Identifying profitable activities on the frontier: The Altillanura of Colombia

Fontanilla-Díaz, C.A., Preckel, P. V., Lowenberg-DeBoer, J.M., Sanders, J. and Peña-Lévano, L.M. (2021) Identifying profitable activities on the frontier: The Altillanura of Colombia. Agricultural Systems, 192.

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CONTEXT This paper assessed the potential for agricultural development in the Colombian Altillanura, a frontier area of a middle-income country with a history of internal conflict. This region is suitable for growing diverse crops ranging from staple crops and livestock to high-valued commodities such as cacay (a nut whose oil is used in the cosmetic industry). OBJECTIVE The model suggested an optimal portfolio of agricultural enterprises for a representative farm that maximizes revenues net of variable costs and returns to resource endowments. Traditional agricultural enterprises were assessed, as well as some others that appear to be promising possibilities for Altillanura. METHODS A linear programming model (LP) was designed to support the assessment of the relative profitability of agricultural enterprises in a post-conflict era as a response for the need to reduce agricultural net imports, satisfy a growing domestic food demand and boost economic and social development. RESULTS and CONCLUSION A major finding was that labor shortages in the region are a key constraint for perennial crops such as oil palm, cacay, and cashew. Inclusion of mechanized crops like rice, corn, and soybean can help to alleviate this limitation, resulting in the preferred farm choice among the conventional farm activities. Integrated (Crop + Hog) operation is the most profitable among promising enterprises, but its operation size would be constrained by access to processing plants and marketing strategies. Cacay and cashew represent a viable option for farms to increase net returns using high-valued perennial crops. SIGNIFICANCE Currently, cattle production on native savannas is the most common agricultural activity in the region, but this model challenged this status quo by identifying other more profitable alternatives that include improved production systems for cattle, hogs, and crops.

Item Type: Article
Keywords: Farm resource allocation model, Linear programming, Net revenue maximization, Post-conflict agriculture, Rural development
Divisions: Food, Land and Agribusiness Management
Depositing User: Mrs Rachael Harper
Date Deposited: 20 Jul 2021 11:42
Last Modified: 20 Jul 2021 11:42

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