A Linear Programming Approach Claudio Pou Iowa State University

Iowa State University Capstones, Theses and Retrospective Theses and Dissertations Dissertations 1972 Optimal allocation of agricultural resources in the Development Area of Patacamaya, Bolivia: a linear programming approach Claudio Pou Iowa State University Follow this and additional works at: https://lib.dr.iastate.edu/rtd Part of the Agricultural and Resource Economics Commons, and the Agricultural Economics Commons Recommended Citation Pou, Claudio, "Optimal allocation of agricultural resources in the Development Area of Patacamaya, Bolivia: a linear programming approach" (1972). Retrospective Theses and Dissertations. 5951. https://lib.dr.iastate.edu/rtd/5951 This Dissertation is brought to you for free and open access by the Iowa State University Capstones, Theses and Dissertations at Iowa State University Digital Repository. It has been accepted for inclusion in Retrospective Theses and Dissertations by an authorized administrator of Iowa State University Digital Repository. 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Silver prints of "photographs" may be ordered at additional charge by writing the Order Department, giving the catalog number, title, author and specific pages you wish reproduced. University Microfilms 300 North Zeeb Road Ann Arbor, Michigan 48106 A Xerox Education Company 73-3924 POU, Claudio, 1934- OPTIMAL ALLOCATION OF AGRICULTURAL RESOURCES IN THE DEVELOPMENT AREA OF PATACAMAYA, BOLIVIA. A LINEAR PROGRAMMING APPROACH. Iowa State University, Ph.D., 1972 Economics, agricultural University Microfilms, A XEROX Company, Ann Arbor, Michigan THIS DISSERTATION HAS BEEN MICROFILMED EXACTLY AS RECEIVED. Optimal allocation of agricultural resources in the Development Area of Patacamaya» Bolivia. A linear programming approach by Claudio Pou A Dissertation Submitted to the Graduate Faculty in Partial Fulfillment of The Requirements for the Degree of DOCTOR OF PHILOSOPHY Department: Economics Major; Agricultural Economics Approved: Signature was redacted for privacy. Signature was redacted for privacy. For the Major Department Signature was redacted for privacy. For the Graduate College Iowa State University Ames, Iowa 1972 PLEASE NOTE: Some pages may have indistinct print. Filmed as received. University Microfilms, A Xerox Education Company 11 TABLE OF CONTENTS Page CHAPTER I. INTRODUCTION 1 Nature of the Problem and its Setting 1 Objectives of this Research 3 Methods Used In Pursuing the Objectives 5 Organization of the Study 6 CHAPTER II. AREA OF STUDY 8 The Development Area of Patacamaya 8 Developmental Efforts in the Area 24 CHAPTER III. DEVELOPMENT OF MODEL AND DATA NEEDS 40 Basic Considerations 40 A Linear Programming Model 45 Data Needed and Their Collection 48 The Objective Function 50 Procedures to Satisfy the Objectives 56 CHAPTER IV. RESOURCE AVAILABILITIES AND CONSTRAINTS 68 Land 68 Labor 73 Capital 79 Water 83 Machinery 85 CHAPTER V. PROGRAM ACTIVITIES AND THEIR COEFFICIENTS 87 Crop Activities 87 Coefficients for Crops 92 iii Page Livestock Activity 109 Coefficients for Sheep 112 CHAPTER VI. PRICES, COSTS AND REVENUES 122 Prices of Inputs 122 Prices of Outputs 132 Fixed Costs 136 Variable Costs 139 Revenues 139 CHAPTER VII. APPLICATION OF THE MODEL 155 The Linear Programming Matrices 155 Degrees of Mechanization 157 Computer Runs 167 CHAPTER VIII. INTERPRETATION OF THE RESULTS 170 Optimal Solutions 170 Optimal Farm Plans 190 Use and Scarcity of Resources 208 Productivity, Costs and Returns 214 Paths for Mechanization 221 Alternative Criteria of Optimality 245 Comparisons with the Present Situation 251 Expanding the Results to the Entire Development Area of Patacamaya 258 CHAPTER IX. CONCLUSIONS AND RECOMMENDATIONS 261 Conclusions Related to the Objectives 261 iv Page Policy Recoimnendatioiva 266 Suggestions for Further Research 268 CHAPTER X. SUMMARY 273 BIBLIOGRAPHY 282 ACKNOWLEDGMENTS 291 APPENDIX A. UNITS OF MEASUREMENT 293 APPENDIX B. MONTHLY