Nations: Monthly Bulletin of Statistics,
V01. XXVIII, No. 3, (March 1974). ‘

keep down inflation at the expense of the producers, e.g.

by maintaining low cereal, milk, meat, and other agricul-
tural product prices. The situation changed rapidly during
1973, when the consumer price index increased by 30 percent,
among the highest in the world.8 This was the result of
increasing demands far greater than growth in supplies,

the dollar devaluation, and the energy crisis.

Agriculture in the Economy

 

At the present level of economic development, though
industry and services have expanded, agriculture remains a
large sector within the total economy; but the rapid growth
of the industry and services during the last decade was not
following by the agricultural sector. The average annual
growth rate of Gross Agricultural Product (GAP) at constant
1958 prices for the periods 1955-65 and 1966—72 was 3.5 and
1.9 percent, respectively. For the same periods and prices
the GDP rates for all other sectors were 8.7 and 9.4 percent.
Due to the lower growth rate of agriculture as compared to
industry and services, its constribution to the GDP decreased
from 34.4 percent in 1955 to 15.8 percent in 1972 (Appendix
A, Table A-l).

Agricultural labor force was increasing in absolute

numbers until 1961. Due to the development of the industry

 

8Facts on File: World News Digest, Published Weekly,
Vol. 34, No. 1742 (March 30, 1974). p. 159 and‘254.

and services, also to external migration, particularly of
young farmers, the agricultural active population started
declining for the first time in 1962.(Appendix A, Table A-3).
The decreased active agricultural population and the
increased agricultural production indicate a productivity
improvement per active unit in agriculture, and also a
better per capita income. Indeed the GAP per active person
at constant prices was twice in 1971 than in 1961.

The average labor productivity for the whole economy
in terms of GDP per active person has improved since 1961,
but in the nonagricultural sectors in 1971 was still three
times as high as in agriculture. According to OECD con-
clusions "the transfer of agricultural workers to other
sectors of activity remains a powerful means of increasing

9 The exodus

10

average productivity in the Greek economy."
of the farm people will influence the structure of the
Greek agriculture correcting some of the weaknesses. With
further industry development, more labor from rural areas
will be absorbed and, the remaining farmers will benefit
in terms of increased farm size, consolidation of the

already fragmented farms, the employment of more capital

intensive methods with better planning, and changes to new

 

9OECD, "Capital and Finance in Agriculture,” Agricul-
tural Policy Reports, Vol. II, (Paris, 1970), p. 4.

10Structure in this context includes farm size, tenure
system, and land consolidation.

 

crops and/or more livestock production. The overall result

‘will be increased agricultural production.11

12 constituted 21.7 and 23.8 per-

Agricultural exports
cent of total exports for the years 1970 and 1971, respec-
tively. Almost 94 percent of agricultural exports consisted
of fruits and vegetables. Agricultural products accounted
for 7.8 and 8.4 percent of total imports for 1970 and 1971,
respectively. The bulk of agricultural imports is live-
stock and livestock feed (87 percent for 1970 and 77
percent for 1971). This is one of the reasons why the
national agricultural policy is oriented towards increasing
livestock production. In general crop production (includ-
ing fruits and vegetables) continues to predominate in
exports. Livestock imports have risen as a result of the

demand for livestock products as a consequence of rising

income associated with the economic growth.

Structure of the Agricultural Sector
Three structural characteristics of the Greek agricul-
ture are responsible for the growth of agriculture in
general and livestock industry in particular. These charac-
teristics are: the farm size, the degree of fragmentation,

and tenure arrangements.

 

11There is a possibility that an increase in the pro-
portion of elderly and part-time farmers, may slow down the
rate of increase in productivity.

12Included here are: (a) live animals and animal pro-
ducts; (b) food-stuff (cereals-fruits-vegetables) and (c)
feed-stuff. '

8

The average farm size is 34.59 stremmas (str)l3 (1971)
and although many farm people are moving to urban areas,
the size of farms has not changed noticeably since 1961
(Table 1.1).

Table 1.1. Number of Agricultural Holdings, Farm
Size and Irrigated Land

 

 

 

1961 1971
Number of Holdings 1,140,1631 1,036,600I
Total Area ('000 Str) 36,733 35,863
Average Size (Str) 32.21 34.59
Irrigated Land ('000 Str) 4,890 7,337

 

 

 

lExcluding 16,009 for 1961 and 10,660 for 1971
holdings with animals only.

Source: National Statistical Service of Greece,
Statistical Yearbook of Greece (Athens,
I973).

 

Given the small farm size, the policy has been an
attempt to increase overall productivity by encouraging new
enterprises or enterprise combinations, and increase use of
capital for new technology and farm mechanization. This
policy appears to have been effective at least for crop

k14

production. Shaw's wor indicates that "small size units

 

13

14Lawrence H. Shaw, "Postwar Growth in Greek Agricul-
tural Production." Center of Planning and Economic Research,
Special Studies Series No. 2, (Athens, 1969), p. 374. In
his work the size variable in terms of crop and livestock
was included in regression analysis of factors responsible
for regional and product differences in productivity in
1962 in Greece. The obtained coefficients were highly
significant.

One stremma (str) = 0.24709 acres.

in Greek agriculture have not served as a deterrent for
growth in production." The small farms are also fragmen-
tated with an average of 7 plots per farm. The majority
of the farms are owner-operated family farms and the
prevailing characteristic is mixed farming. Large farm
ownership is practically nonexistent and only a few
specialized livestock and crop farms exist. Twenty per-
cent of agricultural land was irrigated in 1971; about 1
percent of total arable land is currently being added each
year toward a maximum irrigation potential of about one-
third of arable land. With this expansion, more high-
income crops and livestock enterprises will be possible.
During the last decade, crop production (including
fruits and vegetables) showed a certain improvement in the
direction of exportable and import-substitution products.
Main exportable products include fruits, vegetables, cotton,

tobacco, olive oil, and olives.

Relative Place of Livestock Indust§y_

Gross agricultural output is defined as the sum of
crop production (including trees and vegetables) and live-
stock production. Crop production during the last decade
showed an increase in the direction of exportable and
import-substitution products.

In spite of the fact that livestock production
accbunts for only about one-fourth of gross agricultural

production (as compared to one-half for the United States)

10

it has made an increasing contribution to agricultural
output.

The material in this section describes the general
pattern of changes in the livestock-meat sector in terms
of production, consumption and imports. Such material
can help provide a basis for defining the problem and
specifying the subsequent analysis for dealing with the
problems.

Total meat production increased from 190 thousand
metric tons in 1962 to 387 thousand metric tons in 1972,
e.g. by 103.6 percent. Poultry production has increased
by 283 percent from 1962 to 1972, followed by beef-veal
at 176 percent. Pork production has also been of consid-
erable importance particularly during the last years
accounting for 52.5 percent increase from 1962 to 1972.
Sheep and goat production importance has been declining in
relation to other kinds. The change was an increase of
43 percent over the period 1962 to 1972. Milk production
has increased by 35.5 percent over the same period
(Appendix A, Table A-5).

The dominant problem in the livestock industry is the
growing imbalance between demand for and production of
livestock products. Total meat consumption has more than
doubled since 1962 to a total of 481 thousand tons in 1972
(Appendix A, Table A-6). The relative consumption of
different categories of meat has changed significantly
over the past decade 1962-1972 (Table 1-2). There is a

11

Table 1-2. Per Capita Meat and Milk Consumption in Kgs Per
Year

 

 

 

 

 

 

 

 

 

 

 

 

Year Beef Veal Beef Pork Mutton Poultry Meat Milk1

and Lamb Total

Veal Goat
1962 6.5 2.5 4.0 4.9 9.9 3.0 26.0 44.9
1963 8.8 3.2 5.7 4.7 10.5 3.5 29.5 46.1
1964 8.8 3.9 4.9 4.7 11.4 3.8 30.7 49.4
1965 10.9 4.8 6.1 5.7 13.0 4.4 36.3 55.4
1966 12.1 6.3 5.8 5.9 13.5 5.5 39.4 60.7
1967 13.0 6.8 6.7 5.4 13.7 6.7 41.1 65 7
1968 14.8 7.9 6.9 5.0 13.4 6.1 41.6 65.7
1969 16.1 8.1 8.0 5.2 14.2 7.3 45.4 66.1
1970 18.0 8.3 9.7 5.9 14.9 8.4 49.8 66.5
1971 16.3 8.5 7.8 6.1 17.5 9.2 51.6 67.2
1972 16.9 9.6 7.3 6.9 17.1 10.2 54.0 66.9
1

Whole milk for liquid consumption or processing into cream
and other fresh products.

Sources: OECD, "Meat Balances in OECD Member Countries,"
(Paris, January 1974).

OECD, "Milk and Milk Products Balances in OECD
Member Countries,” (Paris, July 1974).

National Statistical Service of Greece, "Statis-

tical Yearbook of Greece," (Athens, February 1974).
trend toward increased beef and veal consumption primarily
due to an increase in per capita income (per capita income
in current prices has risen from 454 dollars in 1962 to
1,224 in 1972), changes in relative prices and education
of the people concerning the nutritive qualities of beef.
Per capita beef and veal consumption increased from 6.5
kilograms in 1962 to 16.9 kilograms in 1972. Per capita
lamb-mutton and goat meat consumption also increased but

at a slower rate than beef consumption (from 9.9 kilograms

12

in 1962 to 17.1 in 1972). The overall per capita meat
consumption (beef, lamb, etc.) has reached 54.0 kilograms
in 1972 (26.0 kilograms for 1962). Milk consumption has
also increased from 44.9 kgs. per capita in 1962 to 66.9
kgs. in 1972.

Consequently, Greece has been forced to turn to
imports of livestock products to meet growing consumer
demands. Total meat imports have increased from 30 thou—
sand tons in 1962 to 114 thousand tons in 1971. Under
current world market conditions, there is national concern
about dependence on foreign supplies for livestock products.
During 1970-71, imports of meat, dairy products, and live
animals amounted annually to nearly $130 million. By
meat categories, poultry imports have been declining, beef
and veal have increased by 50 percent since 1965, pig
meat imports reached zero for the last three years, mutton,
lamb, and goat meat imports have increased by 40 percent
since 1965, and dairy product imports have more than
doubled since 1965 (Table 1-3).

In 1972, 18.2 million dollars were paid to import
live animals, mainly cattle. The main countries exporting
to Greece are: Yugoslavia for live animals, E.E.C. and
South America for meat, and E.E.C. for the bulk of dairy
products (Appendix A, Table A-7).

One of the main objectives of the government's policy

in relation to the livestock-meat sector is to stimulate

13

Table 1-3. Meat Imports in Thousand Metric Tons

 

 

 

Year Beef Pork Mutton Poultry Total
and Lamb Meat
Veal Goat
1962 17 1 10 2 30
1963 28 1 15 6 50
1964 22 1 20 6 49
1965 31 2 32 ll 76
1966 31 - 34 11 76
1967 37 l 35 12 85
1968 45 4 33 8 90
1969 55 l 36 6 98
1970 68 - 40 3 111
1971 51 - 6O 3 114
1972 45 - 46 3 94

 

 

 

 

 

 

Sources: OECD "Meat Balances in OECD Member Countries,"
(Paris, January 1974).

production in order to minimize imports which have increased

considerably the last five years. The FAO/IBRD Livestock

Identification Mission15

to Greece in May 1971 concluded
that "even with maximum development, continuing imports of
beef and sheep meat will be required, whereas poultry, pork,
and dairy production could meet market requirements." This

is so far true except that maximum development has not yet

taken place.

The Structure of the Livestock Industry
The livestock enterprises may be considered supple-

mentary enterprises to the extent that they contribute to

 

15FAO/IBRD Cooperative Programme, "Greece: Livestock
and Dryland Agriculture Identification Mission" (May 13,
1971), p. 5.

14

farm income without curtailing other productive activities
and complementary enterprises to the extent that they
utilize the by-products coming from the production or some
of the crops. There are only a few specialized meat and
dairy product farms. The increased production has come
primarily from mixed family farms. Of the 243,300 holdings
with cattle, only 240 holdings during 1971 reported more
than 50 head of cattle. Almost 79 percent of the holdings

are in the category of between 1 and 4 cattle (Table 1-4).

Table 1-4. Distribution of Cattle Holdings 19711

 

 

 

 

Number of Cattle perHoldings2
Tbtal 1-4 5-9 10-19 20-29 30-49 50 & Over
Nuflxn'of
HOldings 243,300 192,720 39,400 9,100 1,220 620 240
NUflxm'of
Cattle 836,280 413,500 244,920 113,240 22,000 28,120 14,500

 

 

 

 

 

 

 

 

1A Sample of a 5 percent of total farms.

2Include dairy, beef cattle and.the dual purpose cattle.

Source: National Statistical Service of Greece, "Statistical YearbOOk
of Greece," (Athens, 1973) .

The existing livestock breeds may be classified in
three general categories: (a) domestic breeds; (b) improved
domestic breeds; and (c) foreign (exotic) breeds. The
policy has been to move from the domestic breeds of low
productivity to improved domestic and foreign breeds. From

1961 to 1971 the unimproved domestic cattle decreased by an

15

average of 11.7 percent.’ The improved and foreign breeds
increased by 10.6 and 7.1 percent, respectivelyul6i Nearly all
of the cattle industry is dual-purpose in nature (milk and
beef), and milk is still the main product of the small farm.
Production decisions are primarily taken in relation to the
mdlk market. Only on a few farms is beef production the
major enterprise. These types of farms buy calves to
fatten rather than produce their own.

4 According to the Agricultural Bank of Greece, the
government in an attempt to increase production provided
2.23 million dollars in 1971 for large-scale operation
subsidies. This amount was increased to 3.6 million dollars
in 1972. The results of direct subsidies to these operators
are only partially known. It is known that pork production
increased in 1973 due to the large specialized operations.
Little is known about the results of direct subsidies to
specialized producers in veal-beef production because beef
production takes such a larger period of time from initiation

to marketing than is the case for hogs.

Problem Setting

 

As discussed in previous sections livestock production
has increased during recent years but has failed to keep
pace with rapidly increasing consumption. A substantial

increase in meat production was achieved by further fattening

 

16National Statistical Service of Greece, pp. cit.

l6

calves, by taking at least one calf from a heifer before
slaughter, by decreased mortality rates, increased calving
rates, better breeding practices, disease control, improved
breeds, and better nutrition and housing. Part of the pro-
duction increase has been achieved by the reduction of the
breeding herd.

At the farm level low prices of livestock products,
price uncertainty, instability in terms of future govern-
ment programs, management problems, profitability of crop
enterprises and, import-export policies complicate decision
making and planning processes for livestock producers.Under
these conditions they hesitate to expand and/or adjust
their operations despite the increasing demand. Other
important factors retarding livestock adjustments are:
the small and fragmented farm size in terms of land area,
the focus of government programs during the 1960's which
has favored crop expansion rather than livestock and, the
lack of livestock feed and feeder calves during recent years.

The overall consequence of the above mentioned factors
has been the unwillingness of farmers to undertake livestock
enterprises, continuing low productivity in the livestock
industry, and finally insufficient supplies of meat and
dairy products to meet the growing consumption at given
prices.

The gap between domestic supply and demand is covered
by imports of live animals, meat (fresh and frozen) and

dairy products. The year by year increasing loss of

17

foreign exchange due to insufficient domestic supplies led
the government recently to change its general policy
emphasis from crops to livestock production. In view of
the goals of achieving self-sufficiency and simultaneously
reducing livestock imports and, improving livestock pro-
ducer's income, the last two five-year economic development
plans (1968-1973 and 1973-1978)17 provide the necessary
preconditions to accelerate the development of the livestock
industry. This will be achieved through higher prices to
the producers, credit availability, farm improvements,
breeding improvements, technical assistance, duty-free
imports of breeding animals and feed price concessions.
From the demand side increased income per capita,
urbanization, and better education allowed the standard of
living of the average consumer to be improved as reflected
in the increase in the per capita consumption of meat and
dairy products. The food requirements of the Greek con-
sumer have altered in recent years as diets have improved,
e.g. from.cereals to meat and dairy products. In this sit-
uation, the agricultural sector is under pressure to
adjust its structure to the new conditions by making

changes in farm organization and farm practices.

 

17Ministry of Coordination, "Economic Development Plan
for Greece, 1968-1972." (Athens, February 1968), p. 61.; and
James Frink, "Greece Unveils 5-Year Plan to Revitalize
Past Farm Goals," Foreign Agriculture (U.S.D.A., October,
22, 1.973): Pp. 6'8.

18

From the farmer's point of view the livestock pro-
duction adjustments problem is one of maintaining and/or
increasing income while better utilizing the family labor.
From the government's point of view the adjustments will
result in an increase in meat and dairy supplies, a reduc-
tion in the use of foreign exchange for.livestock products,
so improving the balance of payment situation and an overall
increase of agricultural sector income. Hence, the per
capita income gap between agriculture and nonagriculture
sectors would be narrowed. The total adjustments and
expansion over the country will affect the demand for land
and capital, the number of farms and farmers and, the
average size of operation. Also the reorganization will
call for transferring part of the resources from crop to
livestock production as well as possible reallocation of
resources from one region to another.

The study will not attempt to examine the efficacy of
or the social cost associated with increased livestock pro-
duction through large scale specialized Operations. The

consideration will be centered on the small family farms.18

The Objectives
In response to the national goals of increasing domes-

tic livestock production, minimizing imports, and improving

 

18Small in terms of cropland size and number of live-
stock units; family farms in terms of labor which is provided
only from the operator and his family.

l9

farmers income relative to other sectors, the specific
objectives of the study are:

(1) To assess the capability of the small family
farms to increase livestock production through increased
efficiency in resource use.

(2) To evaluate the potential and conditions under
which livestock production on small family farms can be
expanded by acquiring additional land and capital.

(3) To evaluate the impacts of present and potential
price policies on livestock output on individual farms.

The study will be restricted to the examination of
the potential adjustments on the average farm. This will
be accomplished by reallocating the existing resources and
by adding more resources to the limited land and capital.

No attempt will be made to empirically discover the potential
contribution of introducing new technology. The analysis
Swill be concentrated on crop and cattle enterprises and

will not consider poultry, swine, sheep and goat enterprises.
It will also focus on the individual farm adjustment and
will not emphasize the interregional or international

aspects of the problem.

Plan of Study
In Chapter II, the national and regional setting of
the cattle production industry in Greece will be more
fully developed with a discussion of the relevant policy

issues. Chapter III will describe the research methodology

'l '1 ‘lllv Ill III I

20

and analytical procedures used, from data collection to
final analysis. It will include the description of a
linear programming model with parametric objective function
which will be used in the analysis. The Linear Programming
model is presented in Chapter IV. This chapter discusses
the model activities, coefficients and resource restrictions
used in the study area (Central Macedonia). Chapter V is
devoted to Linear Programming optimal solutions where
present average conditions are compared with several poten-
tial changes. Chapter VI provides an interpretation of

the results, some policy implicatons of the study and

suggests areas for future research.

lil.l[lil'l'l‘[l

CHAPTER II

THE NATIONAL AND REGIONAL SETTING
OF THE CATTLE PRODUCTION INDUSTRY:
DESCRIPTIVE ANALYSIS

Recent changes in the Greek agricultural economy in
terms of technology, consumption patterns, inputs avail-
ability, the institutional setting, prices and other
economic forces have shifted concern among farmers and
extension personnel from crops to livestock production.
The Greek Government through the Ministry of Agriculture
and the Agricultural Bank of Greece has been instrumental
in influencing this concern. The position has been taken
that adjustments in resource use are possible which will
make for more efficient farm operations. Before moving
into the adjustment problems, knowledge on the organization
of production at the national and regional level will be
provided. The general objectives of this chapter are:

(1) to provide some degree of familiarity to the readers
who are not familiar with the Greek livestock industry,
and (2) to provide the basis and linkages for constructing
the model. Also the structure of the industry is prere-

quisite knowledge for policy makers.

21

[‘{{[({l

22

Natural Characteristics

 

In general, the Greek climate is of the Mediterrenean
type, with hot, dry summers and mild winters. Rainfall
averages only around 16 to 25 inches a year although con-
siderably more falls on the west coast and mountains. In
Thessaloniki (subregion of the study area) rainfall averages
from .7 inches in July and August to 2.5 inches in October
and November with an annual average total of 17.9 inches.
Temperature ranges from 49°F in January to 90°F in July
and August with an annual average of 19 frost days.1 Most
of the mainland consists of mountainous or hilly-semimoun-
tainous areas with two important plains for future develop—
ment of Macedonia and Thessaly.

In the study area of the 14,319 thousand stremmas,
31.7 percent is cultivated area, 14.1 percent communal
pasture and 14.8 percent, private pasture.2 Each community
member has the right to graze the common pasture with a year
average grazing fee of 60 Dr. per animal unit. Most of the
area is considered as natural pasture with a limited number
of facilities. Domestic cattle breeds mainly use the
communal pasture which is supplemented by fallow land and

crop residues after harvesting.

 

lData compiled from reports of "Statistical Yearbook
of Greece," and ”An Outline of the Climate of Greece,” by
E. G. Mariolopoulos (Athens).

2National Statistical Service of Greece, ”Agricultural
Statistics of Greece, 1961," (Athens, Greece).~

23

Size and Location of Cattle Industry

 

Due to the lack of reliable statistical data to allow
a distinction between dairy, beef and dual purpose cattle,
it has been necessary to examine the changes and trends
for all together.

From 1935 to 1972 three times (1935, 1956 and 1971)
cattle population numbers remain almost the same (Table 2.1).
The shocks of the industry due to World War II and Civil
War and the continued change from domestic (indigenous)
to improved and foreign breeds may partly explain the
delayed development. If 1947 is considered as base year
for comparison, the cattle population increased from 693
thousand to 1,069 thousand in 1961 and remained almost
stable or slightly decreased thereafter. The average rate
of change has been a 2.34 percent increase from 1955 to
1960, a 0.51 percent decrease from 1960 to 1965 and a 0.21
percent decrease from 1965 to 1972 (Table 2.1).

No attempt was made to explain the above changes as
cyclical fluctuations. Papaioannou3 using simultaneous
equations to explain the cyclical fluctuations of cattle in
Greece, found that "the cycle moves in a regular oscillatory

but, nonetheless, damped pattern, with an eight year duration.‘

 

3M. C.Papaioannou, ”Quantitative Analysis and Agricul-
tural Policy with Special Reference to Animal Breeding in
Greece," Options Mediterraneennes, No. 8 (August, 1971),
p. 70.

 

24

Table 2.1. Cattle Numbers in the National Herd ('000 Head)

 

 

 

 

 

 

 

 

Year Total Domestic Improved1 Foreign2 Milked
Cows
1935 975 --- --- --- ---
1947 693 --- --- --- ---
1956 981 --- --- --- 1--
1961 1,069 767 261 40 383
1962 1,060 705 309 46 394
1963 1,034 646 339 49 407
1964 1,017 561 406 50 402
1965 1,046 499 489 58 416
1966 1,082 439 573 70 437
1967 1,094 394 624 76 452
1968 1,038 328 641 69 453
1969 1,097 290 639 68 445
1970 952 251 629 72 438
1971 989 223 672 91 ---
1972 1,056 --- —-- --- ---

 

1Cross breedings with domestic cattle and dairy-beef

cross-breedings.

2Exotic or pure breeds mainly for milk production.

Source: Statistical Yearbooks of Greece, pp. cit.

