Investigating Determinants of Adopting Diversified Activities by Dairy Farmers in Shiraz and Marvdasht: A Choice Modelling Approach

The industrial dairy farms in Iran are facing several economic problems and about six percent of these farms were shut down in Fars province due to low profitability. Despite such problems and availability of other enterprises in the region, farmers do not switch to other farm activities. In this context, the factors affecting acceptance of diversification options were investigated in this study applying a choice modelling, data collected randomly from a sample of 100 dairy farms in Shiraz and Marvdasht. The results indicate that profit maximizing and production risk are key elements in acceptance of diversification options. Based on the findings, only a few farmers choose these options, revealing that dairy industry is still the preferred activity, hoping that market conditions will improve.