Objectives

The aims of the course are:
1.  To provide a basic understanding of the theory and applied principles of production economics in relation to farm household behavior

2.    To demonstrate the usefulness of these principles through their application to agricultural production problems in the large scale and smallholder farming sectors;

3.    To provide an introduction to farm planning techniques that can be applied to individuals or groups of farms (large or small).

Method
The course will consist of two one-hour lecturers and one two-hour session in alternative weeks for two terms and four weeks. The use of  the two-hour session will vary during the year; the time may be used   for set exercises, reading assignments, computer practicals, tutorials or presentation of seminars by students.

Assessment
Student assessment will take two different forms;
i) A written examination paper in November carrying a weight of   70%
ii)  Continuous assessment based on:
a)  Assignments, computer practicals, term paper essays Bc   seminars            15%
b) two class tests                                                                                         15%

Lecturer:                   Mr E Makaudze
Lecture time:             Monday 9.00 - 10.00rs           LT II
                                Wednesday 8.00 - 9.00hrs      LT II
                                Seminar/Practical Alternate Tuesdays 14.00 - 16.00hrs

Consultation Consultation is normally by prior arrangements. However, students may drop in for a very brief discussion.

Reading list - General Textbook Reference

Rae, A N Crop Management Economics Granada, 1981. Paperback

Debertin D. L. Agricultural Production Economics, MacMillan, 1986

Doll, J P and Orazem, F. Production  Economics Theory  with Applications.  2nd Ed. John Wiley L Sons, 1984. Paperback

Ellis, F 'Peasants Economics Farm Households and Agrarian Development.
                  Cambridge University Press, 1988

*Upton, M Farm Management in Africa Oxford University Press, 1973 and 1987 Paperback.

Upton, M (1976) Agricultural Economics and Resource Use (OUP)

Barnard, C S and Nix, J S Farm Planning and Control. 2nd Ed. Cambridge University Press, 1979. Paperback.

Clayton,E Agriculture, Poverty and Freedom in Developing Countries MacMillan, 1983.

Levi, J and Havinden, M Economics of African Agriculture Longman, 1982.

Dillion, J L. and Hardacker, J B Farm Management Research for Small Farm
      Development FAO Agricultural Services Bulletin No. 40, 1980.

International Rice Research Institute (IRRI) Basic Procedures for Agro- economic Research 1984.

* Copies of these key texts are available in the Department Resource Information Centre.

TERM ONE

A. PRODUCTION ECONOMICS: THEORY WITH APPUCATIONS

1.    FUNDAMENTAL CONCEPTS
      1.1  Definition and basic concepts?
      1.2 The goal of production economics?
      1.3  Relationships between production economics and farmer    decision making

      References

      Rae (1981 Chap 1)
      Doll and Orazem (1984, Chap 1)
      Upton (1973, Chap 1)
      Upton (1987, Chap 1)

2.   AGRICULTURAL PRODUCTION RELATIONSHIPS
      2.1  The production function concept
      2.2  Production with one variable input
      2.3  Production with two variable inputs

      References
      Rae (1981 Chap 2)
      Doll and Orazem (1984, Chap 2 - 4)
      Upton (1973, Chap 3)
      Upton (1987, Chap 3)

3.    USE OF PRODUCTION FUNCTIONS IN ECONOMIC ANALYSIS
      3.1  Cost relationships
      3.2  Revenue relationships
      3.3  Profit maximization

      References
      Rae (1981 Chap 3)
      Doll and Orazem (1984, Chap 2 - 4)
      Upton (1973, Chap 2
      Upton (1987, Chap 1)
      Bratton, M and Trustcott K (1985) Fertilizer packages, maize yield  and economic returns an
        evaluation in Wedza Communal land'   Zimbabwe Agricultural Journal Vol. 81 (4).
        Johnson, R W (1962). 'Fertilizer responses on maize under reserve   conditions’ Rhodesian
        Agricultural Journal Vol. 59.
     Pevrin, P. K.D. Winkleman, E.R. Moscard, J.R. Anderson (1976).  From
        Agronomic data to farmer recommendations - an Economics   Training Manual Information Bulletin
        27 CIMMYT Mexico (on   reserve in Department Resource Information Center).
        Chiwota,  B.T. (1986). An Economic Analysis of returns to fertilizer   use in Wedza Communal
        Area BSc special study - Department of  Agricultural Economics and Extension, Faculty of
        Agriculture(on reserve in Department Resource Information   Center).
        Massell,  B.F. and Johnson, R.W.M (1968). Economics of smallholder   farming in Zimbabwe A
        cross - sectional Analysis of Two   areas Food Research institute Stanford University, Supplement
        to Vol. VIII.
        CIMMYT   From Agronomic Data to Farmer Recommendations An Economics
        Training Manual CIMMYT Economics Program 1988.
    Morris, R.  A Determining optimum fertilizer recommendations Ch. 9 in   Basic Procedures For
        Agro-economic Research, International   Rice Institute, 1984.
    Mackenzie,  S. Practical Applications of economics of small scale dryland crop farming in the
        communal lands in the semi arid   areas of Zimbabwe (SAAZ) in Cropping in the semi-arid Areas
        of Zimbabwe, Proceedings of workshop held in Harare 24th to   28th August, 1987.
    Dillion,    J.L. (1977). The analysis of response in crop and livestock   production

4.  RESOURCE ALLOCATION FOR THE MULTI-PRODUCT HOLDING
  4.1  Physical production possibilities
  4.2  Relationships between products
  4.3  Allocation of one factor between two products
  4.4  Allocation of two factors between two products
  4.5  General equi-marginal principles

  References
  Rae (1981 Chap 4)
  Doll and Orazem (1984, Chap 5)
  Upton (1973, Chap 4)

TERM 2

5.  APPUCATION OF ECONOMIC REASONING TO PEASANT FARM ECONOMY
   5.1  Economic behavior of peasant households: General models            5.2 Household Economic model
   5.3   Case study - Application of household economics in Southern   Africa.