 

A simple price quantity cobweb-theorem will not offer any
complete explanation of the cyclical movements. This is

due to the "exogenous variables. . .of the system which must
be regarded as the determina factor on both quantities and

"4

prices. Even with the existence of an eight-year

 

4Ibid.

25

cycle, we do not know its causes well enough to design
viable policy mechanisms. This is one of the main reasons
for continuously changing policies and control devices

in the livestock industry.

Part of the beef and veal production increase during
recent years has been achieved by the reduction of the
breeding herd. This leads to the conclusion that one of
the goals of the 5-year plan (1973-1978) to increase all
types of meat production to 555,000 tons, or 70 percent more
than in 1971, without decreasing the stocks, will not be
realized.

Most cattle are maintained in the level zones (plain
areas) and the numbers have increased since 1961. Of
1,069 thousand cattle in 1961, 56 percent were concentrated
in level areas, 23 percent in semimountainous and 21 percent
in mountainous areas. The coresponding numbers for 1970
are 64, 20 and 16 percent, respectively for level, semi-

5 This means that no

mountainous and mountainous areas.
emphasis has been given to the expansion of beef and dual
purpose breeds to pasture areas, and the continuous increase
of the cattle population in the level areas will require an
increase in the production of feed-grains and forages.

While the national herd decreased by 4,000 cattle in

1972 as compared to 1962, cattle population in the study

 

5Statistical Yearbook of Greece, 1962, 1972, 22- gig.

6
2

:.oooouo mo

.moowwwo HMHDquoHHw< Hmooq uoHdquowHw< mo mhumwcflz Amv

.Aooooso .osoroao asoa eds .oooa .mooa .mooa .oooa ores»

mowumfiumum Hmuduaaowuw<z .oooouu mo ouw>nom Hmowumaumuw HmGOMOMZ AHV "mooupom

 

 

oa.m~ o.m~ os.- Hr.a~ Nr.HN ~o.o~ so.oa doooso
HMUOH. W0 UGGUHGW
ooo.omo.a ooo.oro ooo.~mo ooo.soo.a ooo.rmo.a ooo.soo.a ooo.ooo.a ooooso Hoooa
roa.mo~ meo.oNN soo.sam ram.a- boo.o- rso.m- mos.aa~ Hsooe
osm.ms om~.os oHo.mo soo.oo oeo.mo mam.mo. onr.om sassoaooodre .o
marnma mmo.aa smm.ea omonma orn.ma mmmuma ama.ra museum .m
Hoa.ao smouom sum.oo soo.ao sr~.oo one so oNo.om seeds .s
mom so mac no Noe.~o mos no ~om.mo sos.ro mmo.oo morass .m
mosuam .mmonam Naonra sarnmm oronem oasumm momHmN serodaH .N
moo ma nee Ha moo OH one oH Nae OH son He Nae NH areoexaoru .H
Nada Hkoa oaoa oooa rose some area osoawososm

 

 

 

 

 

 

 

 

 

«amorous: Hmuuaou ca nowumasdom oauumo

.N.N manna

27

area increased by more than 34,000 cattle indicating a

trend and willingness by the farmers in this area to produce
more cattle (Table 2.2). Chalkidiki subregion has the»
lowest concentration (number of cattle per 100 stremmas
cultivated land) followed by Pieria, Kilkis, Imathia,
Thessaloniki, and Pella with the highest (Table 2.3). The
average concentration of 3.79 for the region is higher than
the average for the whole country (2.45). The average
carrying capacity for both private and communal pasture is

approximately .51 cattle per 10 stremmas.6

Table 2.3. Cattle Concentration in Central Macedonia, 1969

 

 

 

subregion Cattle Cultivated Concentration
Number Area
(Th. Str.)

Chalkidiki 10,776 940 1.14
Pieria 12,036 558 2.15
Kilkis . 43,105 1,132 3.80
Imathia 28,827 715 4.03
Thessaloniki 64,667 - 1,545 4.18
Pella 61,907 939 6.59

Total 221,318 5,829 3.79

 

 

 

 

Source: Agricultural Statistics of Greece, 1969, pp. cit.

610 Stremmas = 1 hectare.

28

Few specialized dairy or beef operations exist. The
average size of cattle enterprises in 1961 was 2.9 cattle,
increased to 3.4 in 1971. Almost 79 percent of holdings
belong in the category of 1-4 cattle in 1971 as compared

with 85 percent during 1961.7

Cattle‘Breeds8

 

About 72 percent of all Greek cattle in 1961 belonged
to the two indigenous breeds of Greek Shorthorn and Greek
Steppe cattle, while 24 percent belong to the various cross-
breeds (domestic improved) and 4 percent were foreign
(pure) breeds. The situation had changed by 1971, with 23
percent indigenous breeds, 68 percent crossbreeds, and 9
percent foreign breeds. Improvements have been stimulated
through artificial insemination campaigns by experienced
technicians.

The Greek Shorthorn is found mostly in South Greece
while the Greek Steppe is to be found in Macedonia, Thrace
and the eastern area of Thessaly. Due to the long time for
adaptation, both are in harmony with a wide range of soil
conditions, topography and altitudes. Both are small in

size with an average liveweight for the Shorthorn of 180-200

 

7Agricultural Statistics of GreeceL7196l, pp. cit.;
and Statistical Yearbook ofCGreece, 1972, pp. cit.

8This part draws from the study of FAO, "European
Breeds of Cattle," FAO, Vol. II, (Rome, 1966).

29

kg. and for the Steppe of 285-300 kg. Milk production range
is SOC-1,200 kg. depending upon feed provided, grazing situ-

ation and housing facilities.9

For meat production purposes
both breeds are not efficient because of their poor muscular
development.

Because of the low productivity of the indigenous

10 from Switzerland, Germany and United

breeds, Brown Swiss
States, Friesians from the United States and Denmark,
Simentals from Yugoslavia, Angelin, Hereford, Holstein,
Jerseys and Aberdeen Angus from United States and Europe,
have been imported for grading up the indigenous stock and
for pure breeding purposes. Brown Swiss has been used the
greatest extent, due to its dual-purpose characteristics.
It exhibits a good rate of gain, e.g., 1.05 kg. a day
average for bulls and .85 kg. for heifers. Meat is of good
quality with comparatively little fat. Friesians have been
used successfully for dairy operations. The results for
the beef breeds "have not been really satifactory owing

to the lack of opportunities to express their hereditary

characters economically because of dietary restrictions."11

 

91f the animals are kept in barns with good quality
feed, the average annual milk yield will be around 1,200 kg.

lOThe common name for Brown Swiss by the Greek farmers
and extension personnel is Schw 2, due to the origin from
the canton of Schpyz (SwitzerIand).

11European Breeds of Cattle, pp. pip., p. 308.

30

Simentals from Yugoslavia have been used after weaning to

finished'weight.

Production Systems

 

Cattle operations range from specialized production
systems to small enterprises in mixed family farm situations.
The following types of Operations predominate in cattle
production: .

(1) Specialized daipy production: There is a small

 

number Of specialized dairy cattle farms, based on foreign
(pure) breeds (Friesians, Holstein) mainly located close
to the big cities (peri-urban herds). The cows are con-
fined throughout the year and receive purchased feeding stuff.
The only land available is for the buildings (stable, and
feed storage) and other livestock facilities. Out of
1,047,260 total holdings in 1971 only 10,660 belong in this
category.12 In Thessaloniki subregion 10 percent of the
total cattle population during 1972 belonged in the category
Of foreign breeds. (Thessaloniki is the second largest

city Of Greece.) The corresponding number for Pella-sub-
region is 3.9 percent.13

The size Of Operation depends mainly upon feed supply,

capital and space availability, and milk prices. The main

 

12Including all the livestock confined operations
(beef, pork and poultry). Statistical Yearbook of Greece,
1972, pp, cit., p. 142.

13

 

Ministry Of Agriculture, Provincial Offices.

31

products are milk and replacement heifers. With calving
rate approximately 85-90 percent and a replacement rate of
16.6 percent, the surplus heifers either remain in the same
operation (if the operator has the desire and ability to
expand his herd size) or are sold to other specialized
dairy operations. Bull calves are a by-product of the
milking herd and are marketed as deacon calves to specialized
beef production farms. Recently, some of the operators
attempted to take advantage of current trends in the Greek
meat market by keeping the bull calves to be marketed as
feeders or finished cattle and thereby develop a dairy-beef
Operation. The operation depends upon beef-milk prices,
feed situation, housing and other facilities. The bull
calves from the dairy herd could also be a source for veal
production, highly preferred by the Greek consumers. Another
source of beef production from the dairy herd is from the
cows culled after the final lactation period.

The average milk production is approximately 4,000
kg. per year. Milk yield for individual herds depends
upon the breeds, feed rations, sanitation and management
factors. Dairy specialists from the United States believe
that "the tendency by Greek farmers to keep dairy cows
tethered in a stable probably prevents these cows from
being most productive; and most certainly results in the

. 1
use of an exce531ve amount of labor." 4

 

‘ 14F. A. Kutish and H. G. Sitler, "A Study of the
Economics of Land Use and Livestock Production in Greece."
United States Department of Agriculture (June 1967). p. 31.

32

(2) Specialized beef production: Beef production

 

can be separated into four phases: (a) producing the calf,
(b) growing the calf (veal, baby beef), (c) fattening the
calf, and (d) producing from animals culled from the pro-
ducing herd. All the phases or combinations can be carried
out in the same farm or on various farms as in the United
States. The specialized beef operations in Greece can be
classified in two categories. First, a cow-calf operation
based on beef imported breeds mostly Aberdeen Angus and
Hereford from the United States carrying out both breeding
and fattening processes on their own or rented land. The
calves are retained until finished, pastured most of the
time and provided additional feed grains and forage during
winter months. Management of production including disease
control and marketing are the most serious problems in this
type of operation.

The other type of specialized beef production is that
of large scale calf operations based on improved breeds
imported from Yugoslavia and the United States which carry
out only the fattening process. Depending upon the location
of the operation, the availability of good pasture and
feed grain, space availability and capital to meet require-
ments, the calves can be either confined or pastured.
United States calves are purchased with initial weight of
50-60 kg. and sold at 450-500 kg. Yugoslavia calves are
purchased at weaning weight and sold at 450-500 kg. The

calves are fed from 5-6 kg. of concentrates and 2-3 kg. of

33

alfalfa daily. A daily weight gain of about 1-1.2 kg. is
the target. In Greece, where "it is the policy of the
Government not to permit meat comparable to that of United
States choice grade to be sold at a higher price than other
cattle, the initial cost of American calves is too high to

"15 Another problem faced by the calf

result in a profit.
fattening Operations is the worldrwide shortage of calves
explained by the traditionally exporting countries meeting
their own needs for beef before selling to other countries.
Yugoslavia, the main exporter of live animals to Greece,
"counts baby beef as a top export and has recently con-
cluded a 5-year agreement (1973-1978) with the European

"16 Also the

Community to assure a stable market there.
lack of good quality grazing land constrains the keeping
of herds for beef production.

Due to the above problems Greece will need to develop
her long range production base for beef either on improved-
native cattle through crossbreeds or on well adapted foreign
breeds.

(3) Beef and milk_production from dual_purpose cattle:
This is the largest category in the Greek herd in terms of

cattle units and production of milk and beef. The herd is

either crossbreds between domestic and foreign, as many of

 

15

16Foreign Agriculture, USDA, Foreign Agricultural
Service, November 26, 1973).p. 7. ‘

F. A. Kutish and H. G. Sitler, pp. cit., p. 26.

 

34

the smaller local breeds are being bred to more productive
breeds such as the Brown Swiss, or crosses between dairy-beef
breeds. During 1971, crossbreeds in Central Macedonia
represented 75.6 percent with 16.3 domestic and 8.1 foreign.17
The average annual production of milk per cow is in
the range of 1,500 kg. to 3,000 kg. according to breed used
for crosses and management practices. The operation is
small in terms of animal units and farm size. A range of
3-15 animal units per farm were found in the study area.
Feed is partly provided by the farm and partly purchased
from the free market or provided by the Agricultural Bank
at lower prices. Bull calves are raised on the same farm
to slaughter weight. Heifer replacements are also produced
'and the surplus heifers are kept, fattened, or sold as live
animals according to the Government's policy and the desire
of the operator to expand. Replacement heifers for the
dairy-beef crossbreed herd must be purchased to satisfy
the genetic characteristics and the desire for more milk
or beef. In any case, milk-beef production does not take
place in isolation from the rest of the farm, but forms a
part of the farming system of the family farm. The farmer
depends partly on the market for additional feed and re-

placements, but produces and raises his own calves, therefore

partially solving the problem of calf shortages.

 

17National Statistical Service of Greece, Agricultural
Statistics of Greece, Yearbook, 1971 (Athens, Greece), pp.
80-8I.

35

The.concernof this analysis is on the above discussed
type of operation, mainly on the dairy-beef crossbreed
herds which are confined all year or which may be allowed
out for exercise and some grazing. The analysis does not
consider beef as a by-product from the dairy herd, but
considers both milk and beef as products from a dual purpose
cow. It is the belief of the author that this type of opera-
tion will provide the bridge to move from small-mixed
operations to specialized ones in a step—by-step movement.

One of the big problems faced by the Greek specialized
large-scale Operations is lack of skill in dairy and beef
management and marketing. Also large-scale beef operations
require higher pasture quality than typically found in
Greece. Good forages must be available also for the small
(5-20 animal units) dual purpose cattle, in order to reach
their inherent milk and beef production capacity. Forages
are grown on the farm and moved to the stall and fed to the
cow with the required balanced grain ration. The farmer,
by finishing his own calves in response to the current
shortage of calves, increases the output of meat per animal
and increases profits by using surplus wheat, barley and
roughages.

Research in the United States (North Carolina) has

18

demonstrated that crossbred calves: (1) show greater

 

180. R. Shumway, E. Bentley and E. R. Barrick, "Economic
Analysis of a Beef Production Innovation: Dairy-Beef Cross-
breeding," North Carolina State University, Department of

36

viability than purebred calves; (2) are larger than tradi-
tional beef calves; (3) are weaned earlier; (4) have higher
pregnancy rate; and (4) yield a higher return to land,
labor and management than beef cattle.

In general, Greece is characterized by climatic
and physical conditions rather unfavorable to animal
production, and a controlled environment with confinement
facilities and good quality crossbreds cows may be part of
the solution until pastures are improved, and better dairy
and beef management skills are developed.

(4) Beef and milk production from the indigenous
ppppip: This is a low productivity cattle operation, pro-
ducing both milk and beef from the well adapted domestic
herd. Some years ago the same animals were used also for
work, but increased use of mechanized equipment for farm
operations has almost eliminated this practice. These small
enterprises with l to 3 animal units provide balance in the
small farm operation by utilizing slack labor and crop
by-products and by providing milk and beef to the family.
The main policy is to upgrade the domestic herd by crosses
with foreign breeds. This has been done successfully
during the last decade by using mostly artificial insemina-

tion. Milk production ranges between 500 and 1,200 kg. per

 

Economics, ERP-26 (March 1974). This economic study compares
one crossbreeding system, Angus-Holstein cows bred to a
Charolais bull, with purebred Angus cattle.

37

year and the calves raised reach a maximum of 350 kg. live
weight. Cows and calves pasture together mainly on the
low quality communal pasture and receive a small amount

of additional feed grains during winter.

Productivipy Measures and Slaughterings

 

Cattle productivity is usually expressed in terms of
extraction rate, calving rate, mortality rate, and in
general, growth rate. Growth rate was examined in previous
sections and show that the development of the industry

during the last decade was very low.

Extraction Rate

The extraction rate is the proportion of the cattle
population marketed each year. To calculate the extraction
rate the number of cattle slaughtered was assumed equal to
the number of cattle marketed. It was calculated for various
age groups according to available data. The extraction rate
for all cattle was found for 1971 equal to 54 percent as
compared to 31 percent for 1961 (Table 2.4). This extrac-
tion rate may be compared with 40 percent in United States,

19 It is

29 percent in Australia, 24 percent in Argentina.
considered very high and thus offers some explanation for

the low development of cattle herds in terms of total

 

19A. Posada. "A Simulation Analysis of Policies for
the Northern Colombia Beef Cattle Industry.” (Ph.D. disser-
tation, Michigan State University, 1974).

38

Table 2.4. Cattle Slaughterings, Extraction Rate, and
Productivity Index for Selected Years

 

 

 

Year Cattle Slaughterings Extraction Productivity
'000 '000 Rate Index
(Percent)
1961 1,069 329 31 29
1966 1,082 490 45 67
1967 13094 507 46 69
1968 1,038 536 52 81
1969 1,097 592 54 86
1970 952 559 59 94
1971 986 535 54 87

 

 

 

 

 

Source: The Extraction Rate and Productivity Index have
been calculated by the author using as basic
data those provided by the Statistical Yearbooks
of Greece (1962-1972).
population. Among the factors that keep high extraction
rate, the unfavorable cow milk prices, favorable seasonal
beef prices and feed shortages played the most significant
role. The extraction rate for calves with age less than
a year is more than 50 percent (57 percent for 1966) and
shows an irregular trend, depending upon veal prices, milk'
prices, inputs availability, mortality rates and various
government policies. The proportion of calves slaughtered
for veal is extremely high and reflects traditional prefer-

ences of the Greek consumer for veal. Logically, feeding

of these animals to heavier weights would increase beef

supply.

39

Calving Rate

The number of calves born as a percent of females
at breeding age depends upon genetic characteristics
(breed), climate, adaptability Of particular breed, nutri-
tion, sanitary and medical care. A low calving rate
suggests a potential for improvement in the production of
calves. The model calving rate was found in the study
area to be approximately 80 percent, with a range from

65 to 100.20

Mortality Rate
Mortality rate averages 6 percent a year for all
cattle. Death losses are greater among calves during

the first months where the rate reaches 8-12 percent.

Average Slaughter Weight

Average slaughter weight (carcass weight) is indicated
in Table 2.5 for calves less than 2 years old, cattle more
than 2 years and all cattle together. It shows an increas—
ing trend and space for improvement. The trend to increase
average carcass weight has been attributed mainly to govern-
ment policy, and diseases control, and is the result of
more intensive fattening and of the fewer calves slaughtering
for veal. Failing to increase the slaughterweight, more

calves will be needed for a given amount of beef output.

 

20The FAO Study "Marketing of Livestock and Meat" for
Greece, TF-77 (Rome, 1967) accepts a calving rate equal to
40 percent (p. 5). This rate is very conservative though
their definition is the number of calves born per 100 head
of cattle.

40

Table 2.5. Average Slaughter Weight in Kg/Head,

 

 

 

1967-1972
Year Calves Cattle All Cattle
(0-2 Years) MOre Than
2 Years
1967 146 168 151
1968 149 174 154
1969 150 173 155
1970 160 176 163
1971 168 182 163
1972 173 187 ---

 

 

 

 

Source: The data were compiled from the follow-
‘ ing sources: (a) Agricultural Statis-
tics of Greece, 1968-1971, op. cit.;
(b) KEPE, Development in the Livestock
Industry," (Athens, 1972); (c)
Statistical Yearbooks of Greece, 1967-
1972, pp. cit.
Seasonal fluctuations in slaughtering exists as a
result of demand for veal, beef and milk, feed and housing
availability, and such local factors as religious mores

(Appendix B, Table B-l).

Productivity Index
Productivity index (Table 2.4) is obtained by
dividing the production Of the year (in kg. carcas weight)

21 It is a

by the cattle population during the same year.
combination of extraction rate and average carcass weight,
and shows whether veal-beef production grows faster than

cattle numbers. The productivity index increased from 26

in 1960 to the high 803 or low 903 ten years later;

 

21OECD. "The Market for Beef and Veal and Its Factors,"
(Paris, 1967), pp. 16-17.

41

Feed Production

 

Feeding stuff is the major input for cattle enter-
prises as it represents more than 55 percent of the total
cost and increases as output of milk increases (Table 2.6).
Economic and technical interdependence exists among feed
and cattle production as "any change that affects either
feed or meat must inevitably influence the supply and/or

demand conditions of the other."22

Table 2.6. Contribution Of Various Expenses to the Total
Costs Per Cow According to Milk Production

 

 

 

 

Expenses Milk Production in Kg
1501-2000 2001-2500‘ 2501-3000
1. Labor (Percent) 20.8 20.2 19.2
2. Feed (Percent) 57.3 59.3 60.0
3. Depr., interest,
mort. per cow 14.2 13.3 13.5
4. Depr., interest,
repairs of bldgs. 4.1 3.8 3.9
5. Vetr., taxes 3.6 3.4 3.4
Total 100.0 100.0 100.0

 

 

 

 

Source: The table was adopted from G. J. Kitsopanidis,
"The Economics of Milk Production in Central
Macedonia, Greece," Agricultural Economic Review,
Vol. VI, No. 1, (Thessaloniki, 1970), p. 18.

 

22D. Colyer and G. Irwin, "Beef, Pork, and Feed
Grains in the Cornbelt: Supply Response and Resource
Adjustments." (Columbia, Missouri, August 1967), p. 9.

42

Depending upon the feeding system (confined or not),
size and location of cattle operations, the cattle feed
is composed of feedgrains, fodder crops and supplements.
The majority of the small, cattle enterprises on mixed
farms feed their animals with crOp by-products or crop
residues otherwise wasted. Domestic breeds use the
communal land for grazing and small quantities of grains.

Dairy operations, dual purpose cattle production
and calf fattening enterprises on specialized farms have
controlled environment confinement facilities in which
cows and calves receive only harvested feed grains and
forages. "The grain component of feeds has soared in
recent years, reacting to high protein meal prices."23
Therefore, feed grains prices is another major factor
determining to the profitability level for milk and beef
production.

Greece has increased rapidly its grain and forage
production, but even with the existing livestock population
the total supply is inadequate. Appendix B, Tables B-2
and B-3 present the feed grains and fodder crops production
situation from 1963 to 1972. As Table B-2 indicates area

under wheat has been decreased by 17.7 percent, but total

production increased by 25 percent from 1963 to 1972. This

 

23J.LOpes, "Greece to Triple '73-74 Grain Imports,"
Foreign Agriculture, USDA, (October 22, 1973). P. 8.

43

has been largely a function of new varieties, fertilizers
and mechanization, which have resulted in yields increasing
from 1,314 kg. per hectare in 1963 to 1,998 kg. per hectare
in 1972. Area under barley and total barley production
have been increased by 135 and 319 percent, respectively
from 1963 to 1972. This was the result of a substantial
transfer of area under wheat to barley production and
increased average yield by 78 percent. Corn area has
decreased slightly but the production has increased by

129 percent, due to an increase in average yields per
hectare by 158 percent, resulting from new hybrid varieties
on irrigated land.

The production of fodder crops in Greece has also
increased, but still is in a deficit stage. Alfalfa makes
up the largest percentage of fodder crops increasing from
a total of 614 thousand tons in 1963 to 1,700 thousand
tons in 1972 (Appendix B, Table B-3). Green corn produc-
tion increased by 125 percent but still its contribution
to livestock feed is very small. The feeding of corn
silage is not practiced on the small farms.

Feed grain requirements have exceeded production
especially in recent years as a direct result of the live-
stock industry's adjustments which have been accelerated
by various incentives of the government. The situation
has caused Greece to import substantial amounts of feed

grains (mainly corn) and high protein meals (fish meal,

I! l (I‘ [I
ll. all. All I'll I

II-

44

meat meal and soybean meal) and build up its feed mixing
industry to improve feeding efficiency. Feeding stuff
imports (not including unmilled cereals) reached $19.3
million in 1972, an increase of 421 percent from 1963
(Appendix B, Table B-3).

