Decision supporting system for animal breeding small farms

Székelyhidi, TamásKovács, Attila

Agricultural Cooperative Gödöllő University of

Development InternationalAgricultural Sciences
Volunteers in Overseas Cooperative AssistanceDepartment of economy

Budapest, HungaryGödöllő, Hungary

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ABSTRACT

Our objective has been to develop a computerized application to assist (small and medium size enterprises) new farmers, and farmers experienced in livestock production in decision making.

We were trying to consider the objectives that we thought were important in relation to developing the system as well as to meet the needs of the farmers. Also our aim was to develop a decision making support system for those farming practices which did not have anything until now (goat, sheep, red deer, fallow deer wild boar, pigeon, etc. - basically for the new alternative enterprises).

The software program includes various units:

  • basic information on the specific stock, basic references;
  • livestock management plan;
  • feeding plan;
  • stock management plan;
  • calculation of costs based on the variation of livestock;
  • calculation of the income;
  • loan calculations and liquidity assessment;
  • summary tables.

During the last four months the ACDI/VOCA organized four training programme for goat producers. The software became the best communication tool between farmers and lecturers and adviser because they could set up models easily and predict the future opportunities for farmers.

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Introduction

The principles of the software programme originate from the Malom Vezetői és Tulajdonosi Információs Rendszer (Mill Management and Owners Information System), which is one of the products that we developed. This decision supporting system of spreadsheets based on simple cell references provides an opportunity to assess various input procurement (when, how much, at what cost), product sales and storage capacity alternatives. After analysing various stock-keeping strategies, the selection considered to be the most appropriate from the viewpoint of the management, the decision-makers or the owners can be made. By using the “credit module”, financial plans for obtaining loans can be made easily and quickly. Besides the afore-mentioned issues, the software programme provides an opportunity to clarify the problems associated with the balance of the VAT resulting from the different timing of tax paying and reclaiming. Finally, the ultimate advantage of the software programme is that each specific alternative plan can be compared to the one utilized on the given farm.

Following is a description of the spreadsheet-based software programme supporting livestock farmers.

Our objective has been to develop a computerized application to assist small and medium size enterprises, new farmers, and farmers experienced in livestock production in decision making. The application developed makes it possible to elaborate a planning model for an additional species of livestock in one or two days upon obtaining the appropriate information on the relevant feeding, livestock management and production technology used.

When developing the software programme, we intended to enable it to monitor the processing of products (if there is any on-farm processing) as well.

The software programme shall

  • be appropriate to be used within the framework of a future training programme;
  • meet the needs of the financial institutions concerning the information required on the enterprises when evaluating their loan applications;
  • render it possible to monitor the sales and the procurement of the major products and inventories of strategic importance, and consequently to make it possible to quickly develop sales and procurement alternatives;
  • be suitable to assess the economic efficiency of the investments;
  • provide for the break-even analyses;
  • make it possible to assess the various feeding alternatives.
Material and methods

The structure of the programme

The software programme includes various units:

1.basic information on the specific stock, basic references;

2.livestock management plan;

3.feeding plan;

4.stock management plan;

5.calculation of costs based on the variation of livestock;

6.calculation of the income;

7.loan calculations and liquidity assessment;

8.summary tables.

Besides the units listed above we have been trying to consider various additional objectives. When developing the software programme we used Microsoft Excel 5.0 as a basis and aimed at making the software programme easily adaptable to each specific environment as well as at providing for the opportunity to append new modules to the existing units.

1.Basic data and basic correlations in regard to the specific stock

This unit incorporates the data and correlations on which the system is based including:

  • a table of age groups;

In this table the description of the various age groups, and the needs of these age groups for dry matter, net energy and crude protein are included. These data provide for the basis for preparing a feeding plan. This table shall include age groups with uniform feeding requirements. The package continues with a background table where the users can find the list of different nutrients with the basic data. The user can convert these into the table very easily (the table can be developed in any environment).

  • a table of correlation between various age groups;
  • The user can find in this section the matrix of decreases and increases, and matrix of the offspring.
  • a table of the progeny ratio;
  • a table of the death ratio;
  • feeding losses.

