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Increasing farm incomes using support for producer groups

Agricultural Economics, Business
Farm management

Support for a producer group shall be based on the income from the sale of its products. The income of a dairy farm depends on milk prices, herd size and cow productivity. The most realistic solution is to increase farm income by increasing cow productivity. The model presents theoretical calculations for a group of ten farms with an average number of dairy cows per farm of about 75 cows. By increasing the productivity of cows (e.g. from 5 to 7 tons), we would achieve an increase in the income of one farm and a group of ten farms. In a few years, we can achieve a 40 percent or more increase in revenue without changing other factors (number of cows and average milk sales price). How to achieve productivity growth per cow? It is necessary to remember the classic methods: to take care of animal health (to adapt various veterinary measures), to improve the herd genetics (e.g. to choose more productive breeds) and to take care of good animal diets (e.g. balanced feeding technologies). Each farm can do it on its own, but the greatest success could be achieved by working in a group. The use of the various measures mentioned here is the most useful when the group concludes contracts with veterinary, genetic and feeding specialists or companies in these fields. They would assess the condition of all farm herds and be able to submit improvement plans and supervise the implementation of those plans, follow changes, and advise farm owners. Higher price discounts could be negotiated when purchasing services, miscellaneous feeds and nutritional supplements. Benefits for farmers. Under this support model, farmers would not invest in "solid" production or farm management tools (e.g. refrigeration equipment, dairies, other machinery). They would apply other operational tactics. The producer group would buy advisory services, veterinary, genetic improvement measures, valuable (balanced) feeds and additives. This support model can be applied in the dairy sector, raising livestock for meat, pigs and other animals. It can be also applied in organic crop production, horticulture and greenhouse farms. Only instead of veterinary, genetic and feeding measures it would be appropriate to use the measures of plant protection, adaptation of new and reliable varieties and precise farming.

Technology readiness level
TRL 4 - technology validated in lab

Effect: Economical

Argumentation: Can be applied in practice.

About innovation
  • Year: 2020
  • Project: Increasing farm incomes through support for producer groups