Greece's dependence on foreign supplies for feed
and in view of the short world supply of grain and high
protein meals, has shifted government's concern in the
direction of self-sufficiency at least in feed grains.

With this background with regard to the livestock
and feed situation in Greece, we turn to the research

methodology which would analyze the small farm's role in

this situation.

'1 I'll ‘ Ill II I. II I I! l I‘ I‘ll,

CHAPTER III
RESEARCH METHODOLOGY AND ANALYTICAL PROCEDURES

Given the nature of the problem and the objectives of
the study, the techniques that were employed involve the
use of linear programming analysis and budgeting to build
on the descriptive analysis thus far presented.

Linear programming analysis is the main analytical
approach used in this study to examine the impact of
enterprise reorganization on farmer's income, livestock
supplies, and government policies. Budgeting and further
descriptive analysis supplements this main analytical
approach. Parametric linear programming methods were used
to investigate the impact of a variation in milk, beef
prices and resource levels on enterprise organization and
farm income.

The Objective function to be maximized in the program-
ming model is ”gross margins” which is defined as total
receipts less variable production costs. This measure of
farm income was considered as the goal to be maximized
because if it cannot be shown that more livestock on family
farms will increase farm income, then we cannot expect
farmers to respond in ways favorable to present national

goals.

45

|lll I‘ll l I 'II I!!! II II 1 III! | l 1 l ( [‘.'.

46

The steps by which the study was proceeded from data
collection to final optimal solutions are as follows:1

(1) defining the study area,

(2) choosing the sample size,

(3) designing the questionnaire,

(4). surveying the area,

(5) using the survey data to define average farm
resource situations,

(6) constructing the model,

(7) programming the average farm, and

(8) applying price mapping and resource mapping to
the optimal plan.

The first five steps will be presented in this chapter.

Sources of Data and Area Studied-

 

Several sources of data, both primary and secondary
were used. The major data source for determining the
resource base, production and organization information was
the survey undertaken in the study area. Data concerning
the input-output coefficients had to be assembled and
synthesized from the survey, secondary sources, personal
interviews from technical agricultural extension specialists

and economists or were drawn from research publications

 

1The first four steps were accomplished by the Depart-
ment of Agricultural Extension and Sociology, (Head,
Professor Anthony Adamopoulos), University of Thessaloniki,
in collaboration with the author, and were financed by the
National Research Institute. ‘

47

related to the study area. The coefficients reflect an
assumed level of technology, size of farm, number of cattle
and institutional structure. Price data for both inputs
and products to be marketed were obtained from the National
Statistical Service of Greece.

The area chosen for the empirical analysis is the
Central Macedonia, which iS’a region of the Macedonia

2 The primary reasons for choosing Central

division.
Macedonia are: (1) Central Macedonia is the largest pro-
ducing region in Greece in terms of cattle production and
population. In 1972, 23.26 percent of Greece's cattle
population was concentrated in Central Macedonia producing
23.6 percent of the total beef production in Greece.3
(2) Livestock production has improved markedly because of
improved technology, better quality of feed and feeding
practices. Low productivity domestic breeds have decreased
from 48.31 percent in 1964 to 13.15 percent in 1972 to

give space to improved domestic and foreign breeds (Table 3.1).

Secondary reasons for choosing Central Macedonia

include: (1) the area is more familiar to the author in

 

2Greece is divided in ten divisions as follows:
(1) Greater Athens, (2) Central Greece-Euboea, (3)
Peloponnesos, (4) Ionian Islands, (5) Epirus, (6) Thessaly,
(7) Macedonia, (8) Thrace, (9) Aegean Islands, (10) Crete.
Macedonia has three regions namely Central Macedonia (the
study area), Eastern Macedonia, and Western Macedonia.

3National Statistical Service of Greece, Agricultural
Statistics of Greece, 1971. (Athens, Greece, 1973),
pp. 80-92. ‘

48

Table 3.1. Cattle Breeds in Central

 

 

 

 

Macedonia
Year Domestic Improved Foreign—
Breeds Breeds Breeds
------------- Percent-----—-----—-
1964 48.31 51.56 .04
1970 21.08 71.97 6.95
1972 13.15 76.18 10.67

 

 

 

 

Source: National Statistical Service of
Greece, _p. pip.

terms of farm organization and practices resulting from his
participation in a number Of research projects there. Where
judgment was required, this previous experience helped to
properly specify the objective function, constraints and
activities, and therefore minimize the specification error.
(2) There are several publications related to the agricul-
tural industry of the area, which the author used for
reference. (3) Technically it was easier to collect the
survey data by using well trained senior Agricultural College
students at the author's alma mater, and (4) the thesis
project was a part of a research project undertaken by the
Department of Agricultural Extension and Sociology, Univer-
sity of Thessaloniki, and was financially supported by the
National Research Institute.

The studied area consists of six subregions (Nomos):

Chalkidiki, Imathia, Kilkis, Pella, Pieria, and Thessaloniki,

49

with an area of 14,855 square kilometers (total Greece
covers an area of 131,986 square kilometers), and a popu-
lation of 1,890 thousand which represents 21.5 percent of

the total Greek population.4

SamplingrProcedures

 

The population of the "Central Macedonia Livestock
Project," of which this thesis is a part, was defined to
include all the types of farms from specialized crop and
tree farms, specialized livestock farms to mixed family
farms which constitute the majority of farms. First a
random sample Of 630 farms to be interviewed was drawn from
the entire population and a subsample of 190 farms was
drawn from the initial sample for the purpose of this
thesis. This subsample includes mixed family farms with
cattle enterprises. Excluded are specialized large scale
livestock farms and farms with mainly crop, vegetables or
fruit production.

The heterogeneity of the population in terms of live-
stock practices, soils and vegetation conditions,.topography,
type of farming and metrOpolitan influence led to the use-
of stratified random sampling method for the purpose of
taking into account those differences. The basic idea was

that, "it may be possible to divide a heterogeneous population

 

4National Statistical Service of Greece. Statistical
Yearbook of Greece, 1973 (Athens, Greece, February 1974),
pp. 18-19. ‘

 

 

50

into subpopulations, each of which is internally
homogeneous."5

The overall sampling procedure was carried out in two
phases.

Phase 1: Recognizing tOpography as a major deter-
minent of the land use, and rural-urban differences in
terms of production, consumption and marketing, the total
number of communities and municipalities (population) was
stratified in a three way classification according to
geographic subregion, elevation above sea level, and
population size (number of inhabitants). The ”population”
N was divided into subpopulations of N1, N2,. . .,NR, so

that N1 + N + ,. . ., + NR = N. The final sample size

2
is denoted by n and it is equal to the sum of sample sizes

within the strata (n + n + ,. . ., + n = n). Each
1 2 N R
stratum weight (WR) is equal to WR = NB' The sample vari-

ance st,is used here as an unbiased estimate of the popu-
lation variance SR2° According to ”optimum allocation"
method6 the sample size is given by the formula:

2
(sz R)

n:
dj 1 2

:2 + N wRSR

 

 

5William G. Cochrane, Sampling Techniques, Second
Edition (New York: John Wiley and Sons, Inc., 1963), p. 88.

. 6Anthony L. Adamopoulos, "Farm Land as a Basic
Criterion of Sampling in Agricultural Economic and Social
Regional Surveys.” (Thessaloniki, Greece, 1960), pp. 23-24;and
W. G. Cochrane, pp. pip., p. 104.

 

51

where t 1.96 for P = 0.95

d = the desired half-width Of confidence interval
where Q; = V is the desired variance in the
sampletestimate.

SR = the standard deviation of the average animal

units for each community and municipality in

Central Macedonia.
Applying the above formula the sample size was estimated
equal to 90 communities and municipalities. For better
distribution in the whole region, iso-distances and replace-
ment purposes 15 percent extra communities were selected
for a total of 103 to be surveyed. The distribution of
the total sample size (n) within the strata was obtained
by using the formula

szR

n
R ZWRsR

 

n

Phase 2: After selecting the number Of communities
the number of holdings to be interviewed was selected with
almost the same method as Phase 1. The difference is that
NR in Phase 2 denotes the number of holdings for each sea-
level stratum and geographic subregion, and the used stan-
dard deviation was from the average farm size. The final
sample to be interviewed was found equal to 610 holdings.
Extra holdings were selected for replacement purposes

(Table 3.2).

52

Table 3.2. Sample Size (Selection of Communities and

 

 

 

 

 

 

 

 

Holdings)
Subregion Communities Sample Holdings1 Sample
(Number) Size (Number) Size

(Phase 1) (Phase 2)

(Number) ' (Number)
1. Thessaloniki 121 33 10,709 175
2. Pieria 44 - 11 3,296 54
3. Pella 85 15 3,256 95
4. Imathia 65 14 2,542 87
5. Kilkis 76 15 3,267 119
6. Chalkidiki 76 15 3,332 80
Total 467 103 26,402 610

l

The number Of holdings correspond to the number of commun-
ities included in the sample.

Questionnaire Design and Interviewing

7

 

A questionnaire was designed to be used in collecting
farm resources data, production and marketing practices,
farm receipts and expenses, labor requirements, and input-
output coefficients. These data were collected by personal
interview. Senior agriculture college students of the
University Of Thessaloniki, in training at the Department

of Agricultural Extension and Sociology were used as

enumerators. The interviews were conducted in the summer

of 1974 to cover the 1973-74 crop season.

 

7Part of the questionnaire used is included in
Appendix C.

53

Construction of an Average Farm

 

For programming purposes an average farm was chosen
from the stratum 0-249 meters from sea level and represen-
tative of the six subregions. The same stratification used
for the sampling procedure was utilized to classify the
farms. The average farm concept was more appropriate for
the specific purpose of estimating optimal plans for the
region.8 Thus, the arithmetic mean was used for the most
of the analysis, except for Special cases, such as tractor
availability where the "mode average" was used. Farms with
more than ten cows were drOpped from the average farm in
order to reduce the upward bias of the herd size. 'Also farms
with domestic breeds were not considered in the analysis.
This was done to reflect the trend of changing to improved
domestic and foreign breeds.

The decision to use only one average farm was made
in order to offer the opportunity for more detailed analysis
using parametric techniques. A large number of average
farms can be avoided by using some parametric resource and
price programming on fewer farms.9 Therefore, an optimal
organization for the average farm was computed at various
combinations of milk and beef prices (price mapping), and

at various resource levels (resource mapping)“

 

8Jerry A. Sharples, E. 0. Heady and M. M. Sherif.
"Potential Agricultural Production and Resource Use in
Iowa," R. B. 563, (Iowa State University, June 1969), p. 425.

9Jerry A. Sharples, "The Representative Farm Approach
to Estimation of Supply Response.” USDA (December 1968), p. 10.

I .IIIII (5' 'I‘ 'I

54

Theoretical Considerations

 

The linear programming technique was used to find
optimum combination of activities which maximizes farm
income expressed as gross margins for given prices, input—
output coefficients and resource constraints.

The mathematical formulation of the model in matrix
notation is as follows:10
Max Z = C'X

Subject to: AX : B

and X 3 0

Where Z

objective function to be maximized

C = n by 1 vector of prices

X
II

n by 1 vector of activity levels

A = m by n matrix of input-output coefficients

B = m by 1 vector of available resources.

The above model assumes that the supply of resources,
input-output coefficients, prices of resources and activities

are known with certainty. In reality when 'uncertainty exits

as to the prOper resource restrictions, input coefficients
or prices to be used, modified simplex methods can be used

11

to advantage.” A conceptualization of such a linear pro-

gramming problem with parametric objective function is given

 

lOE. 0. Heady and W. Candler, Linear Programming Methods.
(Ames, Iowa: Iowa State University Press, 1973), p. 416; and
Olabisi Ogunfowora, ”Derived Resource Demand, Product Supply
and Farm Policy in the North Central State of Nigeria.”
(Ph.D. dissertation, Iowa State University, 1972), p. 12

113. o. Heady and w. Candler, 92. cit., p. 232.

ilul ll! I'll. l.‘ '| II I .III: I 'II. II- ' 'Il: ‘

55

by Ogunfowora12 as follows:

n
Max Z = 2 C.X.
0‘ j=lJJ
m
Subject to Z a..X. < b.
i=1 13 J ‘ 1
and X. > 0
J—
Where Z = Z(Xl, X2,. . "Xj" . .,Xn)
C! < C. < C?
J - J — J!
C? - C3
—l~———l-= k or CT - C! = Ak
A J J
Z = the ath
a

objective function to be maximized for

a given price level within the acceptable price

range.

bi = the level of the 1th

resource available

C5 and C3 = the lower and upper limits of the price of the

jth activity

A = constant increment in the price of the jt

h activity

k = the number of optimum solutions within the price

range

In the above modification it is assumed that farms have

achieved an optimum organization before price changes occur.

The details on the construction of the model and the

solutions will be presented in Chapters IV and V, respectively.

The problem was solved on the CDC 6500 computer at Michigan

State University using the CDC APEX-I program.

 

l2

0. Ogunfowora, op. cit., p. 13.

CHAPTER IV
THE STRUCTURE OF THE LINEAR PROGRAMMING MODEL

The mathematical formulation of the model was presented
in Chapter III following a discussion in Chapter II of the
structure and policy issues of the livestock industry. This
chapter will provide the structural components of the model
in terms of activities included, resource levels, and input-

output prices.

Model Activities

 

Seven general types of activities were included,
classified in 44 columns (Al - A44) as follows:

(1) Crop production activities (Al - A4)

(2) Land rent activities (A5 - A6)

(3) Crop selling activities (A7 - All)

(4) Feed buying activities (A12 - A18)

(5) Livestock production and selling activities(A19 - A33)

(6) Labor selling and hiring activities (A34 - A41)

(7) Capital borrowing activities (A42 - A44)

Growing and selling tobacco activity was also added
to the initial solutions. In subsequent solutions tobacco
was eliminated and the resources used for tobacco were
transferred to other activities in the model.

The activities to be included were identified by the

56

57

researcher in the survey area and/or were suggested by the
farmers or agricultural extension specialists as new feasible
activities. Activities or enterprises which made no signi-
ficant contribution to the average farm output have been
excluded, e.g., poultry, vegetables for home consumption,
1-2 pigs, and small number of trees. The budgets for crop
and livestock production activities (variable costs and
returns) were synthesized using the survey data, previous
studies; unpublished data and personal interviews with crop
and livestock specialists. All the sources will be identi-
‘fied during the discussion of particular budgets. The
existing semi-advanced level of technology was assumed for
crop production which allow for the use of more fertilizers,
new higher yielding crop varieties, mechanization and dis-
ease control. For livestock production activities, lower
than average technology was assumed in terms of mechaniza-
tion and feeding facilities and semi-advanced technology

in terms of housing facilities and genetic improvement of

cattle.

Crop Production Activities
Crop enterprises considered were wheat, barley, corn
for grain, and alfalfa, which could be sold, fed to livestock
or both. At the present, corn silage is not a common prac-
tice for the small family farms. Wheat and barley are
allowed only on nonirrigated land while corn and alfalfa

are permitted on irrigated land. The crop activities, their

58

variable costs, and their requirements for land, labor and
capital are presented in Tableau I. Obviously, different
labor, land, capital and price assumptions would result in
different costs. Annual budgets are presented in Appendix
D, Table D-l. A summary of estimated annual costs and
returns in terms of gross margins per stremma is presented
in Table 4.1. For all Tableaus negative signs in front of
the objective functioncoefficients (Cj values) indicate
costs and no signs (implying positive) indicate income,
while negative signs in front of coefficients indicate
additions to resources and no signs indicate use of the
resources.

Table 4.1. Annual Costs and Returns Per
Stremma for Crap Production

 

 

 

 

 

Activities

Activities Total Total Gross

Revenue Variable Margin

' Costs

------------ Drachmas---—--------
Wheat 1,047 301.1 745.9
Barley 1,059 281.8 777.2
Corn 1,598 355.4 1,242.6
Alfalfa 2,880 464.6 2,415.4

 

 

 

 

Source: Appendix D, Table D-l.

59

.mua magma
.9 game“? HH..H awe/aw mum 3833 vegaom paw 96%. m5 a.“ mom: mcowumgmufim mo coaumdmaaxm mama

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

8e SN 3V8 same. 9H3 :8 Bo on
92 we: m.H SH .0. .sm 8
we as n. we. 8: Hm R
e.H m. a. H.... e H3. 8
we mHH o.H Hm.H as d nu
ea 9mm 3 woe e .5. a
H SNH- .3 a
. H 03. 8 w
. H SN. 5. H
H e8- 8? Eu 0
H new... E n
H 8 .SH .4
H 8 Hum n
H - H H h d N
H .. H H 8 dz H
.3 o: 85 8a ma. 8a. SN. 93¢- .32.. 9H3- «Ho? No
we we we we me 8m 8m 8m 8m 8m 8m
5am 58m gm as mam a a s5 a”: em .35 8..
H2 oz 9.. 9.. 2 3H 2 e4 2 2 H<
83332. .02
$3333 338 8.6 ES 83H aflfiflfi 8396on 85 888m 38
antenna 338 88 e8 83 use 83388 8.6 .H 2.389

H

60

Land Rent Activities

Renting land was included as a means to increase the
farm size and to permit examination of the influence of
this activity on farmer's income and enterprise organization.
Because of the difference in rental rates among irrigated
and nonirrigated land, the separate treatment of these land
categories is justified.
. value) include

J
the actual rent paid by the farmers and reflects an average

The objective function coefficients (C

rent for the study area. Rent activities were based on the
assumption that out-migrating farmers will rent their land
Ito continuing farmers and will not turn to extensive culti-
vation, e.g. wheat production. The initial amount of

rented land was estimated from data received from the farmers
interviewed;however later, average size was permitted to

increase. No land was allowed to be sold for cash.

Cr0p Selling Activities

All crop products and by-products were permitted to
be sold or fed to livestock or both. Because of the con-
cession subsidies provided for feed grains by the Agricul-
tural Bank of Greece, farmers may sell part of their own
crops for cash and buy back from the Bank at a price lower
than the market. This amount of cash was also used to
finance the business during the year. The objective func-
tion coefficients (Cj value) for cr0p selling activities

indicates prices received by the farmers during 1973-74

61

period and reflects an average for the whole country. A
country average was used instead of study area average due
to the wide variation of prices and marketing practices

found in the area.

Feed Buying Activities

In addition to wheat, barley, corn, alfalfa and straw
grown on the farm, bran and cotton cake were allowed in
order to reflect what farmers are actually feeding. The
prices for purchased feed stuffs were higher than the cor-
responding selling prices and correspond to the free market
price. This was done, first to take into consideration
transportation cost, and second, as a solution devise to
provide the opportunity for the farmers to use their home-
grown feed. In reality, part of the feeding stuff is
provided through the Agricultural Bank of Greece with prices
at least .50 Dr lower than in the free market.

Other feed in the ration included high protein meals
such as fish meal, sugar beet pie, soya meal or ready
concentrates from the new mixture feed factories. Vitamins
and minerals are also provided in the concentrates and were

included in computing variable costs.

Livestock Activities
One way to increase the size of business for small
family farms with limited resources, mainly land, is through

intensive livestock production enterprises. This can be

 

’ I I'll I“ ll!“ (,1“ [.II 'II I l I

62

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

o.e a.m o.H H.m m.~ m.m mam ea omo on
HI wM 00 HH
H- me am OH
H- mm mq< a
H- we moo m
H- mm mam a
H- mm mam e
H- we as n
o.e- “.m- o.H- H.m- m.- m.m- m.m- H.u
we we we we we we we muHc:
oom‘ mam mamm mmm mH<m m<mm zmoom
mHa. ~H< eH< mH< ¢H< mH< _NH<
.oz
mmwuw>wuo< wafnam pooh moo-308m .3om
eeHuH>Hue< waHesm ween .HH seeHeey

63

achieved through better utilization of existing resources
with the same or different feasible activites. Therefore,
in the initial analysis, expansion will take the form of
a more intensive use of presently controlled resources.
Later in the analysis expansion will be examined by gain-
ing control over additional land and capital resources.

The enterprises considered for this analysis are in
the category of cow-calf operation and the calves are
finished on the same farm.with home-grown and/or additional
purchased feed. All the calves are produced on the farm,
except for improved breed replacements which can be pur-
chased if the farmer wants to improve his herd and provid-
ing price relationships warrant it. Because the assumed
breeds are dual purpose (milk and beef), coming from dairy-
beef crossbreedings, the system is flexible in terms of
more beef production and less milk or vice versa.

By considering these enterprises it was hypothesized
that the farmer will be able to make effective use of his
available labor during the winter months when it otherwise
has few economic alternatives. Also these enterprises
would have the advantage of requiring less capital when
the calves are raised on the farm than if purchased. This
organization is also expected to increase veal-beef pro-
duction by eliminating one of the main obstacles, e.g. the
shortage of calves supplied for fattening enterprises.

The profitability of a particular enterprise, feed

availability, diseases, and government policies for

64

.livestock production and marketing, are the most important
factors for the producer to make the decision as to which
age and weight he will market his calves. The following

flow diagram (Figure 4.1) provides the basis for building

the livestock production and marketing activities.

 

age = 10 mo.
gain = .8 kg/day

275 kg

age = 16 mo.
gain = l kg/day

45% kg

age = 18 mo.
gain = .900_kg/day

l

509 kg

 

New Born Bull Calf-———+35 kg

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

+35 kg age = 16 mo.

New Born Heifer Calf gain = .78 kg/day

 

 

 

 

 

 

 

 

 

409.5 kg
age = 26-28 mo.
Replacement

540 kg

Figure 4.1. Bull calves and heifers flow diagram.

Only in special cases like diseases or feed shortage
will the farmer slaughter heifers instead of keeping them

for replacement or sale as live animals to specialized

65

fattening enterprises. No bulls are kept and their services
are provided by artificial insemination showing up as a
variable cost.

I Livestock activites are presented in Tableau III (A19
through A33). For each activity (enterprise) a unit was
assigned together with the corresponding amount of concen-
trates, forages, labor and capital used to produce the

unit. The objective function coefficients (Cj values)
indicate variable costs when raising activities and gross
returns when selling activities are considered. The selling
activity objective function coefficients were calculated

by using the formula:

.-.. ~k *
Gt Wt Ct Pt

Where:
G - gross returns
W = live weight
C a carcass weight coefficient
P = average received farm price

t - time period
Live weight can be controlled by the producer while prices
are controlled by supply and demand or through government
interventions.

All of the returns and costs are obtained by the bud-
geting process and are shown in Appendix D, Tables D-3 and
D-4.

