The Objectives and Priorities for the Azorean Dairy Farmers’ Decisions - The Agricultural Economics of the 21st Century - page 148

Table 10.4 Weights of multiutilities functions for the different grazing systems
W 1 W 2 W 3 W 4 W 5

10 13

Group I Research I 1 2.521 0 15.36 n.a.

10 11 Group I Research II 0 0.8 3.6 0 2

Group II Research I 20.47 0 11.7 0 n.a.

Group II Research II 0.15 0.02 2.8 0 0.97

3.77 10 15 Group III Research I 0.73 2.967 0 n.a.

10 3 Group III Research II 0 11.7 0 0.41 3.9

Source : Research I—The author's findings; Research II—Silva and Berbel ( 2004 )
Legend : Profit maximization— W 1 , Risk minimization— W 2 , Seasonability minimization— W 3 ,
Hired labor minimization— W 4 , Deviations to the goal of total labor minimization— W 5

The normalized utility functions show major importance of seasonality labor in
the Groups I and II. The Group II is the only one that shows some importance for
profit maximization. The Group III shows a major importance in the risk
minimization.
Table 10.4 shows the comparison of this model (namely research II) with a
previous research (namely research I) of Silva and Berbel ( 2004 ) which had four
objectives (profit maximization, risk minimization, labor seasonality minimization,
and external labor minimization) in the dairy farm decision making. The actual
model includes the same four objectives, as the Silva and Berbel ( 2004 ), plus the
deviations to the goal of total labor minimization. The results demonstrate less
importance in profit maximization (W1) in the research II. Besides this situation, in
the research developed by Silva and Berbel ( 2004 ), the Group II has a bigger weight
in the profit maximization comparing with other objectives but the importance of
profit maximization failure in the other Groups (I and III).
The low importance of profit objective maximization is unusual, because it was
expected that the traditional objective would be more important. But this situation
was already observed in previous works (Rodr´guez Oca˜a 1996 ; Amador
et al. 1998 ; Silva and Berbel 2004 ). It may be explained, in part, by the imperfect
Azorean information systems that constrain a risk aversion decision of their dairy
farms, and also, because the amount of grant that dairy farms receive in Azores.
The great importance of farming labor can be explained by family farms which
generally comprise small areas and there is no alternative labor market in Azores.
The dairy farms' income (including the subsidies received by European Union)
can be enough to maintain the farm and family. If the economic objectives are
satisfied, then the farmers can satisfy other objectives. Tauer ( 1995 ) noted that the
main objective that constrains the decision making processes may be the production
cost minimization. However, there might be other factors (not economical ones)
that constrain the decision making process.