      References

      Ellis, (1988, Ch 4 - 8)
      Clayton, (1983, Ch 4 8 5)
      Levi an Havinden (1982, Ch 4 - 6)
      Low, A.  Agricultural Development in Southern Africa. Farm    Household - economics and the Food
        crisis 1986 (Esp.    Ch. 4, 7, 8).
      Hariss,     J.Ed. Rural Development: Theories of peasant Economy    and Agrarian Change.
      Hutchinson, 1982. Part 3 -     analyses of the Peasant Farm Economy.
      Lipton,  M. The Theory of the Optimizing Peasant Journal of    Development Studies, 1968.
      Helleiner, G.K. Smallholder Decision Making: Tropical African
        Evidence. in Agriculture in Development Theory L.G.    Reynolds, Ed.
      Wharton     Ed. Subsistence Agriculture and Economic Development.
      Low, A.     A Comparative Advantage Theory of the Subsistence Farm
        household. Application to Swaziland. B.A.J Econ Vol.50   No.2. 1982.

 6.  FARM SIZE AND FACTOR PRODUCTIVITY
      6.1  Production in the long run
      6.2  Returns to scale
      6.3  Farm adjustments in developed economics
      6.4  Some considerations in the context of farming in a    developing country.

      References

    Doll and Orazem (1984, Chap 6 and 10)
    Upton (1973, Chap 3)
    Clayton (1983, Chap 8)
    Levi and Havinden (1982, Ch 5)

7.  TECHNICAL CHANGE
      7.1  Economic Analysis of technical change
      7.2  Farm mechanisation (Labour saving technical change)
      7.3  Modern seed varieties (land saving technical change)
      7.4  Consideration of technical change for the future of peasant   household forms of production

References
      Ellis (1988, Ch. 11)
      Hayami, Y.  and Ruttan, V.W. (1985) Agricultural Development: an
         International Perspective Ch. 4
      Clayton, E S (1983, Ch. 8)
      Donaldson,  G.F. and Mclnerney, J.P. (1973) Changing machinery,
         technology and agricultural adjustment American     Journal of Agricultural Economics, Vol. 55
         Non.5
      Lingard,   J. (1984) Mechanization of small rice farms in the    Philippines: some income distribution
         aspects. Journal   of Agricultural Economics, Vol. XXXV No 3.
      Banta,  G.R. and Jayasuriya, S.K. Economic Analysis of New    technologies Ch. 10 in IRRI (1984)

B.  FARM PLANNING TECHNIQUES

This section of the course assumes that a student is already familiar with subjects such as complete and partial budgeting and the cash flow budget. A useful revision of these concepts is provided in Rae (1983, Ch. 5 and 6).

TERM THREE

1.  LINEAR PROGRAMMING
    1.1  Introduction to linear programming and its applications
    1.2  The linear programming model
    1.3  The simplex solution
    1.4  Constructing programming models
    1.5  Linear program modeling using FARMAP and LINDO L.P model
    1.6  Methods to evaluate the sensitivity of the L.P solution
    1.7  Programming applications to problems of minimization
    1.8  Advantages and disadvantages of linear programming
    1.9  Further programming techniques
    1.10 Use of programming models in small scale agriculture

    References

    Beneke,  R.R. and Winterboer, R., Linear Programming     Application in Agriculture., Iowa State,
        1973.
    Barnard and Nix (1979, Ch 15,17 an d18)
    Rae (1981, Ch 7 and 8)
    Upton (1973, Ch 16)
    Doll and Orazem (1984, Ch 9)
    Eicher and Baker (1982, pp 90 - 94)
    Beneke,  R.R. and Saupe, E.W., Linear Programming as a Farm    Planning Tool: An Appraisal and
        Prognosis
    Heyer, J.   A Linear Programming Analysis of Constraints on     Peasant Farming in Kenya. Food Re.
        Insti. Studies    No.10 pp. 55 - 67, 1971.
    Clayton,    E.S., Technical and Economic Optimal in Peasant     Agriculture, JAE 14, pp. 377.
    Johnson,  R.W., The African Village: An Analytical Model The Farm Economist, Vol. 11 No. 9.

2. INTRODUCTION TO DECISION THEORY
  2.1  Review of assumptions in theory of farm firm
  2.2  Characteristics which denote the degree of 'non'-certainty   in the production process.
  2.3   The influence of non uncertainty on decision making
  2.4   Decision analysis under non-certainty
  2.5   Probability theory
  2.6   Decision rules

References

Rae (1983, Ch 12 & 13)
Doll and Orazem (1984, Ch 8)
Barnard and Nix (1979, Ch 16)
Dillion and Hardacher (1980, Ch 8)
Dillion, J.L. and Scandizzo, P.L. Risk Attitude of Subsistence   Farmers in Northeast: A sampling Approach AJAE Vol.    50 Part 3, 1978.
Heyer, J. An Analysis of Peasant Farm Production under Conditions   of Uncertainty, Vol. 23.
Weins, T.B. Uncertainty and Factor Aiiocatign in Peasant Economy.
    Oxford Economic Papers Vol 29. 1979.
Barlett, P.E. Ed. Agricultural Decision Making. GN 448 BAR. (Ch. 8  and 9) 1980.
Roumasset, J.A. and Boussard, J.M. Singh I. Risk Uncertainty and  Agricultural Development, APC,
    1979
Upton, (1987, Ch 5)
Ellis (1988, Ch 5)