Two cow activities (Cow I and Cow II) have been included

66

.uxwu use CH mHnmmwcmnoumucm

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

pom: sewn w>mL meo HHDL vcm Homum maumu ecu .c3ocxc: mH kumuummu we LUH£3 wm>Hmo mama mo coHuuoaoua onu «onwma
oooeH ea oHH: mm
NmH oHe mee eHe oHN emm emm so ueo on
He m.Hm me m.Hm m.NN HH HH muse: Hem eN
oe m.Hm m.Hm m.He mH HH HH ease: Hm HN
me m.NN m.NN m.NN mH mH mH eeeo: H3 eN
m.Nm m.NN on m.NN m.NN eH eH muse: He mN
m.eNN eNH meH ONH mH mom mom ease: Hue eN
H- H- H H H- H- H- H H H eee: :m:: mN
H- H H H eee: om: NN
H com 00m com com com oomN- oomN- e: eHHz HN
H emH.- emH.- eee: HHDU oN
H- ee.- eeH. eeH. eee: ewe: eH
H H ee.- eee: eH: eH
H ee.- eee: eHm HH
H ee.- eee: eHm eH
H ee.- eee: HOHm mH
H H e. - e. - eee: o: eH
H H H e. - e. - eee: om eH
H H eee: 300 NH
He NH NoH NH HmH HmH ex on HH
Noe eHN eeN eHN eeH men men e: :: OH
HeeN oeeH emNN oeeH OHe mmmN oeHN e: :He m
NHH Nee Nmm Nee eHN NeH NeH e: :00 e
Hme eHm eee eHm eeN eee eee e: :<: H
oee oee oem oee oom mem oeeH e: Hem e
emH eeH eHH eeH NH w: :3 m
om.e meee HeeN- eHNeH oommH NmH- OHe- eHemH eeHmH moHoH mee- eHe- oHN- emm- emm- no
we eee: eee: eee: eee: eee: eee: eee: eee: eee: eee: eee: eee: eee: eee: euHe:
:HHzm ooom meme mm:m Hm:m HH<:: m<:: mmm mmm Hem emm Hmm: eye: can mean
nee Nme Hme om< eNe eNe HN< eNe mNe eNe mNe NNe HN< ON: eHe
mwwuw>wuo< xooum0>wa~ QOUHHHOmUM 3W“

 

 

 

 

 

mmwuw>wuo< xooumo>mq

.HHH smuanmk

Ill [.1 l.l.IlllI-llll.l{{[lll.lli[ll."['|IlllII’1'!’

67

to reflect the two feeding systems with and without straw.
Both activities assume 80 percent calving rate with 50
percent bull calves and 50 percent heifers, and 15.9 percent
of the c6ws are culled each year. The alternative of repla-
cing cows by purchasing or by raising replacements is per-
mitted in the model. No purchase of calves (except replace—
ment heifers) were permitted, but they were transferred
from the cow-calf activities to be raised to slaughter
weight by any of the calf-raising activities. Raising bull
calves and heifers activities are examined with specific
start weight, gain per day, and selling weight. The model
was designed to reflect government's policy by keeping a
bull calf until it reaches 450 kgs liveweight and a heifer
until it produces the first calf. Also the enterprises
were designed to represent the situation where difficulty
exists in terms of feeding stuff availability and prices,
variation of slaughter prices and environmental considera-
tions such as diseases and hazard weather. The alternative
of feeding calves on pasture was not considered owing to the
shortage of good quality pasture land and the lack of
consistent and complete data.

Since cattle can be raised and sold at various ages,
and weights, the following activities were considered.

Raising activities: A21 = raise bull calves for 10
months

A = raise bull calves for 16
22
months

A = raise bull calves for 18
23
months

A27 = raise heifers for 16 months

A28 = raise heifers replacements
for 28 months.

sell 10 month old bull

Selling activities: A24
calves

A = sell 16 month old bull
calves

A26 = sell 18 month old bull
calves

A = sell 16 month old live
29 .
heifers

A = sell 16 month old slaughter
30 .
heifers

Additional activities:
A31 = Buy replacements
A = Sell cull cow

32
A33 = Sell milk
The demand for baby beef and veal was assumed to be
satisfied mainly through domestic calves not otherwise
fattening to heavy weights and from specialized dairy bull

calves.

Labor Selling and Hiring Activities
Labor selling and hiring activities are also included
for any season during the year. The wage rates are those
averages at the study area during the survey period. Labor
can be sold out from the available stock of family labor

hours. Exchange of labor among farmers during‘peak periods

69

was assumed to cancel out. Of course, when additional

labor was required, payments were made. In kind payments
were transferred to money value by multiplying the product
with its average price. Labor selling and hiring activities

are presented in Tableau IV.

Capital Borrowing Activities

Borrowing short term capital for crop enterprises with
5 percent interest rate, and for livestock enterprises with
4 percent interest rate activities were included in the
model to evaluate the potential contribution of credit
facilities to farm income and enterprise reorganization.
Also medium/long term capital activity was allowed with 4
percent interest rate to be used for buying replacements
and expanding livestock housing facilities. Capital

borrowing activities are presented in Tableau IV.

Resource Availability and Restrictions

 

Farm production, farm income and enterprise reogran-
ization are limited by the availability of resources.
Therefore, it becomes necessary to establish resource
restrictions representative of the average farm. Restric—
tions were placed within the model to simulate the condi-
tions normally experienced on mixed family farms and thus
produce applicable results for the assumed conditions.
Restrictions on land, capital, labor and livestock housing

facilities comprise the resource or input restrictions and

70

 

 

 

 

 

 

 

 

 

 

 

 

 

H- .un UHHZ mm
H .HQ HUHmH mm
H .Hm Honu Hm
om.u na.u .HQ omo on
H H H H munom HHm mN
H n H . musom Ham mm
H u H mHSOm Hm mm
H n H mHDom H3 cm
H u H musom Hm mm
H H H H munom Hm< «N
d1
«0.: #0.: no.1 mun 0N: HN: om: ow mm om mm .0
.HQ .HQ .HQ unom Haom know “now know Room Mao: Hdom muHcD
Hmmz HEm 02m Hbmm <Hmm <H3m ¢Hhm Hsmm <Hmm <H3m <Hmm
¢e< mq< ~¢< He< o¢< mm< mm< nm< om< mm< ¢m<
mmHuH>Huu< Hoz
wcH30HHom HmuHmmo mmHuH>Huo¢ HOHMH mHHm meuH>Hu0< Hoan HHmm mmoHHOmmm 30m

 

 

 

 

 

 

 

mmHuH>Huo¢ wGH3ouuom HmuHmmo paw mmHuH>Huo< Hoan muHm .HHmm

.E 2333.

71

are imposed by the farmer, his advisors and creditors, and
by social and economical conditions around him. Subjective
restrictions, which are imposed by the operator himself,
are also significant to the planning process.1 Subjective
restrictions were used in this model for the borrowing
capital from the Agricultural Bank of Greece. "Transfer
rows are also included to 'provide a vehicle whereby the
services or output of one activity may be transferred in
the model to another activity."'2

The initial resources and the imposed restrictions

are presented in Table 4.2 and discussed below.

Land

Two types of land are considered: the nonirrigated
land with a maximum of 27 stremmas and the irrigated land
with a maximum of 12 stremmas. This was done to permit
various crOpping activities in each land category, due to
the productivity difference among irrigated and nonirri-
gated land. Rented land-irrigated and nonirrigated was
also restricted as it was found in the survey data. In
the initial solution it is not possible to rent more land
if the need arises, but this was permitted in the subse-

quent solutions. Orchards and vegetables land was omitted

 

1R. R. Beneke and R. Winterboer, Linear Programming
Applications to Agriculture. (Ames, Iowa: Iowa State
University Press, 1973), p. 38.

21bid.

72

 

 

Table 4.2. Resource Supplies and Alternatives
Rmv Ekmounxm Ikfits Ehse Almamathms
Ni Iflan
‘ I II III IV

___T__ 1
l Nonirrigated land. Str 21 21 21 21 21
2 Irnumteiland Str 9 9 9 S? 9
3 Rent nonirrigated Str 6 20 6 20 'u
4 Rent irrigated ,Str 3 9 3 9 10
12 wa<xxmrol Ikmd. u3 u u u u
22 Fbushnngrtxnm lkmd u u u u u
23 Hmmfingzfin:stemmkheflkms Ikmd u u u u u
24 Annual family labor Hours 3719 3719 3719 3719 3719
25 Fall family labor Hours 865 865 865 865 865
26 'Winter family labor Hours 797 797 797 797 797
27 Spring family labor Hours 1024 1024 1024 1024 1024
28 Sinner family labor Hours 1033 1033 1033 1033 1033
29 Sell labor Hours 450 450 450 450 450
30 Operating capital Dr2 23189 23189 34784 34784 23189
31 Crops short-terulcredit Dr 7746 7746 11619 11619 7746
32 Livestock short—term crd. Dr 10696 10696 16044 16044 10696
33 Phdhmvlmmgliwanxck

(nedfl: Dr. u u u u u

 

 

 

 

 

 

 

 

10m Stremna (Str) = 0. 24709 acres

230 Drachlms (Dr) = U.S. $1.00
3u= Unrestricted
fiance: Surwardaflr

 

 

because it represents a small percentage (8 percent) of the

total cropland.

An allowance was made, however,

for the

hay or forage produced in the orchards which could be fed

to the livestock.
the land on the survey farms was transferred to produc-

tion grain activities, as it was assumed that the

Cotton and tobacco land, 12 percent of

cropland would be fully utilized for feed grains and forage

73 '

production. Grazing land owned by the community was not
included in the model due to the fact that the animals are
almost entirely confined throughout the year, and cross-
breeding with domestic animals grazing on this category

of land was not desirable.

Labor

An estimate of the available family farm labor available
was also derived from the survey data. Each farmer was
asked to provide information on the composition of his
family, age, occupation for each member, children in school,
retired members, off farm work days, and hired-in workers.
The supply of labor was derived for each family unit in the
sample. This was done to take account of the social norms
that prevail in the area, such as retirement age, women‘s
work, children's work, and days of leisure.3

The total annually available work hours were assumed
equla to 2,480. Thewfigure takes into account Sundays,
local and national holidays and work hours per day accord-

4

ing to seasons. Family labor not engaged in farming is

excluded. Since physical labor productivity for farm work

 

3P. A. Yotopoulos, "Allocative Efficiency in Economic
Development." Center of Planning and Economic Research,
(Athens, Greece, 1967), p. 88.
4A. L. Adamopoulos, "Economic and Social Characteristics
of Farms in the Region of Kozani (Greece)." (University
of Thessaloniki, School of Agriculture and Forestry.
Thessaloniki, Greece, 1963), p. 120.

74

varies according to age, sex and specific task, various
weights were used to convert the family labor in each

cohort into equivalent man units (Table 4.3).

Table 4.3. Weights for Conversion into Equivalent Man Units

 

 

Sex Age

 

o-9.9 10-14.9 15-64.9 65-69.9l Over 70

 

Male 0 .3 1.0 .8 .5
Female 0 .3 .8 .6 .5

 

 

 

 

 

 

1Pensions are paid to farmers by the National Crop and
Social Insurance Agency over 65 years of age.

Source: Adamopoulos, A. L, ibid.

Yotopoulos, P. A., 22- cit.

For high school and college students only the actual
work offered during summer season vacations were used. When
two women were in the family one was used as full time in
farm work. Twenty hours per month were subtracted from
the total farm labor availability in order to cover over-
head labor, e.g. labor related to farming operation but
not a linear function of any of the enterprises considered.
Also 95 hours per stremma and per year were devoted to
orchard and vegetable operations and were subtracted from
the available family labor. Finally the operator's and
his family labor supply were found equal to 3,719 hours
or 1.5 adult male equivalent.

For the purpose of programming restrictions, labor

 

 

Illllll'l‘ll I‘ll'lll‘.l|||l[llllt[[[|l|lll‘ll

75

availability was specified on a season basis. Limit on
selling labor was placed on an annual basis. Labor can
be hired on an hourly basis according to the needs and no

restrictions were placed.

Capital

Capital requirements were classified according to the
source acquired and the use for various enterprises as
follows: (a) operating capital,-(b) short term credit for
crops, (c) short term credit for livestock and (d) medium/
long term credit for livestock.

The demand for operating capital by enterprises was
assumed to be their variable costs per unit of production
and the prices paid per unit of feed purchasing. The
demand for medium/long term credit was assumed to be for
buying cattle replacements and for expanding storage and
livestock housing facilities. The internally generated
capital during the year by selling crop and livestock
products was not used to finance the business but will
appear in the income statement at the end of the year.

The model was solved with and without capital restrictions.
One alternative assumed that the quantity of cash was
limited. The cash restriction was calculated from the
gross output (using survey's data) by subtracting the
annual farm and house operating expenses and adding the
out-of-farm income and subsidies. Another solution was

obtained by Considering a 50 percent cash increase.

 

 

Il.‘|lll‘[n|rlllll|llvl|llllll‘i'[l"- '

76

Short term credit was also examined with and without
restrictions. This appears to be in harmony with the
current policies, since the Agricultural Bank of Greece
indicated that sufficient capital was available for most
livestock enterprises. .In practice the farmers considered
capital rationing and borrow limited amounts of capital.
Usually the amount of credit farmers get from the bank is
approximately 25.2 percent of the gross output.5 This
percentage was used to determine the limit of short term
credit and distribute to crop and livestock enterprises.
Medium/long term credit was assumed without any restriction,
and was secured by the farmer's ability to raise livestock
and also his experience.

The short term loan payments were due at the end of
the year or after the harvesting season. Short term
interest rate for crops was assumed to be 5 percent and for
livestock 4 percent to reflect a special treatment to
livestock enterprises. Medium/long term interest rate was
assumed 4 percent and the payment between 6 and 20 years

according to the purpose of the loan.

Prices
The 1973-74 average prices received by the farmers were

used as a basis for establishing price levels (Table 4.4).

 

5F. Vakakis, "Meaning and Content of Agricultural Sec-
tor Investment Planning." Agricultural Bank of Greece,
Bulletin 191, (March-April, 1973, Athens, Greece). The 1973
percentage was projected by the author using the provided
by the above source time series data.

77

Table 4.4. Output Prices

 

 

 

 

Product Average For
1968-1972 1973-1974

Dr/Kg Dr/Kg
Wheat 2.68 3.60
Barley 2.48 3.40
Corn 2.70 3.40
Alfalfa 1.54 2.40
Milk. 3.20 4.50
Veal _ 46.70 69.50
10-17 mo. calf 42.70 64.30
18-26 mo. calf 37.28 58.80
Cull cow 30.89 41.00

 

 

 

Source: (1) Ministry of Finance, Agricul-
tural Section, "Weight Average
Prices of Agricultural Products"
(Athens, Greece, 1972).

(2) Survey data.

Upward and downward shifts in prices were considered in
order to provide guidelines for adjustments. Prices for
fertilizers and pesticides were those of 1972 adjusted to
1974 levels.

The solutions of the above presented model are the

subject of the next chapter.

 

[If (Ill I'll ll'll‘ ll.'|\l| [I (I [I‘ll {I I! 'l‘

CHAPTER V

OPTIMUM ORGANIZATIONS FOR THE AVERAGE
FARM WITH EXISTING AND CHANGING RESOURCES

The previous chapters have provided the framework for
analysing whether the existing farm organization could be
reorganized in order to increase the level of farm income
and livestock production.-

Livestock production can be increased through large
scale specialized dairy or beef farms or through the small
family farms. Specialized operations have the advantage of
the economies of size, permitting the adoption of new tech-
nology and can influence a small, like the Greek, market in
terms of output supply and input demand and therefore the
prices. The lack of livestock management skills, and the
lack of good quality pasture, and modern technology restrict
the specialized operations. In contrast, it is believed
by some that a small unit in terms of land size and animal
units is an obstacle to expansion. This analysis attempts
to offer some insights as to whether the reorganization of
small farms with more efficient use of resources is a vi-
able alternative to the expansion before the Greek live-
stock industry moves to large specialized operations, and

to new technology.

78

 

 

I‘ll III-I‘ll.l‘l|[ [I l‘llfl [ll

79

Due to changes in economic, technological and govern-
ment policy conditions, farmers have a continuing need for
adjustments, seeking alternative ways to increase or at
least maintain their income. In their plans, farmers
include changes in farm size, change in enterprises, more
efficient utilization of resources, as well as acquisition
of new resources. One general type of adjustment involves
investment and expansion in livestock and feed production
enterprises on existing land area (intensive adjustment).
The other type of adjustment is made by expanding farm size
(extensive) given the existing capital and labor.1 A com-
bination of the above adjustments is also possible, e.g. an
expansion of farm size and acquisition of more capital and
labor inputs together with reorganization of enterprises.

This chapter presents the resulting optimal organiza-
tions of the average farm under (1) existing resources;

(2) varying land and capital; and (3) varying selected
output prices.

Before we present and analyze the optimum.organizations,
certain assumptions, explanations and the order of presen-

tation will follow.

 

1Curtis F. Lard, "Profitable Reorganizations of Repre-
sentative Farms in Lower Michigan and Northeastern Indiana
with Special Emphasis on Feed Grains and Livestock." (Ph.D.
dissertation, Michigan State University, 1963), p. 34.

 

I‘ll III [1' Ill-ll I 1.1,! I II." (III. 'I lilll'll‘lli I I'll. l

80

Assumptions and Presentation Scheme

 

Assumptions
The usefulness of the obtained results depends on the
assumptions made with respect to technology, prices, resources
and institutions influencing the adjustments. The main
assumptions are as follows:

(1) Technology: The study is not an attempt to examine

 

the economic assessments of existing versus advanced techno-
logy. The existing technology is assumed represented here
by the technological coefficients (Chapter IV) which were
found in the area during 1973-74 cropping year. 80, through-
out the analysis the input-output technical coefficients
will remain constant. The difficulty of estimating the
coefficients with certainty led to the range analysis
in order to examine the stability of the plan.

A (2) Prices: The optimum solutions presented in this
chapter are based on 1973-74 average product and input
prices (see Chapter IV, Table 4.4). The sensitivity of the
plan to those prices is also examined using stability analysis.

(3) Farm Resources: The farm resources used are those

 

taken from the survey in Central Macedonia during the 1973-74

cropping year.

(4) Credit: We assume that the Agricultural Bank of
Greece will continue to provide short and long term credit

for the necessary adjustments to qualified farmers.

81

(5) Management: The assumed level of management was

 

that considered necessary for farmers to be able to operate
a multi-enterprise operation.

(6) Finally, it was assumed that part—time farmers
will continue moving to the new jobs developed in the
industrial sector and the remaining idle land will be
rented or sold to farmers remaining in the area giving at
least some farmers the opportunity to increase their farm

size.

Explanations and Presentation Scheme

The first optimum plan, referred to as a base plan,
was determined by using linear programming techniques
assuming existing resource levels. The linear programming
solutions were obtained by using the CDC-6500 computer at
Michigan State University with the APEX-I computing routine.2
Additional plans were computed with capital limited above
existing levels as well as with unlimited credit for com-
parison with the actual (existing) organization. After the
base plan had been established, the effects of changing
farm size, operating capital and the effects of alternative
beef and milk prices upon the base plan were analyzed.

The output of the linear programming provides infor-

mation on the optimum combination of activities included,

 

2Control Data Corporation, "APEX-I Reference Manual."
(Minneapolis, Minnesota, 1974). Initial solutions were
computed by the Linear Programming developed by J. R.
Black, and S. Harsh of Michigan State University.

82

the objective value of the model, the resources used with
their respective Marginal Value Products (MVPs), and the
activities which are not in the solution with their cost

of entering the solution.3 Also information was provided
on the stability limits on prices, costs and basic resources
for the optimum solution. The linear programming solution.
does not take into account costs considered fixed to the
farm, such as depreciation on buildings and machinery, land
investment cost, taxes, etc. The fixed costs must be
subtracted from the total gross margin of the farm to
provide an estimate of net income.

Actual and Optimal Organization with
Existing Resources afideimited Credit

 

 

Comparisons of actual (present) and optimum organiza-
tions resulting from both the assumptions of limited
credit and unlimited credit are presented in Table 5.1.
Considering first the comparion between actual and
optimal with operating capital and short term credit con-
strained to 23,189 Dr. and 18,442 Dr., respectively, we
found that, although the cr0pping program was reorganized and

the cattle-units were increased by 1.3 units,4 there was

 

3The term "shadow price" in use by many authors, will
not be used in this study due to different interpretations
depending on whether we are referring to the real or dis-
posal activities. Instead "cost of forcing nonbasis activi-
ties into the solution" or "unit cost" or "marginal cost"
will be used interchangeably.

4For purposes of comparions, a cattle-unit was defined
for which a dual purpose cow was one unit and a calf exce-
eding 10 months of age was 0.8 units.

83

 

 

 

 

 

 

 

 

 

 

 

 

 

.umunmaoo ”mousom
O.eeH+ O.Oee.eH O.OeH.e m.HN + O.eom.e O.Nme.e e: :HHz eH
O.OmH+ O.m N.H 0.0m + m.H O.H eee: Hes eHO eHeHHe: mH
O.OmH+ O.m N.H O.mN + m.H N.H eee: Ho: OHO ee>Hee HHa: NH
O.OeH+ ee.H O.m m.mN + Hum m eee: eeee HH
O.OOH- -- m.N O.OOH- -- m.N Hem eeeeeea OH
e.eeH+ NH m.e e.eeH+ NH m.e Hem eHHeHHe .O
O.OOH- -- O.m O.OOH- -- O.m Hum .caou .e
O.mON+ e.eN O.m N.HNN H.mN O.m Hum HeHaee .H
e.ee - e.N O.OH H.me - m.H O.OH Hem Heerz .e
Hue-“Hm
OeH+ eHe.OH eeO.H m.NN + OmH.e eeO.H .Ha eHeeuO auee meoH .m
eeN+ oeN.HH NHH.ON -- Nee.eH Nee.eH .HO uHeeHO aaea uuorm .e
-- eeH.mN eeH.MN -- OeH.mN OeH.mN .HO HeeHeeO eaHueHeaO .m
m.Oe + OHH.m Hme.N e.mH - eeN.N ome.N ea: eeeO ueHeH HHHaem .N
e.e + eem.ae mmH.me O.H + Hme.me mHe.ee .HO aHeHez emcee .H
quUHmnH ufimoumm
mwcmno HmSHumo Hmduo< mwcmno HmEHuao Hmsuo<
eHeeaO eeeHeHHa: eHeeHO eeuHaHH “He: aeuH
eHeeHO

vmuHaHHcD paw umuHEHH “mus: mcoHumNHsmeo HmEHumo use Hm5uo< mo acmHngBoo <

.H.n mHnt

84

slight change in total gross margins (from 64,673 Dr.

to 65,931 Dr. or 1.9 percent). Mbre long term credit,

by 22.5 percent, was utilized in the optimum plan than in
the actual plan owing to the need to buy additional live-
stock replacements.

Less family labor by 13.8 percent was used by the
optimum plan, mainly due to the exclusion of thetobacco
activity which is very labor intensive under Greek con-
ditions. Sixty-one percent of the available family labor
was utilized under the optimum plan compared to seventy-one
for the present. Summer labor was a restrictive factor for
the actual plan but the MVP was remarkably below the
opportunity cost of labor. In the optimum plan the labor
was in surplus for all the seasons. In both plans surplus
labor was sold up to the limit (450 hours per year) but
still some labor remained unutilized.

All the available land (39 str) was utilized by both
plans, but the actual plan was more diversified including
tobacco and corn whereas the programmed plan did not. The
new plan calls for more barley and alfalfa production at
the expense of wheat and corn, respectively, which compete
for the same land.

Mbre cattle are fed in the optimum plan than in the
present, and milk production increased by 21.5 percent.
Both plans call for purchasing of replacements. This

conclusion is in accordance with the government's policy

85

to improve the national herd by substituting domestic
heifers with crossbreedings or foreign.