2. Plan for the changing livestock

In the plan for the changing livestock the following are included:

  • the table including the increase and decrease of the age group;
  • the table of the feeding plan containing the above requirements and the balances of dry material, net energy and crude;
  • the quantity, cost and - if the feed is produced by the producer itself - the area required for the production of feed consumed.

The above values were added by age groups and included in a summary table.

3. Stock management plan

By means of this plan the purchase and the stock of three major materials of strategic importance can be monitored.

The financial plan can be influenced by the choice of the purchasing time.

4. Cost budgeting as a function of stock, income calculation

The operation costs will be included. Cost budgeting will be prepared corresponding to the previously determined stock size. Therefore, only those costs can be included which vary by the size of production. Income values are calculated in a similar way. (The cost of TQM system can be calculated in this part.)

5. Loan calculations and liquidity analysis

In this section one can apply for three types of the most important loans. From these, two are current assets loans and one is a long-term loan (additional possibilities can be found too). The programme records automatically the repayment of the loans corresponding to the terms. The operational costs and the income are summarized in this table necessary for the liquidity analysis. A diagram as a function of time shows financing. Also connected to this section is a software which can help the users to write business plans for banks and can calculate 14 different liquidity numbers by the use of the summary table. Also this part is a clear phase for the bank which wants to monitor the project or the enterprise.

6. Summarizing tables

The data in the table are representing one Hungarian goat farm (up to 30 does).

year
1996 / 1997 / 1998 / 1999 / 2000
Area requirement / (ha)
1 / Milking goat / 3.1 / 3.1 / 3.1 / 3.1 / 3.1
2 / Dry goat / 1.3 / 1.1 / 1.1 / 1.1 / 1.1
3 / Goat in gestation / 1.0 / 1.1 / 1.1 / 1.1 / 1.1
4 / Seed goats / 1.8 / 2.0 / 2.0 / 2.0 / 2.0
5 / Young goat
6 / Kid / 0.2 / 0.2 / 0.2 / 0.2 / 0.2
Total: / 7.4 / 7.4 / 7.4 / 7.4 / 7.4
Investment costs / (HUF)
1
2
Total:
Incomes / (HUF)
Milk and milk products
sales of milk
cottage cheese / 425.0 / 430.1 / 430.1 / 430.1 / 430.1
yogurt / 522.5 / 528.8 / 528.8 / 528.8 / 528.8
cottage cheese / 337.5 / 341.6 / 341.6 / 341.6 / 341.6
spiced cheese with butter / 511.5 / 517.6 / 517.6 / 517.6 / 517.6
fresh cheese / 466.2 / 480.2 / 480.2 / 480.2 / 480.2
spiced cheese / 686.7 / 720.3 / 720.3 / 720.3 / 720.3
livestock
Milking goat
Dry goat
Goat in gestation
Seed goat / 510.0 / 510.0 / 510.0 / 510.0 / 510.0
Young goat
Kid / 107.8 / 107.8 / 107.8 / 107.8 / 107.8
Total: / 3567.2 / 3636.4 / 3636.4 / 3636.4 / 3636.4
year
1996 / 1997 / 1998 / 1999 / 2000
Costs / (HUF)
Feed costs
Milking goat / 369.0 / 369.0 / 369.0 / 369.0 / 369.0
Dry goat / 153.0 / 127.6 / 127.6 / 127.6 / 127.6
Goat in gestation / 120.0 / 127.6 / 127.6 / 127.6 / 127.6
Seed male / 134.2 / 146.9 / 146.9 / 146.9 / 146.9
Young / 12.5 / 12.5 / 12.5 / 12.5 / 12.5
Kid / 36.7 / 36.7 / 36.7 / 36.7 / 36.7
Other costs. / 117.3 / 116.6 / 116.6 / 116.6 / 116.6
Processing costs / 354.6 / 352.7 / 352.7 / 352.7 / 352.7
Transportation costs / 162.9 / 162.0 / 162.0 / 162.0 / 162.0
Young goat costs / 218.1 / 216.9 / 216.9 / 216.9 / 216.9
Bedding / 102.6 / 102.0 / 102.0 / 102.0 / 102.0
Extension / 97.7 / 97.2 / 97.2 / 97.2 / 97.2
Feed analysis. / 65.1 / 64.8 / 64.8 / 64.8 / 64.8
Milk analysis / 97.7 / 97.2 / 97.2 / 97.2 / 97.2
Product analysis / 195.4 / 194.4 / 194.4 / 194.4 / 194.4
Rapier costs / 58.6 / 58.3 / 58.3 / 58.3 / 58.3
Development / 81.4 / 81.0 / 81.0 / 81.0 / 81.0
Cost of facility / 42.3 / 42.1 / 42.1 / 42.1 / 42.1
Cost of envi.prot.
Labor/h
etc.
Total: / 2419.2 / 2405.4 / 2405.4 / 2405.4 / 2405.4
Loan / (HUF)
Loans
- Loans on current assets 1. / 196.4
- Loans on current assets 2. / 500.0
- Long term loans
Total: / 696.4
Loan repayment
- Capital repayment of current assets loan 1. / 196.4
- Interest repayment of current assets loan. 1. / 19.8
- . Capital repayment of current assets loan 2. / 500.0
-. 2. Interest repayment of current assets loan. / 80.0
-Capital repayment of long term loan.
- Interest repayment of long term loan
Total: / 796.1
year
1996 / 1997 / 1998 / 1999 / 2000
Cash flow before tax and VAT / HUF
Total income / 4263.6 / 3636.4 / 3636.4 / 3636.4 / 3636.4
total costs / 3215.3 / 2405.4 / 2405.4 / 2405.4 / 2405.4
Balance / 1048.3 / 1230.9 / 1230.9 / 1230.9 / 1230.9
Cumulative balance / 1048.3 / 2279.2 / 3510.2 / 4741.1 / 5972.1

