Rural farm households typically integrate a variety of economic activities, both on and off-farm, which may be complementary, but which also compete for family labour, land and other resources. Household decisions on resource allocation therefore are complex. In order to provide improved decision support at household level, the Pro-Poor Livestock Policy Initiative (PPLPI), in close collaboration with the International Farm Comparison Network (IFCN), is adapting the latter’s dairy household model, TIPI-CAL, to small-holder enterprises.

TIPI-CAL is the abbreviation of “Technology Impact and Policy Impact Calculation Model”. The model has been extensively used by IFCN as tool for the economic analysis of diverse farming household types world wide. It is a deterministic, dynamic farm-level production and accounting model covering a time horizon of up to ten years. The model accounts for all economic activities within the household, at farm (e.g. dairy, crop, and other farm enterprises such as goat and sheep rearing or fish farming) and off-farm levels. Income and cash flows from off-farm activities are included to provide the full picture of the household’s economic situation.

Version 4.0 is a significant step forward to better represent the complexity of small-scale farms as it can take into account non-cash transactions and a wide range of non-agricultural activities. The model can represent five different categories of family labour, various types of farm assets, up to ten off-farm activities, and six types of living expenses. The user can further specify the share of returns used for home consumption. The model is particularly detailed for the dairy enterprise, options for which include ten different animal types, three different milk marketing channels, fourteen variable cost positions per cow, etc.

The household model offers great flexibility in the conduct of ten-year household strategy analyses with regard to changes in non-farm / farm activity parameters, household asset management, living expenses, capital inflow and outflow as each input variable can be changed in any year of simulation. IFCN’s experience in farm strategy analysis has shown that nearly all plausible farm strategies (e.g. farm growth, alternative production system) can be evaluated.