In the optimum solution, barley and alfalfa are
produced in excess of needs and are sold for 3.4 and 2.4
dr. per kg., respectively, while corn is purchased at the
price of 3.5 dr. per kg. Only wheat is an excess in the
actual plan and needed barley, corn, and alfalfa are
purchased (Table 5.2).

Table 5. 2.. Feed Production and Utilization Under Actual and Optimal
Pknm

 

 

 

 

Feed Produced (Kg) Sold (Kg) Purchased (Kg) Unlimited
Credit
Actual Optimum..Actual Optimum. Actual Optimum. Purchased.(KgD
Optflnmn
Wheat 4655 368 4421 --- —-- --- ---
Barley 2080 6630 --- 3690 263 --- ---
Corn 2350 --- --- --- 698 3826 7768
Alfalfa 5400 14400 —-- 2315 4080 --- 12308

 

 

 

 

 

 

 

 

Snare: Cmnnmed

Research on the feeding quality of wheat is underway
to substitute barley and corn for the surplus wheat. The
surplus quantity of barley produced under the optimum plan
can be used at the present time to substitute in the ration
for corn until new hybrid corn varieties will be introduced
and the yield of corn per stremma will increase. With a

production of corn per stremma equal to 600 kg:and by

86

reducing the variable cost to 337 dr. (initial variable

cost 355 dr.) corn enters the optimum solution.

Actual and Optimal Organizations with
Existing Resources and Unlimited Credit

 

 

The unlimited credit category was added to the model
to reflect the Agricultural Bank's policy that credit is
always available to qualified farmers, especially for
livestock expansion. This is an intensive adjustment and
involves investment and expansion in livestock enterprises
on existing land.

As Table 5.1 indicates, the total gross margin for
the optimum plan with the unlimited credit assumption was
increased by 6.8 percent as compared to the actual plan
with the same assumption. Again, as in the limited credit
case, the cropping system in the optimum plan was less
diversified than in the actual plan. Barley is produced
in excess of needs, but total corn and additional alfalfa
have to be purchased (Table 5.2). The number of dual
purpose cows increased by 149 percent, e.g. from 3 cows
in the actual plan to 7.46 in the optimum plan. As Table
5.3 indicates the unlimited credit provision has increased
veal production from 174 kg. in the actual plan to 431 kg.
in the optimum, beef from 250 kg. to 619 kg., cull cow
meat from 117 kg to 289 kg., and milk production from
6,780 kg. to 16,860 kg.

Meat and milk production has increased more than 100

percent in the unlimited credit optimum plan compared with

87

the limited credit optimum plan, indicating the contribu-
tion of capital throughout intensive adjustments, to
increase livestock production.

Table 5.3. Meat and Milk Production in Kg. Carcass Weight
Per Farm.with Limited and Unlimited Credit

 

 

 

 

Item Unlimited Credit Limited Credit
Actual Optimum. Optimum
Veal 174 431 213
Beef 250 619 305
Cull cow meat 117 289 143
Milk 6,780 16,860 8,304

 

 

 

 

Source: Computed

More short term credit, by 284 percent, was utilized
in the optimum plan than in the actual plan owing to the
need to buy additional livestock feed. Family labor was
fully utilized in the optimum plan because of the increased
size of the livestock enterprises.

It is interesting to note that the gross margin in
the unlimited credit optimum solution is slightly improved
from the limited credit optimum solution, e.g. from 65,931
Dr. to 69,589 Dr. (Table 5.1), indicating that unlimited
credit slightly contributes to farm income improvement

under the assumed conditions.

 

 

 

 

It'll-'1' vlllllll' Ill Ill II I II" I ['1‘ II

88

Resource Use and MVP's for the Optimum Base Plansl

The resource requirements for the base plan with
their respective MVP's are shown in Table 5.4..

Labor is not a limited factor as reflected by a
zero MVP for all seasons. Seasonal labor was sold during
summer up to the limit, with an hourly wage rate equal
to its objective value. Land, operating capital and short-
term credit were limiting factors in the optimum organiza-
tion. The high MVP for both irrigated (IL) and nonirrigated
land (NIL) indicates that expansion of the land beyond the
available will be profitable under the given resources,
prices and technology. As shown in Table 5.4, nonirrigated
land has an MVP of 706 Dr. almost three times higher than
its assumed factor cost. Irrigated's land MVP is more than
five times higher than its factor cost. This was expected
as policy makers in Greece realized that one of the restricted
factors for expansion is the small farm size. Alternative
I of the model examines the effects on gross margin and
enterprise combination by expanding irrigated and nonirri—
gated land through renting activities. The other most
limiting resources were operating capital and short term
credit for both crops and livestock. The relatively high
MVP for operating capital and short-term credit--as shown

in Table 5.4--shows the scarcity of these resources which

 

5The Marginal Value Product (MVP) indicates the
amount by which the gross margin of the farm would be
increased by utilizing an additional unit of the resource.

 

 

 

1".l
lull!
.llil'llIl!
lift!»
'1

89

Table 5.4. Resource Use and Marginal Value
Products (MVPs) for the Base

 

 

 

 

Plan

Resources Unit Limited Credit

Resource MVP

Level
NIL Str; 21 706
IL Str 9 2,278
RNIL Str 6 395
RIL ' Str 3 1,760
SLL Hrs 450 26.0
OPC Dr 23,189 .29
CSTCL ' Dr 7,746 .23
LSTCL Dr 10,696 .24
AFL Hrs 2,268 0.0
FL Hrs 427 0.0
WL Hrs 368 0.0
SL Hrs ’ 448 0.0
SUL Hrs 1,024 0.0

 

 

 

 

Source: Computed

impose limitations on expanding livestock production

activities.

Stability Limits for the
Base Plan Resources

 

It is important to the decision maker to know the
limits under which the optimum plan remains stable. With-
out those limits, which are called stability limits, the I
interpretation of the level of resources used, as well as

the conclusions that arose from the MVP's analysis will not

90

be complete. Also the stability or range analysis provides
information regarding the effects of resource variation

upon the optimum farmplans.6

"If the optimum plan appears

to be relatively sensitive to small changes of certain

values, care must be taken in selecting a plan which is

stable over a wide range of values or more frequent adjust-

ments should be made in farm operations."7
Stability limits of the base plan (limited credit),

with respect to resources used, are given in Table 5.5

and discussed below. These limits provide an estimate

of the range over which the MVP's are relevant, and the

optimum.farm organization remains the same even though

the levels of the enterprises may change. For example,

the initial level of irrigated land is 9 stremmas with

lower and upper limits equal to 7 and 10, respectively.

This means that the optimum organization determined in this

analysis remains the same, if other resources remain at

current levels, for farms with 7 to 10 stremmas of irrigated

land and the MVP is relevant under this range. Beyond

the lower level, less than 7 stremmas, the activity "sell

alfalfa (SALF)" will be removed. Since less irrigated

 

6A. K. Nisar and J. G. Elterich, "Changing Input-
Output Relationships and Optimum Organizations of Large-
Scale Dairy Farms on the Delmarva Peninsula." Bulletin 397
(University of Delaware, April, 1973), p. 14.

7A. K. Nisar and J. G. Elterich, "Optimum Organizations
of MediumrSized Dairy Farms on the Delmarva Peninsula."
Bulletin 390, (University of Delaware, March 1972), p. 40.

91

 

 

 

 

 

 

 

 

 

 

 

Table 5.5. Stability Lumits fer the Base Plan Resources (Limited Credit)

Remnnce [hit Inutial Inner Cbmmdngl ummn' Chmmnngl
lxwel level ‘Wmflabhe ibamd \Mmhflfle

NIL Str 21 .17 SUL 22 DPC

IL Str 9 7 SEEP 10 SUL

EMU. Str 6 4 SUL 7 IKE

RD; Str 3 1 EflmF 4 [PC

AFL limes SL268 25223 CSTGL 2L305 ETC

FL Hours ' 428 417 CSTCL 878 SFLA

WL Hours 369 358 CSI‘CL 819 SWIA

SL Iknns 448 Inf IEEA. 898 SSLA

SUL Hours 1,024 574 SSLA 1,052 PRC

OPC Dr 23,189 22,382 UPC 23,810 SUL

(EHCL Dr 1L746 *65897 UPC (L400 SUL

ISTCL , Dr 10, 696 9 , 856 DPC 11, 343 SUL

1This column specifies the names of the activities and/or resources

thatvumdd<immge¢uithelmmult(flfapnhdngznamumaasbeyxxlthe

shflfllitylimdts.
Snare: Counted

stremmas will be available for alfalfa, the produced

alfalfa will be fully utilized by the livestock activities,

so the activity "sell alfalfa" was removed.

However, if

the irrigated land increased beyond the upper limit, the

summer labor availability (SUL) will be decreased and

apparently will become a limiting factor and change the

optimal organization and the MVP for the irrigated land.

The interpretation of the stability limits for the remaining

resources in Table 5.5 is shmilar.

The main conclusion

obtained by the stability analysis for the base plan

resources is that the optimal solution appears to be

relatively stable for the seasonal labor, e.gi Fall labor

92

(FL), Winter Labor (WL), Spring Labor (SL), Summer Labor
(SUL), and relatively unstable for the land and capital
resources, e.g. Non-Irrigated Land (NIL), Operating Capital
(OPC), Short Term Credit for Crops (CSTCL) and Livestock
Short Term Credit (LSTCL).

Enterprises Included in the Optimal Solution

Under the assumed conditions, the enterprise combina-
tion of the model farm in Central Macedonia turned out to
be crOps, mainly for feeding purposes, and dual purpose
cattle and calves. The resulting crop plan includes pro-
duction of wheat (PRWH), production of barley (PRB) and
production of alfalfa (PRA) at the levels of 1.3, 2.57,
and 12.0 stremmas, respectively (Table 5.6). Corn produc-
tion (PRC) was not a sufficiently profitable alternative
under the assumed prices and yields to enter the optimum
solution. The results further demonstrate that corn and
alfalfa compete for irrigated land and the adaption of
corn production would bring about a reduction of alfalfa
production. The surplus of barley and alfalfa were sold
for cash, and the necessary corn for the balanced ration
was purchased. The levels of the livestock activities are
slightly higher than in the actual plan. The dual purpose
cow activity with straw feeding (DPCS) was included in the
optimum plan at a higher level than the same activity
without straw feeding (DPC). The production of relatively

large quantities of straw, may be given as explanation for

the entry of the DPCS activity into the solution.

93

moungaou

."oounom

.moHud waHHHmm

Ho muH>Huom Mom GHmea mmouw mumoHucH mcme on £HH3.mmHuuco use .oUHHm mchmno

nude Ho muH>Huom mo uHa: Hon umoo mHanHm> oumochH mcme o>Humme nuHs moHuudm

H.

 

 

 

 

 

 

 

 

0:: em.m Hoamo eH.m m.e wMHun eOm.e we MHHZm

Om: meH.HN mm:m eHN.eH OOm.mH eee:\uO e.H eee: Hm:m

Om: eee.eH Hem: mOH.O mOH.OH eee:Hua e.H eee: 9mm

Om: HHe.m Hem: OHN.H - OHN - eee:HuO m.H eee: mama

meme mOm - mam: eee - eem - eee:Hun N. eee: om:

mam: ee - meme NHe - eem - eeemHun m.m. eee: memo

zmoom mO.H - Hoamo eO.m - m.m - mxHun eNe.m we zeou:

:He: eH.N meme mN.N e.N eeHuO mHm.N w: HHem

:3e HO.e :3m mN.m e.m eMHen Ode.m we meme

mzoz mcH + Om: HHO.H - e.eee- HumHua O.NH Hum «mm

:3m em - :3m ONm - m.HeN- numHHH H.mN Hum mum

:3m meN - :3: eem - N.Hom- uumeO m.H Hem :zmm
mug-mum
OHDMHHw> HHS-m.H mHDw-mHMHV ”HHS-m.H .HO umOU
waHuouam Hyena: wGHHoHGM HumaoH HMHuHfiH

euHsHH HHHHHeeum Aqu: He>eH Had: .HHH>Hue<

 

 

 

 

 

mumou oHanum> no .mooHHm ou uommmum sues

euHaHH HuHHHeeum hHere eae dOHudHom HeaHedO end dH eeeaHdaH eeHeepHuee

.o.m mHan

94

The raising heifer for replacement activity (RHTE)
was not sufficiently'profitable under current conditions
to enter the solution. Heifers were sold live after feeding
to 16 months. Accordingly, all the replacements were pur-
chased by use of long term credit.This is also consistent'
with the government's policy of encouraging the conversion
of the existing herd to higher_productivity breeds. Bull
calves were raised to 10 months and an average liveweight
of 275 kgs. and through the activity "sell steers at ten
months" (SST) were slaughtered and sold as veal.8 With
the existing prices of feeding stuff and beef prices the
"raise steers to sixteen months," (RSS) activity was not
sufficiently profitable. As it was discussed in Chapter
II, one way to increase beef production with the existing
stock, is to feed the calves to heavier weights. A bull
calf at sixteen months of age with an average liveweight
of 455 Kgs. will produce 60 percent more beef than the 10
months calf. By forcing the 16 months bull calf into the
solution the total gross margin will be reduced by 1,083
Dr/calf, ceteris paribus (Table 5.8). In reality this is

 

what has been happening in Greece as the government provides
2 Dr. per Kg. liveweight to the farmers willing to keep

the bull calves to 450 kg. On the basis of this analysis
the above subsidy has to be increased to 2.5 Dr. per Kg.

liveweight.

 

8The term bull calves and steers are used with the
same meaning. The distinction among veal and beef is accord-
ing to age and liveweight.

95

The costs incurred by decreasing or increasing a
unit of the included activities in the optimum plan, with
their respective stability limits are presented in Table
5.7. These costs may serve as a useful guide to the
farmers about whether to expand in certain enterprises.
The columns "lower level" and "upper level" indicate the
range beyond which the costs will be changed. As the
Table 5.7 indicates the optimal solution appears to be
relatively stable except for the production of alfalfa (PRA)
activity. On the basis of these costs the government could
encourage production of certain crop or livestock products
by changing its subsidy policies. As an example, wheat
compared to barley, is in the most competitive position
for expansion, as reflected by the lower cost incurred if
one additional stremma wheat has to be cultivated. On
the other hand, barley is in the weakest competitive posi-
tion for expansion and in the most competitive position for
contraction. ’

Stabiligy Limits of the Activities

Included in the Optimal solution With
Respect to Prices and vafiable COsts

 

The enterprises included in the Optimum plan could be
reorganized by changing the prices and/or variable costs
per unit of activity. Table 5.6 presents the lower and
upper limits of variable costs and prices beyond which the
optimum plan will change. The significance of‘the analysis

is "to know how much prices, costs, or yields would have to

96

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Table 5.7. Cost Incurred by Decreasing or Increasing a
Unit of Activity in the Optimal Solution and
'Their Stability Limits
Activity Unit Level Cost of Lower Cost of Upper—
_ Decreasing Level Increasing - Limit
(Dr) (Dr) -
PRWH Str 1 . 3 243 . 4 38 16
PRB Str 25.7 38 11 243 27
PRA Str 12.0 '607 11 +Inf 12
SBAR Kg ‘ 3,690 .15 0 .67 4,014
SALF Kg 2,315 .15 1,044 .35 3,096
DPCS Head 3 . 5 55 0 493 3 . 7
DPC Head .2 430 0 55 3.7
BREP Head .61 9,956 .60 2,667 31.0
SMILK Kg 8,304 .73 8,035 1.04 8,502
Source : Computed
- Table 5.8. Cost of Forcing the Non-Basis Activities into the Optinun
Plan and the Stability Limits with Respect to Prices or
Variable Costs
Activity Unit Unit Initial lower Entering Upper Filtering
Cost Cost or Limit Variable Limit Variable
(Dr) Price
PRC 607 Dr/Str -355 . 4 0 DPC 251 . 8 SUL
BALF .83 Dr/Kg - 2.5 0 SUL - 1.66 DPC
BBAR 41.13 Dr/Kg - 3.5 0- SUL - 2.36 DPC
NH 1.03 Dr/Kg - 3.7 0 SUL - 2.66 DPC
83$ 1, 083 Dr/Head 15 , 799 --- --- l6 , 882 R381
RSE 3 , 168 Dr/Head - 465 0 SSE 2 , 703 DPC
RHATE 18 , 699 Dr/Head - 752 0 SUL l7 , 947 BREP
9188 l , 282 Dr/Head 14, 218 0 DUNE 15 , 500 SHSL
SFLA 1.0 Dr/Head 25 .0 0 SUL .26 .FL

 

Somrce: Computed

97

change before the optimum farm organization should be - L

9 Also, the net effects of the changes are listed

change."
under the columns "Entering Variable" in Table 5.6. For
example, the level of the activity ”produce barley" (PRB)
in the optimum plan is 25.7 stremmas with initial variable
cost equal to 281.8 Dr/Stremma. The stability limits for
barley production range between 38 to 320 Dr. This means
that the optimum level of barley production remains stable
unless the variable cost per stremma exceeds the limits. If
the variable cost for barley exceeds 320 Dr. per stremma,
wheat will substitute for barley, so the activity "sell
wheat" (SWH) is the entering variable. If the variable
cost falls less than 38 Dr. per stremma, more barley will
be produced and the activity ”buy wheat” (BWH) is the
entering variable. Since input-output prices have significant
effects upon farm organization, especially when prices are
oriented, their respective stability limits offer a guide
to policy makers on the appropriate direction and size of
the change.

The variable cost of the activity ”produce alfalfa"
(PRA) has to be increased by 130 percent before the competing
activity "produce corn” (PRC) enters the solution. If the
variable cost of the enterprise ”dual purpose cow feeding

straw" (DPCS) increases by 10 percent the activity exits the

 

9Nisar, A. K. and J. G. Elterich, gp. cit.

98

solution, and the ”dual purpose cow without feeding straw"
(DPC) enters the solution. On the other hand, the variable
cost of the activity DPC has to increase by 77 percent
for the activity DPCS to enter the solution. These results
demonstrate the significance of the stability analysis to
give answers to policy questions and the competitive
positions among the enterprises included in the solution.
Due to the production response to price changes, the
farm organization is affected by changing the prices.
Accordingly, the Greek government may discourage the pro-
duction of veal and encourage the beef production through

10

changes in the price ratio of beef to veal. According

to stability limits analysis the price of veal (carcass)

1 for the

has to go down from 69.5 Dr/Kg to 63 Dr/Kg1
activity "raise steers to sixteen months" (RSSI) to enter
the solution. If the existing price of veal increases by
58 percent the solution calls for production of corn (PRC).
If the price of veal remains constant, beef price has to

be increased from 64.3 Dr/Kg (current price) to 68.7 Dr/Kg

before the activity "raise steers to sixteen months" (RSSI)

10The distinction between veal and beef is according
to age and liveweight. Meat production from a calf less
than 10 months and 300 kg. liveweight is defined as veal,
above these limits as beef.

11The prices were calculated from Table 5.6 by dividing
the total receipts by the assumed carcass weight, e.g.

10703 Dr _ . . . 9703 Dr = a
"IEZ’KE‘ — 69.5 Dr/Kg (Initial price, and ’I§Z*E§ 63 Dr/Kb

(lower limit).

99

enters the farm organization. The main conclusion from
this analysis is that the price ratio of beef to veal has
to be close to one, for the farmers to slaughter their
calves to heavier weights.

The need for heifers not to be slaughtered at least
until the first delivery in order to increase the cattle
herd was emphasized in Chapter II. Various policies have
been directed to this target, such as subsidies, grants,
feed price concessions, etc. The activity "sell heifers
sixteen months live" (SHSL) enters the optimum plan. For
the activity "sell heifers sixteen months slaughter" (SHSS)
to be found in the solution, the live heifer price has to
go down by 8.5 percent according to the stability analysis
(Table 5.6). When the demand for live heifers decreases
and the prices fall, the government must provide subsidies
to the farmers to prevent slaughter of the heifers. This
conclusion is consistent with what is and has been taking
place in Greece.

The profitability of employing more capital was also
shown by the stability limits of the activities, "borrow
money for crops" (BMC) and "borrow money for livestock"
(BML). In both cases the maximum interest rate above which
borrowed money is not profitable, is 28 percent, given the
assumed conditions. Short term credit for livestock enter-
prises is borrowed from the Agricultural Bank of Greece
with an interest rate of 4 percent, and yields an MVP

equal to 24 (28~4) indicating the profitability of capital.

100

Enterprises Excluded from.the Optimal Solution

 

Those enterprises or any combination of enterprises
which were least profitable were excluded from the optimum
plan or were at their lower level of zero. The net marginal
cost, e.g. the excess of marginal cost over marginal return,
of an excluded enterprise indicates by how much the total
gross margin would be penalized when they forced into the
farm organization. The cost of forcing the excluded enter—
prises into the optimum plan indicates the competitive
position of these enterprises. The higher the net marginal
cost of an excluded enterprise, the lower is its competitive
position in the optimum plan. Table 5.8 (page 97) presents the
excluded enterprises, their net marginal cost and their
stability limits with respect to prices and variable costs.

Production of corn activity (PRC) was not included and
the cost of forcing one stremma corn in the farm plan is
607 Dr. Due to the large quantities of corn imported
(Appendix B, Table B-3), the government subsidized the
production of corn by providing 200 Dr. per stremma. This
analysis shows that the given subsidy is too small as
compared with the net marginal cost of producing corn
(607 Dr/Stremma). The stability analysis provides another
way for the corn activity to enter the plan, by providing
subsidy of 252 Dr/Stremma (higher than the upper limit)
and the Agricultural Bank to cover the variable costs by

providing fertilizers, pesticides and seeds to the farmers.

 

 

II.
:1 II {In

101

If the yield of corn increases to 600 Kg per stremma and

the variable costs decrease by 18 Dr. per stremma the corn
12

production activity enters the plan.
Alfalfa is profitably produced, therefore the "buy
alfalfa" (BALF) is excluded. If the price of alfalfa is
reduced by 34 percent, the BALF activity enters the plan.
The same interpretation applies to "buy barley" (BBAR)
and "buy wheat" (BWH) activities. The prices for barley,
wheat and corn are the 1973-74 prices. During the same
period the Agricultural Bank supplied barley, wheat and
corn to livestock producers with .50 Dr/Kg lower prices,
e.g., 3.0 Dr/Kg for barley, 3.20 Dr/Kg for wheat and
3.0 Dr/Kg for corn. The stability analysis shows that
either with these prices the farm Optimal organization
remains the same. Accordingly, the lower prices feeding
stuff supplied by the Agricultural Bank do not lead to the
reorganization of the average farm in the direction to
increase livestock production, as it was expected. The
prices have to be decreased to the levels provided by the
upper limit before the "dual purpose cow" (DPC) activity
enters the plan. An improvement to farm gross margin is
expected, so the "subsidies" can be classified to income
improvement (social subsidy) rather than to production

response.

 

12This result was achieved by increasing corn yield
per stremma to 600 Kg. keeping all prices, input-output
coefficients and resources, constant at the initial level.

102

 

Effects of Increasing Land and Capital
, on thengtimum Organization

 

The Optimum base plan was a reorganized plan, using
the existing resources of the average farm. As shown in
previous sections the two most limiting resources were
land and capital. This was demonstrated by the high MVPs
of irrigated (IL) and non-irrigated land (NIL) and the
high MVP for capital. The profitability of land and
capital, as it was indicated by the magnitudes of their
MVPs, calls for expansion of farm size and the use of more
capital. In this section, the effects on farm gross margin
and farm organization of land and capital expansion will
be examined.