In the above table data are to be analyzed further in the other part of the software package and which can generate into a bookkeeping system.

Conclusions

Our objective has been to develop a computerized application to assist small and medium size enterprises, new farmers, and farmers experienced in livestock production in decision making.

The system that we developed is a user-friendly system. It can be used by extensions and banks as well to give advice and monitor farm production.

The major advantage of this Manager information system is that the user can analyse the current situation and predict the future of the farm very quickly.

Because the programme contains all the parameters of the TQM requirement, sustainability of the farm is growing with the use of it.

The application developed makes it possible to elaborate a planning model for an additional species of livestock in one or two days upon obtaining the appropriate information on the relevant feeding, livestock management and production technology used.

Results

During the last four months the ACDI/VOCA organized four training programmes for goat producers. The software became the best communication tool between farmers and lecturers and adviser because they could set up models easily and predict the future opportunities for farmers.

The ACDI/VOCA decided to put on CD-ROM the whole information and decision-making support system to promote the extension work in the industry.

References

Székelyhidi T.1996. A total quality management megvalósításának lehetősége családi gazdaságokban kecsketej termékek előállítása során. In: XXVI Óvári Tudományos Napok. PATE Mosomagarovar. III. Kötet pp. 595-601.

Székelyhidi T.- Fercsik P. 1996. Kecsketenyésztéssel foglalkozó családi gazdaságok állatállományának genetikai fenntarthatósága. In: XXVI Óvári Tudományos Napok PATE Mosomagyaróvár I. Kötet pp. 178.-183.

Székelyhidi T. – Fercsik P. 1996. Kecskére alapozott családi vállalkozási modell kialakításának lehetősége egy rendszergazda irányításával és biztosítékaival, kecsketej termékek előállítására. In: Agrárökonómiai Tudományos Napok GATE-MFK Gyöngyös II. Kötet pp. 742-746.

Székelyhidi T. – Gazdag A. – Horváth I. 1996. A vállalkozás beruházás igényének vizsgálata, illetve a költségcsökkentő tényezők alkalmazásának lehetőségei. In: XXVI Óvár Tudományos Napok. PATE Mosonmagyaróvár. III. Kötet 755-760 p.

Szekelyhidi T. 1996. The role of information and extension in the institution system of integrated rural development - an introduction and a case study. In: Rural Development strategy for Slovakia. Proceedings.139-143 p.

Kiss B. – Kovács P. – Szekelyhidi T. & Kukovics S. 1997. Breeding aims to develop sheep milk production. In: Options mediterranennes, Serie A: Seminaries mediterraneens, No 33:137-143 p.

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