Integrated planning model for citrus agribusiness system using systems dynamics

• A simulation model was built to assess the potential gains from an integrated planning of agricultural and industrial production in a citrus agrichain.
• Integrated planning of agricultural and industrial production increases the efficiency of a citrus agrichain.
• Agrisystems models are useful to assess the results of integrated planning in an agribusiness system.
• Improved coordination between agricultural and industrial production can increase the efficiency of the entire agribusiness system.

Integrated planning of agricultural and industrial productions in an agrichain may increase the competitiveness of the entire chain and bring benefits to all of its agents. In turn, systems dynamics models could be used to explore and assess quantitatively these benefits. The main objective of this paper was to build a system dynamics model to assess whether integrated mechanisms of agricultural and industrial production planning can improve the competitive performance of the citrus agrisystem in Brazil. The scenarios tested by the model used the gradual introduction of new orange varieties and technological changes in the citrus production. Our paper considers that changes in these parameters have the potential to provide gains to the system by using the expanded capacity implemented by the industries throughout the year, by reducing inventories and blending operations, reducing costs by eliminating seasonal workers, among other factors. The results achieved from the model indicate that integrated production planning mechanisms can effectively improve the coordination of agro-industrial production systems. Moreover, it was demonstrated that models based on Systems Dynamics are suitable to assess these improvements. The model application and assessment results showed that integrated planning can increase the income per hectare of agricultural producers by 70% and the agribusinesses EBITDA margin by 43%. Thus, this study has shown that the use of integrated planning mechanisms is an important strategy for the Brazilian citrus agribusiness system to exploit its growth potential and to remain competitive.