Economics of Animal Production

General Foundation

After completing this course, the students will be able: - to understand the basic concepts of production and cost theory and how they affect the profitability of a farm, - to understand of how micro-economic methods can be used to analyze problems in animal production, both at farm level and/or sector/area, - to demonstrate basic knowledge about organization and administration of a farm, - to demonstrate knowledge about the use of capital in the agribusiness, - to apply basic methods of investment projects evaluation in different types of farms, - to demonstrate knowledge about basic tools for controlling and evaluating a farm.

Animal Production Economics (Theoretical lectures 20 hours) Teaching staff: Christos Batzios, Alexandros Theodoridis The main objective of this course is to introduce the basic concepts and principles of the science of agricultural ecomonics, which are implemented for the organization and management of a livestock farm or/and a veterinary unit. Emphasis is given on the presentation of basic principles of theory of production and cost, on the capital use, as well as on the planning and controlling a farm, in order to support rational decision making. 1st-2nd hour Introductory concepts in animal production economics • Concept, definition, content, objectives •The basic measures of an economy (GDP, GNI, NI, etc.) • The concept of added value • Investments and capital formation • Constant and current prices of economic variables, price indices 3rd–4th hour The livestock sector • The sectoral development of animal production • The farm structure in Greece • Measuring inequality in livestock sector (Lorenz curve, Gini coefficient) • Basic features in aquaculture 5th-7th hour Basic elements of the theory of production • The production function of animal products, production optimization • The factor-product relatioship, the stages of production, the elasticity of production • The factor- factor relationship, the substitution of production factors • The Cobb-Douglas production function • The farm’s expansion path 8th-9th hour The theory of cost • Cost and its basic principles, identification of costs • The short-run and long- run cost of production • The economies of scale • Maximizing the profit in agribusiness Findings from the literature of theoretical economy: • The break-even product • The unprofitable rate of an animal production unit 10th-11th hour Calculus of cost in animal production units • Estimating the cost of mechanical equipment (fixed and variable cost) • The cost of building and infrastructure • Labor cost • Μethods of depreciation • Elemenets of farm evaluation 12th hour Methodology of farm planning • The whole farm budget • The partial budget, break even budget • A cash flow budget • Linear programming 13th-15th hour Capital and its use in agriculture • Definition and types of capital • The principle of increasing risk in animal production • Cost of borrowing and methods • Time value of money (present and future value) • Types of loans, methods of loans repayment 16th-17th hour Control of the agribusiness • The Balance Sheet • The economic results of a farm • The Income Statement • Financial Statements and control of a farm • Ratio analysis (Liquidity ratios, Solvency ratios, Activity ratios, Profitability ratios) 18th hour Investment Analysis in animal production • Types of investment • Methods of evaluating investment plans 19th-20th hour • The Common Agricultural Policy • Principles of the Common Agricultural Policy (CAP), implications in the livestock sector • Marketing of livestock products, concept of comparative advantage, animal production and uncertainty • Use of credit in agribusiness Practicals (16 hours) 2 hours • Measuring inequality in livestock production sectors • Estimating the self-sufficiency rate of animal products, etc 2 hours • Applications of cost estimation of animal products, calculation of annual expenses of fixed capital, etc • Estimating capital cost, applications on time value of money in agriculture 2 hours • Calculus of depreciation • Use of methods of loans repayment • Compiling budgets (whole farm budget, partial budget, break even budget, cash flow budget). Short-run analysis 2 hours • Compiling and analyses of Income Statements and Balance Sheets • Investment projects evaluation of different types of farms. Long-run analysis

Animal Production Economics, Theory of production & cost, investment analysis, capital use, control of agribusiness, CAP

26-11-2020