WEATHER DATA FROM METEOROLOGICAL STATIONS IN THE DEVELOPMENT AREA OF PATACAMAYA 296 APPENDIX C. LABOR, WATER AND MACHINE TIME REQUIREMENTS, BY TIME PERIODS 300 APPENDIX D. INFORMATION RELEVANT FOR PLANNING A SHEEP RAISING ACTIVITY IN THE DEVELOPMENT AREA OF PATACAMAYA 306 APPENDIX E. MODEL FOR A SHEEP FLOCK UNIT OF 200 BREEDING EWES, IN THE DEVELOPMENT AREA OF PATACAMAYA 313 APPENDIX F. FIXED COSTS, VARIABLE COSTS, REVENUES 335 APPENDIX G. THE LINEAR PROGRAMMING MODEL 339 APPENDIX H. SHADOW PRICES OF LIMITING RESOURCES IN THE OPTIMAL SOLUTIONS 432 APPENDIX I. UNUSED MACHINERY IN THE OPTIMAL SOLUTIONS 439 APPENDIX J. RESULTS FROM THE OPTIMAL SOLUTIONS 446 APPENDIX K. MISCELLANEOUS TABLES 459 APPENDIX L. THE SHEEP RAISING ACTIVITY 470 APPEÎÎDIX M. CHANGES IN THE MODEL 473 1 CHAPTER I. INTRODUCTION Nature of the Problem and its Setting In 1953, when the Land Reform was launched, the Bolivian Government proceeded to transform agriculture from traditional to modern forms and methods. Although initially a change in land tenure arrangements, the Land Reform was intended to have far-reaching effects upon productive aspects of agriculture. Since inception of the reform, increased agricultural production, both to improve farmers' standard of living and to reduce the deficit in the balance of payments, has been one of the main concerns of the National Government in establishing policies for development of agri culture. A recent study (Clark 1968) has shown that any decrease in pro duction after 1953, especially in the supply reaching the cities, was not a direct result of the changes in land tenure effected by the Land Reform. Some reductions in agricultural supply were inevitable consequences of a popular Revolution (of which Land Reform was only one component) whose major aim was to destroy the minority-based power structure and to create a more broadly based government (Clark 1970, pp. 52-53). Within Government, both before and after the reform, there has existed the conviction that a necessary Ingredient of agricultural development is a strong program of research and extension. This conviction stemmed from the realization of very low levels of education and technology within the agricultural sector. Policies were not always enacted in accordance with 2 that conviction mainly because of budgetary constraints. However, in recent years, renewed emphasis has been placed upon research and exten sion work revolving around the Experimental Stations. In the high plateau region, known as the Altiplano, the Ministry of Agriculture maintains three experimental stations: Belén, by Lake Titi- kaka; Patacamaya, at the southern edge of the Department of La Paz; and Chinoli, in the Department of Potosl. The Experimental Station of Pataca maya, founded in 1958, has received a larger share of support and is viewed by the National Government as a pilot project in testing the role an ex perimental station can play in the development of the surrounding area. Although founded as an Experimental Station primarily for the improve ment of sheep, Patacamaya has also been quite successful in crop improve ments. Research in potato, quinua and forages has already yielded con- eiderable increases in production. Recent informal experiences with gladiola and some vegetables seem to open new possibilities. And, of course, there is continuous work being done in improving sheep through cross-breeding with imported animals and through better feeding and management. Formal extension activities by the Station began in 1963. In 1966, the Development Area of Patacamaya was established and the cooperative firm was chosen as the framework within which extension work would pro ceed. Apparently, the activities and results of the Experimental Station are largely responsible for the new drive for progress which is quite noticeable throughout most of the Development Area. 3 Given the experience accumulated so far and the planning being done for

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