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Abstract

The aim of the paper is to develop an optimization model to support the analysis of decision-making on Macedonian family farms. For this purpose, normative linear programming paradigm is applied, utilising its optimization potential. The model is tested and presented on vegetable farm level. Hence, the model provides optimal vegetable productions plan, taking into consideration relevant technological and resource limitations faced by the farm. The results are given in base scenario format and are compared with the optimum production plans within the alternative model scenarios. The optimal production structure in all scenarios indicates that the optimal solution is given on production of tomato, pepper, cabbage, carrot and bean, thus corresponding to the most frequent types of vegetables in the Macedonian agriculture. The optimal production plan also confirms the diversification as a characteristic of the Macedonian agriculture. The base scenario reveals a total net return over the variable costs of 17,924 € which is highest compared to other scenarios. The working capital available is a binding constraint in second and third scenario, where the optimal solution reveals that the land resource is not exhausted i.e. an arable land of about 3 ha remains. Furthermore, the analysis of the crop rotation reflects the seasonal character of the vegetable production. Gross margin sensitivity was examined using the working capital parameterisation. The model is quite flexible thus enabling different crop enterprises to be added additionally.

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