The objective of this work was to determine the effect of family labour on the profitability and competitiveness of small-scale dairy farms in the highlands of Central Mexico. Economic data from 37 farms were analysed from a stratified statistical sampling with a Neyman assignment. Three strata were defined taking herd size as criterion. Stratum 1: herds from 3 to 9 cows plus replacements, Stratum 2: herds from 10 to 19 cows and Stratum 3: herds from 20 to 30 cows. The policy analysis matrix was used as the method to determine profitability and competitiveness. The coefficient of private profitability (CPP) when the economic cost of family labour is included in the cost structure was 8.0 %, 31.0 % and 46.0 %. When the economic cost of family labour is not included, CPP increase to 47.0 %, 57.0 % and 66.0 % for each strata, respectively. The private cost ratio (PCR) when family labour is included was 0.79, 0.51 and 0.42 for strata 1, 2 and 3, respectively. When family labour is not included, the PCR was 0.07, 0.25 and 0.26. Net profit per litre of milk including family labour was US$0.03 l(-1) for Stratum 1, US$0.09 for Stratum 2 and US$0.12 l(-1) for Stratum 3; but increased to $0.12, 0.14 and 0.15, respectively, when the economic cost of family labour is not included. It is concluded that family labour is a crucial factor in the profitability and competitiveness of small-scale dairy production.
A simulation Monte Carlo model was used to assess the economic and financial viability of 130 small-scale dairy farms in central Mexico, through a Representative Small-Scale Dairy Farm. Net yields were calculated for a 9-year planning horizon by means of simulated values for the distribution of input and product prices taking 2010 as base year and considering four scenarios which were compared against the scenario of actual production. The other scenarios were (1) total hiring in of needed labour; (2) external purchase of 100 % of inputs and (3) withdrawal of subsidies to production. A stochastic modelling approach was followed to determine the scenario with the highest economic and financial viability. Results show a viable economic and financial situation for the real production scenario, as well as the scenarios for total hiring of labour and of withdrawal of subsidies, but the scenario when 100 % of feed inputs for the herd are bought-in was not viable.
This article combines a Policy Analysis Matrix with a sensitivity and poverty line analysis with the objective of evaluating the economic contribution of comparative advantages to the private profitability and competitiveness of small-scale dairy systems. For 1 year, socioeconomic data were collected from 82 farms selected from four strata via statistical sampling. Two scenarios were established to determine the quantitative contribution of comparative advantages: (1) a simulated scenario, which accounted for the cost of purchasing the total food and the opportunity cost of the family labour force (FLF), and (2) an actual production scenario, which accounted for the cost of producing food and eliminating the payment of the FLF and included other income. The E3 and E4 producers were the most profitable and competitive in the simulated scenario and actual production scenario. Of the four scales evaluated, the E2 and E1 producers were the most efficient in taking advantage of the economic contribution provided by the comparative advantages in their own production of food and employment of the FLF, in addition to accounting for other income, a condition that increased their profitability by 171 and 144% and competitiveness by 346 and 273%, respectively. The poverty results indicated that only E3 and E4 producers were non-vulnerable in the simulated scenario and actual production scenario. The purchase of food was the comparative advantage with the greatest sensitivity to cost increases in the two scenarios analysed, which exacerbated the effect on the E1 and E2 producers.
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