Four alternatives were considered as shown in Chapter

IV, Table 4.2. Alternative 1, the opportunity was given to

 

the farmer to increase his initial farm size by 50 percent
by renting additional irrigated and non-irrigated land.
All other resources and input-output coefficients remain

unchanged. Alternative II, a 50 percent increase in opera-

 

ting capital and short term credit was assumed, with other
resources and coefficients as in the base plan. Alterna-
tive III, a simultaneous increase by 50 percent of land,

operating capital and short term credit was assumed, with
no change in labor availability and input-output coefficients.
Alggrggtive IV, no restriction was assumed on the non-

irrigated rented land, and the total irrigated land was

103

increased by 58 percent. All other resources and coeffi-
cients were at the same level as in the base plan. The
results of the analysis are shown in Tables 5.9, 5.10
and 5.11 and discussed below.

Table 5.9. Efficiency Measures for the Base Plan and
Alternatives I-IV

 

 

 

 

 

 

 

‘Item Unit Base1 Alternatives
Plan
I II III IV
Gross Margin Dr 65,931 81,706 68,189 87,387 91,852
Cultivated
Land Str 39 59 39 59 82
Returns per
Stremma ‘ Dr 1,691 1,385 1,748 1,481 1,120
Returns per
Capital Dr 1.58 1.96 1.09 1.39 2.20
Credit Ber -
Stremma Dr 473 313 709 469 225
Unemployed
Labor Hours 1,450 1,947 841 798 2,543

 

 

 

 

1Base Plan is included to facilitate the comparison.
2Short term credit
Source: Computed

Discussion on Efficiency Measures, MVPs, and

Farm Organizations Under Various Levels of

Land and Capital Resources

The increase in the amount of land and capital resulted
in a larger gross margin for all alternatives when compared
to the base plan gross margin. The largest increase, 33

percent, occurred in Alternative IV, and the smallest, 3

percent, in Alternative II. As land increases, ceteris

104

Table 5.10. Resource Marginal value Products Under various Levels of
Lmuiand(2ndtal

 

 

 

 

 

 

 

 

Remmnte Den: Ikmel Almanathme
Phul '

I II III IV
Non-Irrigated.Land Dr/Str 706 691 788 693 487
Irrigated.Land Dr/Str 2,278 2,272 2,757 2,265 1,936
Rauzfixrlrnummed
Land. Dr/Str 395 376 525 383 0.0
Rent Irrigated.Land Dr/Str 1,760 1,748 2,319 1,748 1,124
Anmmfl.Emmly]2mor Itflh: DJ) (10 01) (10 01)
Sunmu'deu' IkVHr (10 0.0 11) 1:0 OJ)
Operating Capital IDr .29 .30 .09 .29 1.03
(kopffinrbflhrm
Credit Dr .23 .24 , .04 .23 .92
Lhmmflm$Lqut
Tenn Credit Dr . 24 . 26 J .05 . 24 ---

 

 

 

lBase Plan is included to facilitate the comparison.

finnce: Counted

paribus, gross returns per stremma decrease, and the MVPs
for all land categories decrease, indicating diminishing
returns to land. Gross returns per unit of capital decline,

as the capital increases, ceteris paribus, and the MVPs for

 

operating capital, and short term credit decrease, again,
illustrating diminishing returns to capital. As the level
of land increases, annual unemployed family labor increases,
e.g. from 1,450 hours in the base plan to 2,543 hours in
Alternative IV. This is explained by the fact that, when
farms are permitted to acquire more land, the levels of
livestock enterprises decrease or move out of the optimal

solution. Accordingly, an expansion of cropping activity

105

 

 

 

 

Table 5.11. Level of Enterprises Included Under Various
Levels of Land and Capital
Enterprise Unit Base1 Alternatives
Plan

I II III IV
Wheat Production Str 1.3 .7 1.9 1.7 0.0
Barley Production Str 25.7 40.3 25.1 39.3 63.0
Corn Production Str .0.0 0.0 0.0 0.0 0.0
Alfalfa Production Str 12.0 18.0 12.0 18.0 19.0
Buy Corn Kg 3,826 1,913 5,483 5,037 0.0
Dual Purpose Cow
Feeding Straw Head 3.5 1.8 2.5 » 4.8 0.0
Dual Purpose Cow
Without Straw Head 2 0.0 2.8 0.0 0.0
Ten Mbnths Steers Head 1.5 .7 2.1 1.9 0.0
Sixteen Months
Steers Head 0.0 0.0 0.0 0.0 0.0
Sixteen Mbnths
Heifers Head 1.5 .7 2.1 1.9 0.0
Replacements Head 6 .3 .9 .8 0.0
Cull Cow Head .6 .3 .9 .8 0.0
Milk Production Kg 8,304 4,153 11,90 10,934 0.0

 

 

 

 

 

 

 

1Base Plan was included to facilitate the comparison.

Source: Computed

levels occur which are labor extensive as compared to cattle
activities. This is an important policy issue, related to

out-migration and urbanization of farmworkers. Also, it is
related to the overall livestock problem, and will be further
examined in the policy implications section. When capital
increases, less family labor is unemployed than in all other
alternatives, mainly due to the increasing level of livestock
enterprises. Summer labor becomes a restricting variable

with an increase in capital availability.

106

The increase of the levels of land and capital also
changed the optimum farm organizations (Table 5.11). The
most significant adjustment was that of removing all the
livestock enterprises when no restriction was assumed on
non-irrigated land. The levels of livestock enterprises
were increased with the increase of capital and eliminated
with land expansion (Alternative IV). This points out the
need for capital by the family farms in order to expand in
the direction of livestock production. The combination of
crop enterprises remains almost the same as in the base plan,
except for higher levels which were expected with larger
levels of resources.

The main effects of increasing land and capital can
be summarized as follows:

(1) As land increases the size of livestock enter-
prises decreases,

(2) As capital increases, the size of livestock
enterprises increaseS.

(3) With an increase by 110 percent of land, the
result is only crops in the farm organization.

(4) Less labor was employed with a landexpansion.

Effects of Varying Milk and Beef Prices
on the Opgimum Plan

 

This section discusses the effects of varying milk and
beef prices on the use of resources and enterprise organiza-
tions. For this analysis, the initial resources, all other

prices, and input-output relationships remain the same as

 

 

ii III-l l. l 1" It

107

those used for the base plan. Parametric linear programming
was used to measure the changes and provide the new enter-
prise organizations. The model uses the information obtained
from the stability analysis, therefore the changing prices are
those outside the stability limits. Specifically milk price
was increased by 25 percent and beef price by 7 percent from
the initial 1973-74 assumed average prices. When milk price
was increased, beef price was held at the base solution level
and vice versa.

Table 5.12 presents a summary of the resulting optimal
solutions (Plan I and Plan II) with the parametrically chang-
ing prices. By changing milk price (Plan I), the gross
margin increased by 14 percent compared to the base solution.
Slightly more annual family labor (AFL) was utilized, but
the summer labor (SUL) was fully exhausted, providing restric-
tion to livestock expansion. The levels of wheat production
(PRWH) and barley production (PRB) remain almost the same
as in the base plan. Production.of corn (PRC) was for the
first time included in the plan. The size of cattle enter-
prises were slightly increased with production higher by 7
percent. The main conclusion of the above analysis, is that
corn can be expected to enter the farm organization with
milk prices assumed to be higher than in the base plan.

The change Of beef price (Plan II) from 64.3 Dr/Kg
to 69.0 Dr/Kg, yielded almost the same gross margin as the

base plan, but lower by 14 percent compared to Plan I. The

108

Table 5.12. Optimum Organization with Variable Milk
Prices, and Variable Beef Prices

 

 

 

 

 

 

 

 

Gross Margin Unit Base1 Plan I Plan II
or Resource Plan Milk Price Beef Price
or Activity 5.6-6.1 69-95.3
Gross Margin Dr 65,931 75,081 66,019
Cropland Str 39 39 39
AFL Hours 2,268 2,381 2,222
SUL Hours 1,02 1,03 1,01
PRWH Str 1.3 1.4 1.6
PRB Str 25.7 25.5 25.4
PRC Str 0.0 1.0 0.0
PRA Str 12.0 11.0 12.0
DPCS Head 3.5 3.3 3.4
DPC Head ,2 ,6 0.0
SST Head 1.4 1.5 0.0
SSS Head 0.0 0.0 1.3
SHSL Head 1.4 1.5 1.3
SHSS Head 0.0 0.0 0.0
SMILK Kg 8,304 8,913 7,667

l

The Base Plan remains stable for milk price 3.7-5.5 Dr/Kg
and beef price 64.3-68.7 Dr/KgJ

Source: Computed

most significant adjustment in Plan II in relation to base
plan and Plan I is that bull calves are raised to sixteen
months and sold with an average liveweight of 455 Kgs. This
implies that, for the farmers to keep the bull calves for
beef and not slaughter them as veal, the price of beef has
to be increased at least 7 percent more than the assumed
prices. The overall effect will be an increase in the
production of beef.

The main objective of this chapter was to determine

Optimum farm organizations with existing and varying

109

resources and prices, which would help farmers to make
adjustments in order to increase their income and live-
stock production. The empirical analysis brought about
important policy issues which will be further discussed
in Chapter VI. Also, Chapter VI will present the summary
of the study, the conclusions, the interpretation of the

.conclusions and suggestions for further research.

CHAPTER VI

SUMMARY, CONCLUSIONS AND POLICY IMPLICATIONS

Summary

Various suggestions have been made as to the type of
operations to increase livestock and feed production in
Greece. They range from support for large scale special-
ized Operations to the encouragement for group farming to
massive aid of small family farms. Suggestions have also
been discussed for the way of achieving the increase, such
as (a) by introducing new technology for the creation of a
new production possibility curve, (b) by reallocating the
existing resources on family farms to increase output from
a given production function, and (c) by adding more
resources to the already limited land and capital, hence,
moving the production possibilities curve outward. In the
overall scheme for achieving higher levels of livestock
production and farm income, and to minimize imports,

government's policies play an active role. Livestock pro-

duction increase has become a national goal and an essential

part of the overall planning. It is very important for
policy makers to know how farmers respond to production
incentives in order to evaluate production patterns and

to know which policies will bring about desirable change.

110

111

With this information, the government will be in a better
position to recommend stable policies which in turn will
reduce uncertainty to farmers resulting in improved long
range farm plans.

This study was designed to assess the potential and
the conditions under which livestock production can be
expanded on small family farms through (1) improved alloca-
tive efficiency and (2) by acquiring additional land and
capital resources. In addition, through price mapping,
it was possible to evaluate present and potential price
policy impacts on livestock production output on individual
farms.

Linear programming techniques were used to determine
the organizations that would maximize farm income under
existing resources, varying land and capital resources,
and under varying milk and beef prices. The objective
function to be maximized in the model was the farm gross
margin. Data concerning the resources, enterprise organi-
zation and technology were accumulated from a survey of
family farms in Central Macedonia, using stratified random
' sampling. Data related to input-output coefficients and
prices had to be assembled and synthesized from the survey,
personal interviews with technical specialists, statistical
bulletins, and research publications related to the studied
area. An average farm was selected for the purpose of
estimating optimum plans, which was assumed to be repre-

sentative of the small family farms in the area.

112

Information and data concerning the growth of the
national and regional cattle herd, government programs
and policies, regional production systems, and productivity
measures were analyzed to provide the linkages from national
and regional levels down to individual farm level. The
model was constructed to include, crop production and
selling activities, livestOck production and selling acti-
vities, land rent and capital borrowing activities, feed
buying activities, and labor selling and hiring activities.
The problem was solved on the CDC-6500 Computer here at
Michigan State University, using the CDC Apex-I routine.
The optimum organizations for the assumed average farm ,
were obtained under; (1) existing resources, (2) varying
land and capital resources, and (3) varying milk and beef
prices.

A summary of the main conclusions drawn from this

study is presented in the next section.

Conclusions

 

The main conclusions from this study are summarized
below. Interpretation of these conclusions will take place
in the next section.

I 1. The average farm studied for Central Macedonia '
was organized to maximize farm income.

2. Allocative efficiency promises only small improve-
ments given the existing level of resources, technology,

and farm prices.

113.

3. The optimum cropping system by including wheat,
barley, and alfalfa was less diversified than the actual
plan which included corn and tobacco as additional
enterprises.

4. Alfalfa for hay is more profitable on irrigated
land than corn for grain. Corn enters the optimum plan
only when a milk price of 5.6 to 6.1 Dr/kg is applied.
Barley and alfalfa were produced in excess of needs in the
optimum plan and corn was totally purchased.

5. The size of livestock enterprises was slightly
increased through the reorganization of existing resources,
and appears to be less dependent on purchased feed than
was the case in the actual plan.

6. .Beef production and replacements raised on the
farm activities did not enter the optimum solution under
the assumed product prices. Beef production activity would
enter, however, if the beef price exceed 69.0 Dr/kg.

7. The programmed results indicated that land and
capital were the most limiting resources. Returns to land
were high in comparison to the assumed rental value of
400 Dr. per stremma. The results also show that further
use of credit on farms similar to the average farm would
be profitable.

.8. At the assumed low level of capital the expansion
of livestock enterprises is limited by capital, while at
the higher level of capital (unlimited credit) the expan-

sion of livestock enterprises is restricted by fall, spring

“0‘4: nu..—

114

9. Since labor resources were not fully utilized, it
would be profitable for the farmer and family members to
work off the farm providing employment opportunities were
available as assumed. The expansion of capital with no
expansion in land generated more livestock production and
less unemployed labor. On the other hand, expansion of
land with no expansion in Capital brought about less live-
stock production and more unemployed labor.

10. Farm enterprises are sensitive to price relation-
ships. As milk prices increase, corn will more likely be
grown. 'As the price of beef increases, farmers feed their
calves to heavier weights.

11. The current level of feed grain subsidies is
insufficient to bring about the changes in livestock pro-

duction desired by the government.

Interpretinggthe Conclusions
Before attempting to draw implications from these

conclusions either for farm management recommendations or
national agricultural policy, some discussion of how these
results are to be interpreted should take place. To start
with, it should be emphasized that the conclusions are
obtained by making particular assumptions in the model and
changes in the set of assumptions may, of course, lead to
different conclusions. Therefore, farmers and policy

makers should not rule out consideration of alternative

115

plans including the actual plan. The stability limit
analysis was used in this study to partially relax the
singlevalue expectation of prices and variable costs
and therefore provide a wider range of applicability
of the conclusions.

The slight difference in total gross margins between
actual and optimum plans indicates that the average farm
had been organized to maximize farm income. Conceivably,
with the inclusion of risk and uncertainty considerations
in the model, even the slight improvement would not be
evident. The optimum farm plan as derived from linear
programming assumed that prices, costs, and yields were
known with certainty. Operating farmers, due to climatic
and institutional conditions and instability of price
policies, do not know these variables with certainty
and therefore must be guided by their expectations.

Another warning to be considered is that the model
does not evaluate the aggregate effects of regional or
national adoption of the conclusions on input-output prices
and resource supplies. Some discussion on the aggregate
effects is attempted inrelation to policy issues.

The optimal farm organization is less diversified
than the actual organization. However, the more diversi-
fied program may be more suitable to some farmers. The
.operator will choose whether he prefers a slightly

‘ higher, but less stable farm income or whether

116

he prefers a lower, but more stable farm income. As the
optimum plan includes fewer enterprises the income variance
increases and the operator has to consider whether he pre-
fers this situation or wants to minimize his income
variance over some period with greater diversification.

To this extent the variability of prices and yields over

a period of years could be'a guide to the farmer. The
Central Macedonia farmer in order to follow the suggested
optimum plan, must consider the higher variation of alfalfa
prices as compared to lower variation of corn prices. To
'what extent the Central Macedonia farmers are risk takers
or risk averters as a means of reducing income variability
is unknown. Suggestions of cr0p and livestock planning
based on optimum plans depend upon the relative prices of
crops and livestock. .If there is a great fluctuation in
relative prices, it will make the farm organization
uncertain.

It should also be recalled that because of the current
government interest in increasing cattle production, the
decision was made in this research to not consider other
livestock enterprises such as sheep, goats, swine or
poultry production. To have done so could have changed
the conclusions from both a farm management and a national
policy point of view. As the problem was defined, however,
such analysis was considered outside the scope of the study.

The focus has been on analyzing the kinds of adjustments

117

at the farm level which would encourage individual farmers
to respond to the market and to national policies in such

a way as to coincide with national goals. In doing so, it
is recognized that some adjustments at the farm level may
have regional or national implications which have not been
handled adequately in the methodology. For example, a
suggestion that farmers substitute alfalfa production at the
expense of corn production would have widespread reverbera-
tions if all farmers followed this advice. Some of the

above conclusions should be discounted with this in mind.

Poligy Implications

 

Given the above mentioned conclusions of the study
and their interpretation, this section will concentrate
on implications in the areas of farm units, and national
agricultural policy.

One conclusion of this study is that the average
farm is allocatively efficient and thus within the context
of existing resources and technology reorganization would
result in an insignificant increase of product and/or
income. It follows that an acceptable way to increase
income and livestock production is to widen resource base
and introduce advanced technology of production. The
rationality of the farmer implies that he is willing
to adopt new technology and respond also to price incentives.
As already noted thekind of resource made available to

the farmer is a major determinant of the type of enterprise

118

commonly undertaken. For example, with more land the
farmers would substitute more cropping enterprises for
livestock enterprises, and when more capital becomes
available livestock production increases until labor
becomes restricted. Thus policy makers must be aware
that some compromise between land and capital resource
availability may be necessary. This approach has some
implications foremployment policy. Livestock enterprises
in the study area were identified to be labor intensive,
whereas crop enterprises tended to be less so. If the
government is considering to support feed grain enterprises,
it must find some means to reallocate the displaced labor.
On the other hand, if the policy is to increase livestock
production, a program that will, through appropriate
incentives, attract more seasonal labor will be desirable.
The crOpping system in the optimum plan was less
diversified than the actual plan. The changes in relative
prices among the competing crops during recent years had
been given as an explanation for the particular crop acti-
vities to be included in the plan. With the elimination
of corn and tobacco from the optimum plan, the available
resources were reallocated to produce some wheat and surplus
of barley and alfalfa. Again farmer's response to price
incentives implies that most likely he will respond to the
initiation of new programs and technology. In order to

reduce the surplus of barley it would be recommended to the

119

farmers to substitute barley for corn in balancing their
feed ration. This also results in reduction of corn
shortages which, in the aggregate implies, savings of
foreign exchange for corn imports. Due to the substitution
of barley for corn in the ration a small loss of digestible
energy and gains in crude protein, crude fiber, phosphorus
and salt will follow. In Greece where the sugar beet
induStry developed during the last years, it is recommended
that the loss of digestible energy can be obtained by
including sugar beet molasses in the ration. In the case
of alfalfa, the country is still in a deficit stage. The
surplus alfalfa obtained in the optimum plan can be trans-
ferred in deficit regions, but the model does not examine
interregional flows to trace the consequences of this
policy. It is also expected, at least for the studied
region, that alfalfa surpluses will bring a reduction in
price, and less alfalfa will be produced. As alfalfa
competes with corn for the irrigated land, a stable price
ratio among those two products is advisable. During last
years alfalfa price increased by 56 percent as compared
to corn, by 26 percent. The 1973-74 price ratio of alfalfa
to corn was .71 and the model solution provides a ratio
of .53 for corn to enter the farm organization and partly
eliminate alfalfa surpluses.

In terms of beef price, it is also recommended that
the price ratio of veal to beef has to be close to one for

beef to be produced. With higher than present beef prices,

 

 

 

l .I III Illull l I I. ll! fl! '1 I ’.

beef production activity enters the farm organization. This
implies that by slaughtering the bull calves in higher
weights and age, more feed is needed during the critical
six months period. It is suggested that a program, related
to on time distribution of feed (special corn) from the
Agricultural Bank to farmers is necessary. Failure to do
so, the target for higher Slaughter weights and therefore
more output from a given stock of calves will not be
achieved. A policy to increase the price of beef calls
also for a stabilization price policy with regard to lamb
and imported frozen meat. Due to the substitution possi-
bilities among beef, lamb, and high quality imported

frozen beef, Greek consumers change their buying habits
easily and as the price of beef increases they would be
expected to shift to lamb or frozen beef consumption re-
sulting in a higher retail price for all close substitutes
for beef.

Another important policy issue is related to.heifer
replacements. The results of the analysis call for pur-
chased replacements instead of those being raised on the
farm, and are according to the government's policy intended
to achieve high quality breeding animals. This implies
that large amounts of capital is needed by the farmers to
purchase replacements and also by the government to import
replacements. The present program to produce the necessary
replacements in government operated units and to distribute

them to the farmers is to be encouraged.

121

Suggestions for Further Research

 

This study was designed to assess the potential for
an increased livestock production and farm income on
small family farms in Central Macedonia by reallocating
the existing resources and by acquiring additional land
and capital resources. Also, the impacts of price policies
on livestock and feed grain production on individual farms
were examined. The contribution which new technology
could make to family farm livestock production and income
was not considered. An extended study using new input-
output coefficients will give a more comprehensive idea
of the potential for increasing livestock production and
farm income on the small family farms in Central Macedonia.
An important aspect in this regard is the risk associated
'with the adoption of new technology. In addition, the
effects of new labor saving technology on family labor
should be evaluated.

The results of this study reflect the average farm
on the plains in Central Macedonia. To have a complete
picture of the livestock-feed problem, similar studies
are required to cover the semi-mountainous and mountainous
areas. The results of such studies will lead to the formu-
lation of livestock and feed grain supply functions at the
regional level. Other regions outside of Central Macedonia
might also be included to provide the basis for formulating,

the national supply function through micro data. By

 

 

I I’ll
1
I

III!
.III

122

including more regions, the regional flows of feed and
livestock products will indicate the comparative advantage
of some regions with respect to calf fattening, the raising
of replacements and feed production activities.

Further research, regional and interregional,
covering sheep, poultry, swine and goat production is
needed to give a comprehensive idea of the potential for
increasing farm income.and livestock production on small
family farms in Greece.

Furthermore, not all problems can be fully resolved
by individual disciplinary research. It is therefore
suggested that interdisciplinary research among animal
husbandry scientists, crop scientists, and economists
needs to be undertaken to improve decisions by individual

farmers and national agricultural policy decisions.

