Abstract

ABAUNZA OSORIO, Felipe; ARANGO ARAMBURO, Santiago  and  OLAYA MORALES, Yris. Simulation of Investment Strategies for Small Coffee Farmers in Colombia. Rev. Fac. Nac. Agron. Medellín [online]. 2011, vol.64, n.2, pp.6277-6290. ISSN 0304-2847.

Coffee farming is the main source of income for more than half a million peasants in Colombia. These small farmers are exposed to the high volatility of coffee price which causes fluctuations in their income and which is an obstacle for making good investment decisions. In addition, small farmers have no tools for formulating and evaluating investment strategies or for assessing the impact of such strategies in their income. We propose and discuss alternative investment strategies for small coffee farmers. These strategies are based on Porter's generic strategies and on diversification strategies. To evaluate the long-run effect of alternative investment plans in farmers' income, we build a system dynamics simulation model, and run it under several price scenarios.

Keywords : Coffee market; investment strategies; simulation; system dynamics.

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