THE DECISION SUPPORT SYSTEM KMETIJA - A TOOL TO HELP FARMERS AT PRODUCTION-ECONOMIC DECISION- MAKING

Andrej Udovc

University of Ljubljana, Biotechnical Faculty -Agronomy department, Jamnikarjeva 101, 1000 Ljubljana, Slovenia, [email protected]

Abstract: The paper presents the decision support system KMETIJA (Farm) which is intended to be used by farmers, extension workers, decision makers and other subjects active in agriculture and rural areas. KMETIJA consists of three parts: data banks, simulation core and financial calculations. The simulation core consists of two submodels which are used to simulate farm’s plant and animal production. The results of the simulation are further used for financial calculations and for elaborating a production plan which includs labour force and agricultural machinery balance. In the financial calculations liquidity, profit and investments decisions are calculated.

Keywords: Agricultural economics, Farm, Mathematical model, Decision support system, Simulation, Slovenia

1 Introduction

To support the efforts of farmers, decision makers and other subjects in agriculture and rural areas to quick and successful adapt on continuously changing production, environmental and socio- economical conditions, steadily new plans and their variations have to be designed and afterwards checked to realize, if selected adaptation measures are going to be successful or at least feasible. One of the tools that can be used to support this tasks, are the decision supports systems. In the following one of them named KMETIJA (Farm), which was developed to meet the conditions in Slovenian agricultural production, is going to be presented.

2 Farm decision support system

On the Agronomy department of the Biotechnical Faculty of the University of Ljubljana, a farm decision support system, is in development (Cetina et al 1993; Udovc 1996, Udovc 1996). The starting point for this system represents already developed Farm household model, which can be, as a computer program used to help farmers by meeting their decisions concerning different production and investment variants. Specially it is emphasized what impact the different combinations may have on liquidity and stability of the farm household. By the development of this decision support system the "top down" principle of designing a skeleton model (Dent, 1975) is followed and the "open architecture" is used as a design approach. The “open architecture” design approach allows:

First European Conference for Information Technology in Agriculture, Copenhagen, 15–18 June, 1997 - not having all the major components of the system operational before the parts of the system can be effectively used and - the users of the system need only to select those parts of the overall system that meet their information needs. With the “open architecture” approach, the users can select as little as a single model or, based upon their needs, selectively choose several models and databases to form a uniquely tailored decision support system. The fact that models and databases can be incrementally added to the system with the "open architecture” approach simplifies the development process. For the “open architecture” concept to function, all the models and databases must utilize a set of standards for sharing the data between the various sub components. Thus, as new models and databases are developed using the open architecture standards, it is possible to release them knowing that they will be compatible with existing and forthcoming models and databases.

2.1 Model of the farm household

The connections of agricultural production and farm with their natural and socio-economical surroundings are very intense, and as such they are very sensitive to all changes. Because of this fact is, by planning or evaluation of new and changed economical and environmental activities, very important to dispose with information about their influences on farm households. For gaining these information the decision support systems can be used. The agricultural production is in private sector in Slovenia traditionally realized on family farms. A common Slovenian family farm is an organizational unit of production and household, where the production is performed almost exclusively with the farm family labor force.

Figure 1: Scheme of the farm model

The Slovenian family farms are in comparison to West-European farms very small. So has a farm in Slovenia in average 6,3 ha of forest and agricultural land inclusive 3,3 ha of arable land. The average size of cattle herd is 5 heads of cattle or 3 cows. This small farm size has it's grounds on one side in disadvantageous natural conditions, and on the other side it is also a result of certain historical and socio-economical conditions. According to last data about the socio-economical structure of the Slovenian family farms, those farms are in majority, which dispose also with some additional nonagricultural financial sources. This money can be transferred when needed into agricultural production and vice versa. The figure 1 shows the structure and the relations between parts of the developed model, which should represent a common Slovenian farm. The flows are divided in four groups: Goods, Finances, Services and Information. The system consists of five subsystems: Acquisition, Production, Sale, Financing and Household. All the subsystems are furthermore divided into basic systems, which are composed of respecting basic elements.

