Activity 20 B : Premium for non-produced milk – Solution

The measure is effective when the payment amount is at least 4 cents per litre. That way, M. Fourhooves produces a lot less milk (320000 L) and his income is slightly higher. He changes feeding type and opts for a “grass-based” diet for his dairy cows, which reduces productivity per cow.

Wheat production increases for he reduces the number of his cows : his maize needs go down and he can therefore decrease production of maize.

Under optimum conditions :

Price of milk 0.27 0.27 0.27 0.27
Premium 0 0.02 0.03 0.04
Dairy cow / « intensive » diet 53.846 53.846 53.846 5.242
Heifer / « intensive » diet 16.154 16.154 16.154 1.573
Calf (sold) / « intensive » diet 32.308 32.308 32.308 3.145
Dairy cow / « grass-based » diet 2.564 2.564 2.564  40.367
Heifer / « grass-based » 0.769 0.769 0.769 12.110
Calf (sold) / « grass-based » diet 1.538 1.538 1.538 24.220
Milk production 402410 L 402410 L 402410 L 320000 L
Wheat 19.977 ha 19.977 ha 19.977 ha 25.377 ha
Maize 10.023 ha 10.023 ha 10.023 ha 4.623 ha
Prairies permanentes 20 ha 20 ha 20 ha 20 ha
Income of the farmer 36923.683 36923.683 36923.683 37037.889

The solution model is as follows : modelEco_fairyFarm_3.gms