Applications of linear programming to corporate farm planning in developing countries : a case study for NAFCO Farms in Tanzania : a thesis presented in partial fulfilment of the requirement for the degree of Master of Agricultural Business and Administration at Massey University

Abstract

The economic development of most of the developing countries depends, almost entirely, on the agricultural industry. Measures to speed-up the development of the agricultural sector to increase productivity in such countries are therefore imperative. In Tanzania, one of the actions the government has taken to achieve this is the establishment of agricultural Corporations which operate large scale mechanized farms. To achieve maximum productivity from scarce resources, such Corporations must be operated efficiently and this can only be achieved with appropriate planning of the corporate farms. This study has dealt with one such Corporation in Tanzania called National Agricultural and Food Corporation (NAFCO). The objective of the study has been to illustrate how such a Corporation can be operated efficiently so that maximum food production can be achieved from scarce resources. Linear programming has been evaluated as a planning tool for a single representative farm of NAFCO. The aim was to develop a suitable LP model for the farm, use this model to determine the optimal farm plans and associated information and evaluate whether the technique would form a suitable planning tool for NAFCO farms. The linear programing model developed demonstrated that the profits of the farm under study could be increased substantially by allocating the farm scarce resources more optimally. Repeating the optimisations of the model by changing the various assumptions proved to be quite useful in providing additional information on which to base management decisions. These results provided a better understanding of the effects and implications on what would happen if the anticipated yields, prices and certain policy decisions were changed. These are discussed in detail. The optimum plan computed should with minor changes be both acceptable and realizable. It is argued that, because under corporate farm structure, specific data relevant to individual farms is more readily available than under peasant farm situations and that because of the large scale nature of the corporate farms, the availability of wide choice of activities and resources as well as the necessary skills and defined objectives; linear programming would form a suitable planning tool for NAFCO farms.