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Nygren, Richard, 2011. Farmers´ decisions factors : a case study. Second cycle, A2E. Uppsala: SLU, Dept. of Economics

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Abstract

This study examined the factors influencing dairy farmers´ decisions to invest in automated milking systems (AMS). The problem studied involves uncertainty, information and complexity for dairy farmers in specific decision contexts. The frame of reference in the thesis combines contingency theory and decision theory and is used in a qualitative analysis of a set interview with dairy farmers who have recently bought an AMS and salespersons from Delaval, one of the AMS suppliers.

The aim of this study is to develop an understanding of the decision making processes of dairy farmers, and in particular to identify which types of factors influence the outcome of an investment decision in the technological development of a farm.

The study uses Thompsons` (1967) theory about the structure that organizations develop to handle the input of information. Thus, interest is focused on how a farm business structure handles information in the AMS decision, investigating the differences in information with Delaval’s "feed first principle" system and Lely’s "free cow traffic" system.

The results of the qualitative interviews with the dairy farmers who bought an AMS show that there are three important factors that influence the outcome: employees, suppliers and the owner. Results of the qualitative interviews with the salespersons show that the salespersons are aware of the factors that are important to the farmers.

Of the three main factors influencing the outcome of the decision, the role of employees was particularly evident. An employee milking cows is perceived to require more resources than an AMS. Having employees is costly, so the dairy farmer is interested in developing his operation into a more cost-efficient operation.

Lely’s free-feed system does not have a specific order in which cows have to proceed, but with Delaval’s feed first principle there are specific orders that must be followed. Thompson’s theory suggests that this will lead to differences in how the organizations are structured, whereas in the case of Delaval, the dairy farmer must contend with more information than he does in the case of Lely.

The study concludes that farmers have different relations with the suppliers in the market, and that farmers believe in different milking systems. These factors influence the decisions made by farmers, which in turn effect change to the structure of organization. In the end, it comes down to a question of the system in which the farmer believes : either it will be necessary to handle more information in a more complex organization or handle less information in a less complex organization. Delaval’s salespersons are well aware of the factors that influence the farmer’s decision to invest in an AMS, but perhaps do not fully recognize why farmers choose the specific AMS system.

Main title:Farmers´ decisions factors
Subtitle:a case study
Authors:Nygren, Richard
Supervisor:Ferguson, Richard
Examiner:Hakelius, Karin
Series:Degree thesis / SLU, Department of Economics
Volume/Sequential designation:648
Year of Publication:2011
Level and depth descriptor:Second cycle, A2E
Student's programme affiliation:1010A Agriculture Programme (admitted before July 1, 2007) 270 HEC
Department:(NL, NJ) > Dept. of Economics
Keywords:dairy cow, contingency, decision factors, AMS, dairy farmer
URN:NBN:urn:nbn:se:slu:epsilon-8-1055
Permanent URL:
http://urn.kb.se/resolve?urn=urn:nbn:se:slu:epsilon-8-1055
Subjects:Organization, administration and management of agricultural enterprises or farms
Economics and management
Language:English
Deposited On:01 Apr 2011 06:51
Metadata Last Modified:20 Apr 2012 14:18

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