2.2 Decision support system KMETIJA

The decision support system KMETIJA is designed as an open, easy to supplement system. The computer programme contains four main modules: DATA MANAGEMENT, SIMULATION, FINANCES and RESULTS. The main modules are furthermore divided into smaller program parts, which perform specific tasks. At the moment the system is designed for IBM-compatible personal computer with database management system PARADOX 4.0 for DOS. The figure 2 shows the structure of the decision support system. At the lower part the data banks of the system are shown. There are three groups of data banks. The first one includes system data banks, the second one includes farm data banks and the third one include the production models. In this data bank the ready to use standard production technologies models for different agricultural products, that can be directly used for the simulation, are provided.

Figure 2: Scheme of the developed decision support system KMETIJA

The interaction with the data in data banks is possible in the DATA MANAGEMENT main module. The module consists of three parts: systemdata management, farmdata management and production models management. For forming the farmdata bank and production models, the data from systemdata bank, which contain data provided from experts, are primarily used. But it is always possible to build users own farmdata bank and production models. In this case all in systemdata bank not jet available data, which are entered into farmdata bank or used by construction or editing of production models are automatically stored into systemdata bank too. On the central part of the figure 2 the simulation model, with which the agricultural production on the farm is simulated, is shown. The model has been build on the principal of skeleton model what enable it's relative simple implementation with new, at the time not jet available production branches, so as further improvement of the model. So the simulation model itself consists of a some kind of skeleton made only out of those algorithms, variables and formulas that are common to all variation that a modeled real system can be found in. All other algorithms, variables formulas and data, are added to the model during the simulation process from adequate data banks and as such it represents a simulation core of the decision support system. The simulation is performed in the SIMULATION main module, which is divided into submodules Plant production and Animal production. In the submodule Plant production the production of market and fodder crops is simulated. The submodule Animal production includes at the moment the dairy production, cattle breeding and pigs fattening. The developed system includes in Slovenia predominating branches of agricultural production. The time range of the simulation is free to define. The simulation is internally running in steps of ten days (decades). The information gained with the simulation are once summarized as production plans with list of needed material inputs and produced outputs, so as a list of needed machines and labor force balance is elaborated. The results are presented to the user together with results of economic calculations in a form of different protocols in the RESULTS module. On the other side the gained information are used as input data for further economical evaluation. Upper part of the Figure 2 shows the economical calculations that are performed in the FINANCES. At the moment the user has a possibility to calculate gross margin, income, monthly cash-flow, and the net present value of new investments, so as the optimal moment for replacement of an old, but still usable machine. Because the main object of the interest is not only the farm’s agricultural production, but the farm household as whole, all the economical evaluations are extended to all financial inputs and outputs of a farm household. So it is always possible to consider and to evaluate also the nonagricultural activities, that can be present at farm household.

3 Conclusion

The presented decision support system KMETIJA shows the tool that can be used by different subjects involved in planning and evaluating steadily changing economic and/or environmental conditions in agriculture and rural areas in Slovenia. The most important advantages of the presented system are the open architecture approach at developing the system and the skeleton model design of simulation core, while both are providing the necessary flexibility, that is expected from a good decision support system, what secures wide range of its possible uses in the future.

4 References.

Cetina, A. et al (1993) Use of integrated simulation model for economic evaluation of agricultural land. In: Annevelink, E. et al (Ed) Proceedings XXV. CIOSTA - CIGR V. Congress. 130-135. Wageningen Pers, Wageningen. Dent, J. B. (1975) The application of system theory in agriculture.- In: Dalton, G. E., (Ed.) Study of agricultural systems. 107-127. Applied Science Publishers, London. Udovc, A. (1996)Ein mathematisches Modell für die Entscheidungshilfe in slowenichen landwirtschaflichen Betrieben. Wissenschaftlicher Fachverlag, Giessen. 181 pp. Udovc, A. (1996) The decision support system KMETIJA - a tool to help farmers at production- economic decision-making. Res. Reports Biotechnical Faculty of the University of Ljubljana. 67. 241-251