Determination of the crop mix of a rubber and oil palm plantation—A programming approach

Abstract

This paper sets out a multi-period multi-objective linear programming model developed to capture as accurate as possible, the complex relationship between factors of production and the constraints operating on these factors of production for a perennial crop plantation. The primary objective is to provide a tool to determine the optimal crop mix under conditions of price uncertainty. Information necessary for the firm's capital budgeting can be simultaneously derived. Uncertainty is accomodated in a linear risk constraint in the model and the level of uncertainty is parametrised to obtain the efficiency frontier. To illustrate the methodology developed, the paper analyses investment alternatives in a Malaysian plantation. Sensitivity analyses were performed on the usage of factors of production as well as rate of export duty the firm has to pay. Such analyses are useful for intertemporal production planning under conditions of uncertainty.