Where unit values of the costs are not available, costs have been adjusted with the Consumer Prize Index to take account of inflation. Up to date statistics for meal feed, pasture, molasses, land rental, milk price, calves and cull cows are available so they are used in this form in the calculations. Because of the nature of milk production, export value cannot be precisely determined in border prices. This is because farmer returns is not only the value of milk sold but also include the value of calves and cull cows sold. As such, export value is calculated as follows.
Australian dollar is used as border price as currently Australia is Fiji s major trading partner.
Milk yield per lactation is 1309 litres for Farm Model 1 while 1140 litres for Farm Model 2. The DRCs and CAIs obtained from Tables 5 and 6 are presented in table 7. The reason for the inefficiency of farm model 1 has to do with costs and in particular the high cost of meal feed. To determine whether devaluation would improve the competitiveness of milk production the following assumptions were made. The results obtained with the above amendments are presented in table 8.