APPENDICES

APPENDIX A

123

.fifisma 0» momau vsma .xnos amz

.wnasmww pad >numonom mnwusaonH\l
.msma nous: .mnonp< .Numa new» .oooono «o H
wpcsooo< Hdcofipaz Hacofimfl>oum :uofiaom paosauo>oo new mcaaqaam mo mnpmfiaaa

 

 

 

 

 

 

.HHH .HO> .mOfiHmempm Odd mua5000< HddOfiHdZ HO xoonhdww waOHHmz UOHHQD
.sm

two .9 .mmma mfiumm .zoaousm quonpzom ca waoanoaw>on Hanspazownw<: mono ”mooudom
w.mH s.HH+ Ham.mma v.0 + omv.vm m.oH+ Hem.sfim mama

m.mH m.m + oom.moa m.o + oom.mm m.m + oom.mmH HsmH

m.mH s.m + oom.mwa w.m + oom.mm s.m + ooo.mmH osmH

«.mH m.oH+ oom.mm~ m.¢ + oom.om v.m + oo¢.sma mmmH

o.mH o.oH+ oom.mmH m.» n ooH.mm m.m + coo.mmH mama

m.HN m.m + oom.mHH s.n + oom.Hm m.m + ooa.¢wa smma

m.HN o.oH+ ooo.soH m.o + oom.mm m.» + oom.mmH mama

m.mm o.m + wa.sm m.N + mHo.mm m.s + www.mma momfl

e.em m.m + mmm.mm m.m + mow.wm m.m + mmo.mHH vmmfl

m.¢m s.s + smo.fim m.s + me.sm w.s + mow.woa mama

m.wm m.m + mms.ms m.s a ewa.nm m.N + owm.ooa mama

m.sm m.m + mmN.Hs v.mm+ HnH.sm w.oH+ www.mm Hmmfl

O.mm w.m_+ vso.mo m.s u me.m~ s.“ + www.mm coma

m.sm o.w + sov.mm o.m + mmo.vm m.v + mom.mm mama

s.sm m.mm+ moo.om n.oHu www.mm m.mH+ www.mm wmmfi

m.vm m.v + www.sw m.mH+ Hmm.mm m.m + mm¢.ms smmfl

m.Nm o.m + omn.m¢ m.o + mmH.mm v.m + Hmm.sm mama

w.vm som.mv Ham.Hm mma.¢m mama

gnu HO & md QOHHWde> mHOpomw GOHHWHHG 0959 QOHHWfiHd> QQU HWGM

\flonupasownm< no mhdnm Hasnn< nonuo HH<. wdnma<> Iasownw< wadnq< Hapoa,

 

MdEfiOdHQ QOHHHHS

.oH39H50Huw< mo madam and umoo nouodh pd ponnoum ofipmoaoo mmono

monHm mama

.HI< wand?

 

124

Table A-2. Gross National Product (GNP) and Gross National
Income (GNI). (Total in Million Drachmas, Per

Capita in Dollars.)
1958 Prices

 

 

 

 

 

 

Gross National Gross National
Year ProductPer Income Per

Total Capita Total Capita
1960 102,913 412 92,167 369
1961 114,379 454 102,026 405
1962 118,588 468 104,659 417
1963 128,042 503 112,587 443
1964 139,852 548 122,529 480
1965 152,113 593 132,913 518
1966~ 162,278 628 140,728 545
1967 172,349 659 148,521 568
1968 185,609 708 158,080 603
1969 202,649 770 172,432 655
1970 219,499 832 187,082 709
19711/ 237,741 895 203,915 768
19721/ 262,055 976 225,425 839
Source: Ministry of Planning and Government Policy, Na-

 

tional Accounts Service,

Accounts of Greece."

l/Provisional Data

 

 

Athens, March 1973.

”Provisional National

 

125

66 9606660» Hmoapmapmpm

.6uma maddenmm .mbma momonu
”moooaw mo moa>nom aaoapmapapm asnoapsz

 

 

 

 

 

 

 

 

.6nma noes: :.ma0paoavaa oaaoaoom sass: "ammo
..m>ma

.maaam .mOapmapapm oammm :.a>ma100ma moauwapapm mouom nonaq: ”nomo ”woousom
6.m m.um 0mma mbmm 0.wm wmmm mmww abma
6.m u.wm msma momm m.wm 0a6m mmbm Obma
>.m 6.06 mmma 6amm N.mm 066m mbuw mmma
0.6 a.m6 a06a mmmm 0.mm 606m a6bw wmma
6.6 m.m6 006a smmm 0.06 mm6m wasw bmma
5.6 w.m6 6mma m6mm 0.06 6amm 6a0m mmma
0.0 b.b6 000a 60mm 6.a6 mmmm ammw mmma
m.m b.m6 awma mbmm m.a6 600m 0amm 6mma
6.m w.am mmba 6mmm m.N6 mmmm 0m6m mmma
5.0 0.60 .a6ma m06m m.N6 6a0m w66w mmma
0.0 n.0m bmma 6m6m m.m6 mmmm mmmm amma
0.0 0.0m bama 0wmm «.m6 aomm bmmw 00ma
a.0 m.0m soma m6mm N.m6 600m mmmw mmma
a.0 m.>m smma mamm m.m6 bmmm mbaw mmma

m & aooo.v a 0 a A 0 a v

9608 aawop. . ooo., aoapaas om coo. ooo.

Imoamamab. assuascan adpoa no $ aapos scandaamom Ham»
9 a o a a o a m a m oouom Honda aduoe

 

 

 

 

 

 

mwudaauwm Hdmwlvaa

pumamoamaonb 0nd paoE>OamEm .moaom gonad .aOapsasnom .mu¢ wands.

 

126

 

 

Table A-4. Imports c.i.f. and exports f.o.b.; Greece, 1957—
1973 Million Drachmas
Year Imports Exports ggligzge Eggoimgoiis
1957 _15,734 6,588 - 9,146 41.9
1958 16,946 6,953 — 9,993 41.0
1959 17,009 6,127 -lO,882 36.0
1960 21,060 6,096. -14,964 28.9
1961 21,422 6,700 -l4,722 31.3
1962 21,037 7,503 -13,534 35.7
1963 24,129 8,703 -15,426 36.1
1964 26,552 9,256 -17,296 34.9
1965 .34,012 9,833 -24,179 28.9
1966 36,685 12,179 -24,506 33.2
1967 35,588 14,856 -20,732 41.7
1968 41,830 14,047 -27,783 33.6
1969 47,824 16,608 -31,216 34.7
1970 58,750 19,276 -39,474 32.8
1971 62,942 19,874 ~43,068 31.6
19721/ 72,212 26,065 -46,151 36.1
1973 120,924 36,915 -84,009 30.5

 

 

 

 

 

 

 

Source: Statistical Yearbook of Greece 1972, National Sta-
tistical Service of Greece, Athens, Greece, 1973,
p. 245.

l/The data for 1972 and 1973 have been taken from Economicos
Tachydromos, (Weekly Economic Bulletin), April 25, 1974.

 

 

 

127

.manmaam>m poz\M
.cmmm
assacs you now: moapaHstu on“ was mamaacs wcdoa up Umxosm xaae moUSaoxm\w
.6bma mamannmm .mnonp<
:.000090 00 xoonamo» asoapmauspm: .oooouo mo woa>nom aaoapmapapm amnoaumz .

.6bma mafia
magma :.mmaauadoo H0980: Qumo Ga macadamm muodvoam Maaz was xaaS: .Qomo.

.6hma masscdh..maawm :.moanpcdoo amass: memo ca mmocaamm #602: .mumo ”wmousom

 

 

606a \Ms.s uwm mm 00a a0 0m mm mea
a06a mam m6m mm mm 60 ma mu abma
wmma mom 5mm ab am an ha mu Obma
mmma .6mm 00m mm mm 06 ma as mmma
mmma ham 65m 06 6m 06 , ma m0 mmma
mmma mmm mum 06 6m 06 5a mm bmma
omaa . ww6 mom mm mm an ma 6m mmma
maaa m66 6mm um ms 56 am a6 mmma
060a m06 mam em >5 mm on mm 60ma
6m0a mmm 00m 6N 65 mm. 0N hm mmma
mmoa mmm 0ma mm 65 06 pa am «mma
. ., pdow
awpoe aaoov was: anpasom nada anon noon aao> snow
\mxaas \mxaas aauOB soups: :

 

 

 

 

 

 

 

 

 

 

 

.maoe oanpms Ucdmsonfi.da QOapodvoum maa: was was: adpoa .mu< wands

128

.avasmomv mpozuonm
nmmnw honpo new Sumac ouea wcammooosm so :Oapnadmnoo padvaa How xaaa maon3\M

.mwx 6.mm maaehou .3 and
.mmx 6.6m saasa .mma n.mm moneys .mma o.mm wmpapm cmuaco “one mama ca
mmaupcsoo umpooamm HOH ado> new moon you monswam coapmadmnoo «panda nom\fl

.6bma hndsqam .mausm :.moaapcsoo amass: nomo ma moondadm paws: .Qomo

.6bma hash
.mandm :.mmahpanov H0980: DOMO ma mmocwadm muoauonm aaa: cad Maaa: .QOWO Hmmoasom

 

 

mmm aw6 am Nma a0 mm mm \Mwbma
mmm 506 am mma 6m mm mu abma
mwm wm6 6b ama mm mm mu ouma
0mm mmm 60 0ma 06 05 an mmma
65m . 60m mm baa 66 00 mm . mmma
mum wmm mm maa b6 6m mm bmma.
mmm mmm >6 maa am 0m 6m . mmma
656 0am mm aaa m6 mm a6 mmma
0N6 amm um um 06 N6 mm 60ma
amm own mm mm 06 w6 bu mmma
mum 0mm mm 6w a6 6m am mmma
Ham»
, ado: pdoo
\anas adpoe unpasom nada anon «mom ado>
coups: muowmpao

 

 

 

 

 

 

 

 

 

.mnoe oanpms madmsona ca nOaHQSSmnoo aaa: and was: aapoa .01< wands

 

.aou .aaE m.ma
.026a6oN .z 066 .aov .aae 6.6a 6aa6uums¢ ”666 mmahpqsoo Umpnomaa amnuO\w

.666666 666 6a66 666aaou .6.6 aoaaaas a.aa mmusaoaaxm

.mmahunsoo
cmomousm unsymmm 60060 omad wondaona osaw> whomsa on» bmma o» mmma 6Oh\m

.6608 quonw How uoaaano and .nwmnw ma Umvnaoqa\m. .

.maadm .mea

 

129

 

 

 

 

 

 

 

 

 

 

-a66a .a66666 .6 666666 :.666666666 a66666a6q6 .mmauanossoo 66 66666: 66660 "666566
6.66 6.66. 6.6a 6.66 6.66 6.6 6.66 6666
6.66 6.66 6.aa 6.66 \66.66 6.6 \ma.6a a66a
6.6a 6.66 6.6 6.66 6.66 6.6 6.6 6666
6.66 6.66 6.6 6.66 6.66 6.6 6.6 666a
6.66 6.66 6.66 6.66 6.66 6.6 6.66 6666
6.66 6.6a 6.6 6.66 . 6.66 6.6 6.66 6666
6.66 6.66 6.6 6.66 6.a6 6.6 6.6a 666a
6.aa 6.6a 6.6 6.6a 6.66 6.6 6.6 666a
6.6a 6.6a 6.6 6.aa 6.66 6.6 6.6 666a
6.6 6.6 16.6 6.6a 6.66 16.6 6.6 666a
\6 \6
6 6 6 a a o 6 .6 .6 a o 6 a a 6.:
.0mm .adpoa 6a>damomaw doauwa< .m adpoe da>6amowaw adwoe
.Sonh Scam Bosh 806m] 660M
86666 666 mafia \a6 6 m a 6a68666 6>66
Amnoama>66 .o.6.H.6,6n 666660 .6.6.6 6666686 666666566 .616 wands

 

APPENDIX B

130

.ondpasoa666 mo unawaaaz may no mmoauwo hudqaampm> adaoaa>onm ”monsom

 

 

 

6m6 mam 60ma aonfimoon .ma
ma6 «mm 6a6a 60986>oz .aa
Nam 00m 0am nonopoo .0a
amm mam amm Honaopmom .m
m60 mmm amm 665656 .6
000 amm mmma hash .6
awn mum 6wma 0:50 .0
666 666 666a .66: .6
666 66a aaoa a666< .6
666 666 666 6666: .6
mmb wwa 666a hnmdnnom .N
aom 66m mmaa 666::60 .a
maxaam wagoam 6anuwaa nunoa

 

 

 

 

.666a .waaaae .666666..666668H 66 666666666=6a6.666660 6anpaos.aum wands

 

 

131

.WFH .Q .PHO .mO .MFQH mowmhm HO vHOOQHdww HdOHPmHPde "QUHH—OW

 

 

 

 

ommm mum 6®a moaN bww aav wmma Mbba bwm mea
mmmm abm mma mmom amt owm amma ®6ma bbm abma
moon aam Oha w6am 5mm mvm owma amma mum Obma
ahhm ma6 m6a mwma 566 Nwm wmma mmba whoa mmma
6Nmm 66m w6a wa6a ab6 Nam wmva woma , wmoa wwma
mama mam mma momm 66> amm mvba omma amoa bmma
wsma mum .mma Nwma mwm 6mm 6mba ONON Nmaa wmma
mmba mvm 66a mmoa mmm mom bvma whom mea mmma
omma mvm 0ma . m66a N6N Ema mama wwom mmma vmma
boma mmw mwa mwaa bow mba 6ama hava whoa mmma
66666 6666 66666 6666 6a666 6666 6666
mw6am>< nonvoum176on¢ mmduo>6 nonconm amuwl wwdhw>¢ nonuoum 6666
zmoo wmam<m B¢mm3

 

 

 

 

.m6maummma 006060 .qaoo .moanam .pwmnk ”Ho amnapomn
\mMV damaw mwdum>¢ 6:6 amnop .nuv acauOSUOHm .ammhapom: .npv 666<.N1m wands

 

.ma6060o 00aaaan= maavsaona poc\m
6066pm 0066:: EO66 6066omea ma anoo 0:6 aa6 pmo8a<\m
0an6a66>6 uoa\w

66666 .6666u6666 .666666 .6 666666
:.060666696 a60666a66<.m0apauoaaou an 00669: .Qomo ”066mm36 MWM
.660 .mo .m6malmmma 000060 60 mxoon660w awoapmapdpm uncapo:UO6m 6om ”0065om

 

 

132

 

 

 

 

 

 

 

 

 

 

 

 

 

 

6.6 6.66 6.6 .6.6 \a.6.6 6666 6666
6.6 6.66 6.66 66 666 6666 6666
.6.6 6.66 6.6 66 666 6666 6666
6.6 6.66 6.66 66 666 6666 6666
6.6 6.6 6.6 66 666 6666 6666
6.6 6.6 6.66 66 666 6666 6666
6.6 6.6 6.66 66 666 6666 6666
6.6 6.6 6.66 66 666 666 6666
6.6 6.6 66.6 66 666 666 6666
6.6 6.6 6.6 66 666 666 6666
666 8666 66666 _ 66666966 6666 66660 66660
16666666 umamMMMIuln \16666 66666. 66666 6666666 6666
6660626 6 2666666666
.6666u6666 ”666666 .6666666 .6.6 .66 66 6.6.6.60

mpuomaH Hanan w66000m 066 .mqop .aa :6 maoho 6060om.mo :Oauosuoum.mum 0anae

APPENDIX c

133

QUESTIONNAIRE

I.LAND AND CROP PRODUCTION
Table C-lLFarm Size and Land Value

Land Classification

Total

Non-irrigated

Irri at,

 

Str.’Va1ue
Dr

Str. 4—Value Str

Dr.

a
Dr

 

4.

(-

Plus Rotated and Strip Land ----- 1

Owned Land
Field crops
Vineyards
Gardens
Orchards
_Alfalfa,
clover ‘
Hay-field

(Dill-00'”

H:

Forest Land
Meadows
Pasture
Other land

L6H¢rm

Land

Total Owned Land
(A+B)

Rented Land
a. Rented
b. Rent out

Rented Land + or -

Suitable for cultiva-

tion Land

a. Owned (1A)

b. Rented (2D)
E. Total (1A+2D)
Cultivated Land
a.
) b. Fallow

F. Cultivated Land

G. Total Cultivated Land

Total Owned Farm Land

Total Owned Non-Farm

Owned and Rented(3E)

---------—--‘

————-I-—---—d

————— fip—-—-—q

----- dD-—-—-qh-——--—-qb-—----db---

L -------- L ------ d.—-—

b-— ------ b —————— db---

P--—----‘-----——d----‘

B ------- d ———————— B-—-

.-------‘.—---—-I-

 

 

 

 

b---.

P---

---—1

—-—-d

h--.»

 

 

 

—--d

134

Table C-2. Crop Production

 

Quantity Your Yield in relation Reasons
Produced to other years was for Yield
Kg Smme Lower Greater Differences

Area

Crops Str

 

 

Wheat
Barley
Oats

Corn (dom)
>> Hybrids

Tobacco
Cotton

Orchard
Alfalfa
Meadows

 

 

 

 

 

 

 

Tab1e~C-3. Crop Production Disposition.

 

 

 

 

Inventory Home Con
Product 801% out ForKSale "for .. .. sumption
g g GrOps Livestock Kg
Kg Kg

1. Main products

a. Wheat

b. Barley

c.

d.

2. By-products
a. Straw
b. Hay
c.
d.

 

 

 

 

 

 

 

135

 

 

”6.6...- -_.-

A<BOB

mfiHsm
060060
060%
-666
0300

maaam
060060
060%
Iwmm
0300

66666
060060
0606
-666
0300

.—

:

0060600

00>06086

06600500

.666660

000666600 A8

.66
2

An

09-4

O'U

A
A
A
A
A
A
A
A
A

(8.0

 

 

U060

 

006608
150000
0800

 

.0660

 

.msm

 

660m

MD
0:66>

66608 ..02

 

 

00M

 

66
66666

 

HQ
6600 60m

0:66>

 

"06 050 0060630

. 660» 6066

nl

 

ZOHBUDDOmm Dz< MMOBZW>ZH

6666 6666
6666666666 666666

”MUOBmm>HA

 

.02

.HH

 

666666

.¢I0. wande

136

 

63666.

 

‘

 

 

 

 

000006
06603
A.666 .666666 A66660 666: 66
.0060 600600>66 .6066000060.Qo60v 66m0E 6606 0:66> ”mm: .02 Amawwuv
“606 0000 0:66> 66609, 6 6B

 

 

 

 

 

06606606606086 0666.6 6.0 0,606.6.

 

66666

 

0066060
060660
0660
00:00

 

a. . . A66660 666: 66 666:
“8066 006: 066 0666800 6600? 6606 0da6> 660 .oz. A080660.
. 66666 66666 6 6666

 

 

 

 

 

 

 

 

666666666 666.6 .66 . 6666.6.

BZMSAHDOm QZ<VVmMZHm0<2 sm<m .mfizmam>0mmiH QZ<A .mOZHQAHDm =m¢h .HHH

137

 

oq

m 000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

0 000
000000
608660

0008606080 00000 060060 0660
6 0600 060080:

06606 6008606080 0860 006 60
06 0>6A 006666: 600000 6606 666160
00666000800 666860 8660 .010 06069
6202604030 020 6q6200 £000 .>H
. . . .0
. . . .N
. . . .6
920306000
. . . .6
. . . .0
0060800 .N
6060669 .6
600260002
. 6,6. ‘ 66
A606666 . 6666 66
6606 60 00660 6 0066>
. 660000 - 6009 6660606 I 60 .0 00
_ MGHWdDOHH—nfi sz3wz mfiHdgl HGWWHWH 2 PH.
6

600806000 006 660060062 8660 .6|0 0606B

APPENDIX D

138

Table D-l- Estimated Annual Budget for One Stremma of Crop
Production Enterprises6/

 

A1 - Wheat Budget

 

 

 

Item Quantity PriceZ/ Value
(kg) (Dr/kg) or Cost
- (Dr)
Gross Income
Wheata/ 245 3.60 882
Straw— ‘ 220 .75 165
Total 1047

Variable Costs

Seed, Fertilizers, 154.2

Pesticides /
Machinery Cost— 146.9
Total 301.1

 

Labor (HoursLStr)

 

Fall 1.31
Winter .51
Spring .62
Summer 1.64
Total 4.08

 

Footnotes appear at the end of Table.

139

Table er- Continued

A2 - BARLEY BUDGET

 

 

 

 

ITEM Quantity Priceg/ Value
(kg) (Dr/kg) or Cost
(Dr)

Gross Income ,

Barleg 260 3.40 884

Straw—l 234 .75 175

Total 1059
4/

Variable Costs—

Seed, Fertilizers,

Pesticides / 136.9
Machinery Cost—' 144.9
Total 281.8

Labor (Hours/Str)

Fall 1.0
Winter .7
Spring .5
Summer 1.5
Total 3.7

 

Footnotes appear at the end of Table.

140

Table D-l Continued

 

A3 — CORN BUDGET

 

 

 

 

Item Quantity Priceg/ Value
(kg) (Dr/kg) or Cost
(Dr)

Gross Income
Corn-grain - 470 3.40 1598
Variable Costsé/
Seed, Fertilizers,

Pesticides 5/ 96.6
Machinery Cost-' 258.8
Total 355.4

Labor (Hours/Str)

Fall 11.8
Winter . .5
Spring 7.0
Summer 14.5
Total' 33.8

 

Footnotes appear at the end of Table.

141

Table D-l Continued

 

A4 - ALFALFA BUDGET

 

 

 

 

 

Item Quantity Priceg/ Value
(kg) (Dr/kg) or Cost
(Dr)
Gross Income
Alfalfa (hay) 1200 2.4 2880
Variable Costsé/
Seed, Fertilizers,

Pesticides / 98.6
Machinery Costs— 366.0
Total 464.6

Labor(Hours/Str)
Fall 4.6
Winter 1.6
Spring 6.2
Summer 13.5
Total 25.9

 

Footnotes appear at the end of Table.

142

Footnotes for Table D-l.

l/Estimates are developed from the following sources: a)
Kitsopanidis, G. J., et a1., "The Economics of Wheat,
Barley, Maize, Lucerne Production.” Four Bulletins.
Department of Agricultural Economics Research, Thessalo-
niki, Greece, 1972; b) Tselepis, N., "Production Cost of
Crop and Livestock Products." Athens, Greece 1968 (in
Greek); 0) Personal Communication with Mr. S. Lazaridis,
Agricultural Specialist, Agricultural Bank of Greece; d)
Survey data. '

2/
The 1973-74 price levels.

E/Actual selected straw

2/Variab1e cost prices were adjusted for the 1973—74 period.
When both home grown and purchased seed were used, the
price of seed was assumed lower than the market..

élIncludes costs of oil, lubrication, fuel and repairs for
small machinery power. It was assumed that cultivating,
harvesting, and baling were done on a custom basis.

143

Table D-2

EXPLANATION OF ABBREVIATIONS USED IN THE MATRIX

1. Resources (Rows)

 

 

Row N0.’ Abbreviation Complete Heading

1 NIL Non Irrigated Land

2 IL Irrigated Land

3 RNIL Rent Non Irrigated Land
4 RIL Rent Irrigated Land
5 WH Wheat account

6 STR Straw account

7 BAR Barley account

8 COR Corn account

9 ALF Alfalfa account

10 BR Bran account

11 CC Cotton cake account
12 COW Cow Control account
13 so Steer Calvesl/

l4 HC Heifer Calves

15 810 Steers 10 monthsl/
16 816 Steers 16 monthsl/
17 $18 Steers 18 monthsl/
18 H16 Heifers 16 months

19 HREP Heifers Replacements
20 CULL Cull Cow
21 MILC Milk account
22 HFC Housing For Cows
23 HFSH Housing For Steers-Heifers
24 AFL Annual Family Labor
25 FL Fall Family'Labor
26 WL Winter Family Labor
27 SL Spring Family Labor
28 SUL ‘Summer Family Labor

 

Footnotes appear at the end of Table.

