Strategic multicriteria decision-making process in agriculture

Abstract

The annual plantations in agriculture do not require large investments; therefore financial yields with this type of investments are limited. On the other hand, investment in perennial plantations, such as walnuts, hazelnuts or apples can be significantly higher, but the ROI or the return on such investment is therefore much higher than those on classic crop production. Making complex strategic decisions in agriculture, like whether to invest in an annual or move to perennial plantations, has been out of the sight for economic theorists for a long time. Therefore, the scientific contribution of this article is an effective use of a hybrid model that combines a quantitative method-such as the Net Present Value (NPV), and a qualitative methodsuch as the Analytical Hierarchy Process (AHP) in a multicriteria decision-making environment which proved that choosing the perennial plantations is a better long term investment strategy then the classic crop production.

A Fahp and Vikor Method for Evaluation of the Financial Performance of Agriculture Companies Listed on the Belgrade Stock Exchange

“…Much of the research uses the AHP method in the first phase, to address the priority weights of criteria used by FAHP (Meixner, 2009, Knežević et al, 2017, and in the second is specifically tailored to the objectives of the work in different fields of observation. Various problems in agriculture were discussed using the AHP model (Bogdanović & Hadžić, 2019;Ali et al, 2021;Veisi et al, 2022). One of the papers describes in detail the potential of the AHP method in choosing the best alternative in the decision tree with multiple criteria (see Brožova, 2004;Kong et al, 2005), especially emphasizing the importance of both the AHP method and other mathematical methods for decision-making processes in agricultural practice.…”

Evaluation of rapeseed varieties using novel integrated fuzzy PIPRECIA – Fuzzy MABAC model

“…Rozman et al [14] used the DEX method (Decision EXpert) to evaluate dairy farms in Bosnia and Herzegovina. Bogdanović and Hadžić [15] performed a strategic analysis of investments in agriculture using the AHP method and found that perennial plantations are a better long-term investment strategy than conventional crop production.…”

Determinants for the viability of small-scale family farms in Serbia: an example of the use of a multi-criteria assessment tool

“…Besides, some authors addressed the AHP to the agriculture in Central and Eastern European countries. Bogdanović and Hadzic (2019) used Net Present Value and AHP when investigating Serbian farms to prove that choosing the perennial plantations is a better long-term investment strategy than the typical crop production. Huehner et al (2016) claimed that organic fruit, wine and horticultural production seem to be the most important agri-environmental measures in Slovenian agriculture.…”