An Empirical Approach for Optimizing the Production Structure of a Farm Operating in a Mountain Area
An Empirical Approach for Optimizing the Production Structure of a Farm Operating in a Mountain Area

Summary/Abstract: This study analyses the effect and the impact of Common Agricultural Policy (CAP) subsidies on the production structure of a selected agricultural enterprise operating in a mountainous area. Оn the bases of mathematical model of the economy is to optimize the gross margin and the farm profit by allocating available resources according to the restrictions imposed. During the process of solving them, we considered into account many complex factors and dependencies. It is concluded that subsidies received under CAP have no impact on the structure of production. The article presents one case from which no general conclusions can be drawn about the effect of CAP subsidies on all farms. When applying the model in practice, it should be borne in mind that the model results have a number of conventions, which is a challenge for managers not to make hasty decisions based on the optimization of the task's solution.

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