‘

Table D-2 continued

144

 

 

 

 

Row No. Abbreviation Complete Heading
29 SLL Sell Labor Limit
30 OPC Operating Capital
31 CSTCL Crops Short Term Credit Limit
32 LSTCL Livestock Short Term Credit Limit
33 MLLC Medium-Long Livestock Credit
2. Activities (columns)
Column
No, Abbreviation Complete Heading
1 PRWH Produce Wheat
2 . PRB Produce Barley
3 PRC Produce Corn for Grain
4 PRA Produce Alfalfa
5 RLNI Rent Land Non Irrigated
6 RLI Rent Land Irrigated
7 SSTR Sell Straw
8 SWH Sell Wheat
9 SBAR Sell Barley
10 SCORN Sell Corn
11 SALF Sell Alfalfa
12 BCORN Buy Corn
13 BBAR Buy Barley
14 BALF Buy Alfalfa
l5 BBR Buy Bran
16 BSTR Buy Straw
17 BWH Buy Wheat
18 BCC Buy Cotton Cake
19 DPCS Dual Purpose Cow Feeding Straw
20 DPC Dual Purpose Cow Without Straw
21 RSTE Raise Steers Ten Monthsl/
22 R881 Raise Steers Sixteen Monthsl/
23. RSE Raise Steers Eighteen Monthsl/

 

Footnotes appear at the end of Table.

Table D~2 continued

2. ActiVities

 

145

 

Column
No. Abbreviation Complete Headings
24 SST Sell Steers Ten Monthsl/
25 SSE Se11 Steers Eighteen Monthsl/
27 RHAS Raise Heifers at Sixteen Months
28 RHATE Raise Heifers at Twenty-Eight Months
29 SHSL Se11 Heivers Sixteen Months Live
30 SHSS Se11 Heifers Sixteen Months Slaught.
*31 BREP Buy Replacements
32 SCCO Sell Cull Cow
33 SMILK Se11 Milk
34 SFLA Se11 Fall Labor
35 SWLA Se11 Winter Labor
36 SSLA Se11 Spring Labor
37 SSUL Se11 Summer Labor
38 HFLA Hire Fall Labor
39 HWLA Hire Winter Labor
40 HSLA Hire Spring Labor
41 HSUL Hire Summer Labor
42 BMC Borrow Money for Crops
43 BML Borrow Money for Livestock
44 BMBL Borrow Money for Livestock Build,

 

and Replacements

l/Since the proportion of male calves, which is castrated
the terms steer and bull calf have been used

is unknown,

interchangeably..

I... lull] l AIIIIIIIIIIIIII] I. II I I‘ll" l l

146

Table D93.Estimated Gross Income and Variable Costs
For Livestock Production Activitiesl

 

(1). Ten (10) Months Calf
Value or Cost

 

Item

 

 

 

 

(Dr)

Gross Income
Sale of calfgl ’ 10703
Variable Costs
Veterinary and medicine 90
Electricity, water 20
Buildings and equipment

repairs (1%0§/ 35
Vitamins, Minerals 50
Feed grinding4/ 52
Miscellaneo s§/ 23
Death 10ss§ --
Total Variable Costs 270
Feed
Whole milk and milk

subs itutez/ 60/days x 5 kg/day 300 kg
A1fa1fa§ 9/ 270 days x 3 kg/day 810 kg
Concentrates— 240 days x 3 kg/day 720 kg
Bedding‘
Straw . 300 kg
Labor (Hours)
Fall Winter Spring Summer Total
22.5 15 15 22.5 75

 

Footnotes appear at the end of Table.

147

Table D-3~ Continued

 

(2). Sixteen (16) Months Calf

Value or Cost
Item (Dr)

 

Gross Income
‘Sale of cale/ 15799

 

Variable Costs

 

 

Veterinary and medicine 110
Electricity, water 32
Buildings and quipment
repairs (1%). 47
Vitamins, Minerals 70
Feed grindingé/ 104
Miscellanegysé/ 47
Death loss. —-
Total Variable Costs 410
Feed
Whole milk and milk 60 days x 5 kg/day 300 kg
subs ituteZ/
Alfalfa§ / 450 days x 4.2 kg/day 1890 kg
Concentrates— 420 days x 3.43 kg/day 1440 kg
Bedding
Straw 480 kg
Labor (Hours)
Fall Winter Spring Summer Total
22.5 22.5 37.5 37.5 120

 

Footnotes appear at the end of Table.

148

Table D-3- Continued

 

(3) Eighteen (18) Months Calf
Value or Cost

 

 

 

 

Item (Dr)
Gross Income
Sale of calfg/ 15876
Variable Costs
Veterinary and medicine 115
Electricity, water ' 36
Buildings and equipment
repairs (1%)§/ 52
Vitamins, minerals 8O
Feed grindingé/ 125
MiscellaneaysQ/ 57
Death loss. --
Total Variable Costs 465
Feed
Whole milk and milk
substituteZ/ 60 days x 5 kg/day 300 kg
Alfalfa§/ 9/ 510 days x 4.41 kg/day 2250 kg
Concentrates— 480 days x 3.62 kg/day 1740 kg
Bedding
Straw ~ 540 kg
Lab0r(Hours)
Fall Winter Spring Summer Total

30 22.5 37.5 45 135

 

Footnotes appear at the end of Table.

Table D-3— Continued

149

 

(4) Heifer Raisingvfor Replacement

Item

Value or Cost

 

 

 

 

(Dr)

Gross Income
Sale after first calfg/ 18000
Variable Costs
Veterinary, medicine 196
Breeding fee 60
Electricity, water 56
Buildings and equipment

repairs (1%)§/ 82
Vitamins, minerals 140
Feed grindingé/ 158
Miscellaneo $5 60
Death loss§ —-
Total Variable Costs 752
Feed
Whole milk and milk

sub§7itute1/ 300 kg
Alfalfa. / 2997 kg
Concentrates— 2112 kg
Bedding'
Straw 840 kg
Labor (Hours)
Fall Winter Spring Summer Total
52.5 45 60 67 224.5

 

Footnotes appear at the end of Table.

150

Footnotes for Table D-3

 

l/Estimates are developed upon the following sources:

(a) Dailey, R. T., et a1. "Agricultural Planning Data
for the Northeastern United States." The Pennsyl—
vania State University Press, University Park, A.E.
and R.S., 51, July 1965.

(b) Tselepis, N. op. cit.

(c) Koutoglidis, H., "Economic Results of Cattle Fatten-
ing in a Small Farm." Hellenic Economic Review,
Vol. 10, Thessaloniki, July 1974.

(d) Unpublished farm records kept by Farm Management
personnel at the University of Thessaloniki, Depart-
ment of Agricultural Economics.

(e) Emmanouilidis, P., Livestock Specialist. Personal
communication.

(f) Survey data.

g/Based on .56, .54, .53 carcass weight for calves 10‘
months, 16 months, 18 months respectively. For heifers
ten (10) percent lower gain than bull calves was assumed.
The sale value for replacement heifer, after the delivery
of first calf, includes also Dr. 2000 as subsidy.

AélBased on Dr 3490 necessary buildings and equipment per
calf per year.

‘3/Based on 3 percent grinding fee.

(é/Includes livestock insurance, travel expenses, etc.
é/Internally generated in the model.

'Z/Colostrum is provided during the first days.

1§/Dry alfalfa or other forages, and small quantities of
green alfalfa or green chops.

'g/Various rations are provided. The most common includes:
Barley 40%, Corn 30%, Wheat 10%, Bran 20%, 9; Corn 30%,
Barley 30%, Wheat 10%, Bran 10%, Cotton Cake 10%, and
high protein meals.

151

Table D-4.Estimated Gross Income and Variable Costs for
a Cow —- Cow Weighs 540 kgs and Produces 2500

 

 

 

 

 

 

kgs milk.—
Value
. Amount Price or
Item Unit (kg) Dr Cost
(Dr)
Gross Income
Milk2 2/ Kg 2500 4. 5 11250
Calf— 3/ 'Head .75 4000 p 3000
Cull cow— Kg 40. 33 41.0 1654
Total _ 15904
Variable Costs
Veterinary and medicine 160
Breeding fee 60
Electricity and water 25
Vitamins, Minerals / 60
Death loss (4 percent)— ~
Buildings and equipment
repairs. / 74
Feed grinding— 113
Miscellaneous 66
Total Variable Costs 558
Feed
Concengrates—/ 1565 kg
Forage— 2190 kg
Straw 1095 kg
Bedding
Straw 365 kg
Labor (Hours)
Fall Winter Spring Summer ' Total
76 75 77 77 305

 

Footnotes appear at the end of Table.

 

lulll l..i li.ll 1'1 | I]. ll

152

Footnotes for Table D-4
_1./

 

Estimates are developed upon the following sources:

(a) Kitsopanidis, G. "The Economics of Milk Produc-
tion in Central Macedonia, Greece." Reprint
from The Agricultural Economics Review, Vol. VI,

No. l, Thessaloniki, 1970.

 

(b) Recommendations of the Central Union of Livestock
Cooperatives of Greece during the 2nd Panhellenic
Livestock Seminar, April 1972a

 

(c) Tselepis, N. op. cit.

(d) Lazaridis, 8., Extension Specialist, Agricultural
Bank of Greece. Personal Interview.

(e) Emmanouilidis, P. op. cit.

(f) Survey data.

g/Based on 80 percent calving rate and 6 percent mortality
rate.

~§lBased on 16.6 percent culling rate.
‘é/Internally included in the model.

E/Based on Dr. 7385 per cow investment for buildings and
equipment. -

(ngased on 3 percent grinding fee.

1/365 kg. for maintenance and 1200 kg for production, based
on grain, milk ratio 1:2.5.

filMainly dry alfalfa or vetch. During late Spring or
Summer, cattle are fed cut alfalfa or are permitted
to graze. - . ‘

I) .lil Ill- llllsl I‘ll-l All I ll i 1' All: i 1' II: [I]!!! 1|;
. .
I .

B IBLIOGRAPHY

BIBLIOGRAPHY

Adamopoulos, A. "Farm Land as a Basic Criterion of Sampling

in Agricultural Economics and Social Regional Surveys.’
Thessaloniki, 1960.

"Application of Linear Programming in Organizing
New Farms: A S ecial Case in the Department of
Pieria (Greece)fl Agricultural Economic Review, Vol.
1, No. 2, Thessaloniki, (July, 1965).

 

Adamopoulos, A. L. "Economic and Social Characteristics
of Farms in the Region of Kozani (Greece)." Univer-
sity of Thessaloniki, School of Agriculture and
Forestry, Thessaloniki (1963).

and Papageorgiou, E. "Farm.Management Research
and Planning in Northern Greece.” Thessaloniki,
1963. _

Andersen, J. C. and Heady, E. O. "Normative Supply Func—
tions and Optimum.Farm Plans for Northeastern Iowa,"
Research Bulletin 537, Ames, Iowa: Iowa State
university, 1965.

Atta-Konadu, Y. K. "Economic Optima in Resource Allocation
for Smallholder Subsistence Farming in Ghana."
{3.2. dissertation, Michigan State University,
7 .

Beneke, R. R. and Winterboer, R. Linear Programming
Applications to Agriculture. 'Ames, Iowa: Iowa
State University Press, 1973.

 

Bockenhoff, E. and Wernberg, N. "Marketing of Livestock
and Meat: Report to the Government of Greece,"
FAO Publication, (Rome 1967).

, et a1. -"Sh0rt-Term Forecasting of Livestock
Numbers and Livestock Production in the Federal
Republic of Germany, Denmark, the Netherlands and
the United Kingdomm" Institut fur Landwirtschaftliche
Marktlehre, Stuttgart, 1970.

153

154

Bradford, L. A. and Johnson, G. L. Farm Management Analysis.
New York: John Wiley and Sons, 1960.

Cochrane, W. G. Sampling Techniques. 2nd Edition, New
York: John Wiley and Sons, Inc:, 1963.

 

Colyer, D. and Irwin, G. "Beef, Pork and Feed Grains in
The Corn-Belt: Supply Response and Resource Adjust-
ments." North Central Regional Research Publication

Columbia, Missouri, 1967.

Connor, L. J. and Vincent, W. H. "A Framework for Develop-
ing Computerized Farm Management Information,
Canadian Journal of Agricultural Economics, Vol.18,
No.1,1970.

Control Data Corporation. APEX-I Reference Manual.
Minneapolis, Minnesota, 1974.

Dailey,R. T., et a1. Agricultural Planning Data for the
Northeastern United States. University Park:
PEnnsylvania_State University Press, July 1965.

 

 

Desai, D. K. "Increasing Income and Production in Indian
Farming," The Indian Society of Agricultural Economics,
Bombay, 1963.

Dodson, J. D., Pasour, E. C. and Wells, R. C. "An Economic
Adjustment Study of Dairy Farms in Western North -
Carolina, " FIR—22, North Carolina State University,
1971.

 

Economicos Tachydromos (Weekly Economic Bulletin) (Septem-
gber, 1972 to April 1974). ,

FAO/IBRD, "Livestock Identification Mission in Greece,"
August 1971.

FAO. "European Breeds of Cattle," Vol II (Rome, 1966).

Ferguson, D. S. "The Nigerian Beef Industry," Cornell
International Agricultural Development Bulletin,
No. 9, Cornell University, Ithaca, New York, 1967.

Ferris, J., Sorenson, V. , et al. '"The Impact on U. S.
Agricultural Trade of the Accession of the United
Kingdom, Ireland, Denmark and Norway to the European
Economic Community," Michigan State University, 1971.

Fielder, L. L and Londhe, S. R. "Farm Planning Guides for
Small Farms," Louisiana State University, D.A.E.
Research Report No. 350, January, 1966.

155

Heady, E. 0., et. a1., Agricultural Supply Functions
Estimating Techniques and Interpretations. Ames,
I0wa: Iowa State University Press, 19617

 

 

and Gibbons, J. R. "Cost Economies in Cattle
Feeding and Combinations for Maximization of Profit
and Stability," Research Bulletin 562, Iowa State
University, (July 1968).

. Economics of Agricultural Production and .
Resource Use. Englewood Cliffs, N.J.: Prentice- F‘

 

a 1

and Candler, W. Linear Programming Methods. 3
Ames, Iowa: Iowa State University Press, 1973.

 

Hildreth, C. and Jarrett, F. G. A Statistical Study of
Livestock Production and Marketing. New York:
John Wiley and Sons, Inc., 1955.

 

 

Huang, D. S. Introduction to the Use of Mathematics in
Economic Analysis. New—York: John Wiley and Sons,
Ific., 1966.

 

Hutchison, J. E. Urban, F. S. and Dunmore, J. C.
"Argentina: Growth Potential of the Grain and
Livestock Sectors." USDA, Foreign Agricultural
Economic Report, No. 78, Washington, D.C., 1972.

Johnson, G. L. "Supply Function--Some Facts and Notions,"
In Agricultural Adjustment Problems in a Growing
Economy. ‘Editedey E. O. Heady, et a1. Ames, Iowa:
Iowa State University Press, 1958.

. "Agricultural Economics, Production Economics
and the Field of Farm Management," Journal of Farm
Economics, Vol. XXXIX, No. 2, (May I957).

 

, et a1. Korean Agricultural Sector Analysis and
Recommended Development Strategies, 1971-1985.
Department of Agricultural Economics, Michigan
State University, 1972.

Kerr, T. C. "Determinants of Regional Livestock Supply
in Canada," Agricultural Economics Research
Council of Canada, July 1968.

Kitsopanidis, G. J. "The Economics of Milk Production in
.Central Macedonia, Greece," Reprint from the
Agricultural Economic Review, Vol. VI, No. 1,
Thessaloniki, 1970.

156

, et al. "The Economics of Wheat, Barley, Maize,
Lucerne and Tobacco Production." Five Bulletins,
Department of Agricultural Economics Research,
Thessaloniki, 1972.

. "Types of Farming in Central Macedonia, Greece;
A Comparative Economic Analysis," Agricultural
Eggnomic Review, Vol. VIII, No. 1, Thessaloniki,

2.

Knight, F. H. Risk, Uncertainty and Profit. Chicago:
University of Chicago—Press, 197i}

 

 

 

Kottke, M. W. "A Short-Cut Approach to the Use of Linear
Programming for Solving On—The-Farm Problems,"
Research Report 26, University of Connecticut,
(December 1967).

Kohout, J. "A Price and Allocation Decision Model for the
Beef Economy in Argentina." Ph.D. dissertation,
University of Illinois, 1969.

Krenz, R. D. Heady, E. O. and Baumann, R. V. "Profit-
Maximizing Plans and Static Supply Schedules for
Fluid Milk in the Des Moines Milkshed," Research
Bulletin 486, Iowa State University, (October 1960).

Koutoglidis, H. "Economic Results of Cattle Fattening in
a Small Farm," Hellenic Economic Review, Vol. 10,
Thessaloniki, (July, 1974?} '

Kutish, F. and Sitler, H. "A Study of the Economics of
Land Use and Livestock Production in Greece," USDA,
(June 1967).

Ladd, G. and Easley, E. An Application of Linear Programming
_tp the Study of Supply Responses in Daigying. Ames,
Iowa: Iowa State Universify Press, 1959.

Lard, C. F. "Profitable Organization of Representative
Farms in Lower Michigan and Northeastern Indiana
with Special Emphasis on Feed Grains and Livestock."
Ph.D. dissertation, Michigan State Univeristy, 1963.

Lee, Y. C. "Adjustment in the Utilization of Agricultural
Land in South Central Michigan with Special Emphasis
on Cash-Grain Farms." Ph.D. dissertation, Michigan
State University, 1975. ' -

 

Llewellyn, R. W. Linear Prpgramming. New York: Holt,
Rinehart and—Winston, Inc., 1964.

157

Lopes, J. "Greece to Triple'73-74 Grain Imports," USDA,
Foreign Agriculture, (October 1973).

Menzie, E. L., Hanekamp, W. J. and Phillips, G. W. "The
Economics of the Cattle Feeding Industry in Arizona,"
University of Arizona, Technical Bulletin 207, 1973.

Miller, T. and Heady, E. 0. Analysis of Aggregation Error
in Supply Functions Based on Farm-Programming Models.
Ames, Iowa: Iowa State University Press, 1973. ‘

Ministry of Coordination. "Economic Development Plan for
Greece, 1968-1972," Athens, Greece, 1968.

Ministry of Planning and Government Policy. "Provisional
National Accounts of Greece." Athens, March 1973.

Missiaen, E. and Coffing, A. L. "Canada: Growth Potential

of the Grain and Livestock Sectors." USDA, Foreign
Agricultural Economic Report No. 77, Washington,
D.C., 1972.

Myrick, D. and Witucki, L. "How Greece Developed Its
Agriculture, 1947-67," USDA, Foreign Agricuhtural
Economic Report No. 67, February 1971.

National Statistical Service of Greece. Statistical
Yearbook of Greecengears 1962 to 1973. Athens.

 

. ._ . Agricultural Statistics of Greece, Yearsfil962
to 1971. Athens.

Nisar, A. K. and Elterich, J. G. "Optimum Organizations
of Medium-Sized Dairy Farms on the Delmarva Peninsula." -
university of Delaware, Bulletin 390, Newark,(March 1972).

"Changing Input-Output Relationships and Optimum
Organizations of Large-Scale Dairy Farms on the Delmarva
Peninsula," University of Delaware, Bulletin 397,
Newark, (April 1973).

OECD. Labor Force Statistics, 1960-1971. Basic Statistics,
Paris, 1973.

. "Capital and Finance in Agriculturef'Agricultural
Policy Reports, Vol. II, Paris, 1970.

. Trade b Commodities, Analytical Abstracts.
Series B, 1961-I972, Paris.

Meat Balances in OECD Member Countries. Paris,

. January 1974.

158

. Milk and Milk Products Balances in OECD Member
Countries. Paris, July 1974.

 

 

 

Agricultural Policy in Greece. Paris, 1973.

. The Market for Beef and Veal and Its Factors,
Paris, 1967.

 

. 'Agricultural Development in Southern Europe.
Paris, 1969.

Main Economic Indicators. Paris, March 1974.

 

Ogunforowa, O. "Derived Resource Demand, Product Supply
and Farm Policy in the North Central State of Nigeria."
Ph.D. dissertation, Iowa State University, 1972.

Papageorgiou, E. “Agricultural Policy. Thessaloniki,
Greece.

 

Papaioannou, M. and Jones, C. "Supply Responses for
Cattle, Sheep and Goats in Greece, 1952-65,"
Oxford Agrarian Studies, University of Oxford,
Vol. I, No. 2, OxfOrd, 1972.

 

"Quantitative Analysis and Agricultural Policy
With Special Reference to Animal Breeding in Greece,"
Options Mediterraneennes, N0. 8, 1971.

 

 

Petit, M. J. "Econometric Analysis of the Feed-Grain
Livestock Economy," Ph.D. dissertation, Michigan
State University, 1964.

and Viallon, J. B. "The Grain-Livestock Economy
0 France with Projections to 1970 and 1975,"
Institute of International Agriculture, Michigan State
University, 1968.

Posada, A. "A Simulation Analysis of Policies for the
Northern Colombia Beef Cattle Industry." Ph.D.
dissertation, Michigan State University, 1974.

Rossmiller, G. E. "The Grain-Livestock Economy of West
Germany with Projections to 1970 and 1975," Institute
of International Agriculture, Michigan State University,
Research Report No. 1.

Schickele, R. "Farm Management Research for Planning
Agricultural Development," The Agricultural Development
Council, New York, 1966. .

159

Sharples, J. A. Heady, E. O. and Sherif, M. M. "Potential
Agricultural Production and Resource Use in Iowa,"

Rggg§rch Bulletin, 569, Iowa State University, (June,

. "The Representative Farm Approach to Estimation
of Supply Response," USDA, 1968.

Schultz, T. W. Transforming Traditional Agriculture.
New Haven: YaIe University Press, 19647

 

Shaw, L. "Post-War Growth in Greek Agricultural Production,"
Center of Planning and Economic Research, Athens, 1969.

Shumway, C. R., Bentley, E. and Barrick, E. R. "Economic
Analysis of a Beef Production Innovation: Dairy-
Beef Crossbreeding," Department of Economics, ERR-26,
North Carolina State University, March 1974.

Smith, S. F. "Linear Programming A New York Dairy Farm,"
Agricultural Extension Report 555, Cornell University,
(March 1970).

Tselepis, N. Production Cost of Crop and Livestock Products.
Athens, I968.

United Nations. Menthly Bulletin of Statistics, Vol.
XXVIII, N0. 3, (Marchi1974). '
1 . Yearbook of National Accounts and StatisticsL
01. III. New York, 1974.

Vakakis, F. "Meaning and Content of Agricultural Sector
Investment Planning," Agricultural Bank of Greece,
Bulletin 191, Athens (1973).

Vincent, W., ed. Economics and Manggement in Agriculture.
Englewood Cliffs, N.J.: Prentice-Hall, Inc., 1962.

and Connor, L. J. "An Orientation for Future
Farm Planning and Information Systems,” Agricultural
Economics Miscellaneous, Michigan State University,
1968. .

Wragg, S. R. Godsell, T. E. and Williams, G. ”Co-operative
Research on Input-Output Relationships in Beef
Production," OECD, Paris, 1968.

Yotopoulos, P. "Allocative Efficiency in Economic Develop-
ment," Center of Planning and Economic Research,
Athens, 1967.

160

and L. J. Lau. "On Modelling the Agricultural
Sector in Developing Economies: An Integrated
Approach of Micro and Macro Economics," Food Research
Institute, Memorandum, No. 148, (June 1973).

11" [III lll'l'l 1111 If) .Sbrl

"‘MMMM