1 Introduction

The family milk production systems (FMPS) referred to in this work are operations that happen in individual agricultural production units (APU), with access to relatively small, but not limited land areas, with herds as large that can be managed by the family labor force (^{Apollin & Eberhart 1999}; ^{Wiggins et al., 2001}) whose production is intended for the market. Additionally, at least ideally, family farming should be prosperous and provide the family with autonomy in decision-making without barriers to new producers' entry, particularly young ones (^{Nehring, Gillespie, Sandretto, & Hallahan, 2009}). However, as a livestock activity, FMPS are held responsible for water and soil contamination in intensive production systems, land degradation, and desertification due to overgrazing in drylands and livestock-induced deforestation in the humid and subtropical tropics. In contrast, grazing FMPS has been identified as desirable for causing less contamination than intensive systems, maintaining a higher degree of animal and operator welfare (Nehring et al. 2009), remaining competitive (Ordóñez, 1998) and other attributes such as resilience, flexibility or ability to adjust to changing scenarios (^{Arriaga, Espinoza, Albarrán, & Castelán, 2000}, cited by Wiggins et al., 2001), and to operate with a frequent and continual source of cash. As Espinoza (1999) points out, no other small-scale lawful activity has such a dynamic cash flow.

FMPS to stay productive, profitable, competitive, and environmentally sustainable, must adapt to contextual political, institutional, social, and environmental changes that hinder or promote the satisfaction of their interests and objectives (^{Hellin, Groenewald, & Keleman., 2012}). The strategies to adapt to such changes will result from the interaction between said changes on the one hand and the rationality, location, endowment, and structure of resources and their management capacity, particular to each producer, foreshadowing options strategies very heterogeneous. ^{Dixon, Gulliver, & Gibbon (2001}) cited by Hellin et al. (2012) present categories of farmers' approaches to alleviate or escape poverty:

Intensification, increasing productivity by applying external inputs, labor, or other resources more efficiently, but becoming more dependent on external resources.

Diversification, expanding market opportunities by exercising new products, or adding value to an existing product to increase revenue and reduce risk in exchange for dispersing attention to the operation.

Expansion, expanding the endowment of available resources such as the herd's size or deforesting new areas, with adverse effects on the environment.

Increase in non-farm income, temporarily or permanently employed outside the farm, with reduced attention to the operation, although the revenue generated may be reinvested in agriculture with a favorable effect, or finally

Abandonment of agriculture, disregarding the farm to work in another system, lifestyle, or emigrate.

Addressing the best possible option for both the producer and society is a huge challenge where exogenous factors have a simultaneous impact: from trade and fiscal policy, price policy, inter-sectorial distortions, the factor market (land and wages), public goods, in short, everything that affects the availability and accessibility of resources (^{Osan, 2003}); going through the structure and functioning of the dairy circuit itself: lack of specific policies, absence of international markets, insufficient agro-industrial and commercial development, atomization of production, inter-sectorial disarticulation to end up in the production units themselves. It is evident then that the corrective measures are not disciplinary, nor are the solutions agronomic or financial. As ^{Wiggins, Kirsten, & Llambí (2010}) point out, this approach is relevant because small producers' future may not be in agriculture. However, measures to stimulate the rural non-agricultural economy and provide work to those who leave agriculture -a favorable climate for rural investment, a supply of public goods, institutional development- are mainly the same as encouraging agricultural development.

It is not enough to describe the different types of farms. The diagnosis, as proposed by ^{Apollin & Eberhart (1999}), must allow understanding of the "why" of what is observed and identify the "cause-effect" relationships from the perspective of diversity, heterogeneity of strategies, and the interests of the actors, allowing the formulation of differentiated proposals for each type of producer based on qualitative criteria of homogeneity.

In the first publication of this series, ^{Carrera, Fierro, & Ordóñez., (2017}) used multivariate techniques to explain the variability of the FMPS and form homogeneous groups to make harmonious recommendations with each group's particularities. Satisfaction, Risk affinity, and Determination were the factors extracted through factor analysis, traits that allowed discriminating through the analysis of conglomerates, three types of producer: Conservative, Pragmatic, and Innovative are the expression of different economic rationales.

Identified the categories that group the FMPS in the Ecuadorian Amazon, this work's objective was to explain the structure and differentiated functioning of the categories and quantifies them to identify intervention needs and, if necessary, make harmonious recommendations with the particularities of each group.

3 Results

4 Discussion

Contrasting the results obtained in Centinela del Cóndor with other works published in Latin America, or even in the Ecuadorian Sierra itself, is complicated due to the diversity of the integration of the dairy chain (FAO-FEPALE, 2012). The average size of the farms, the meaning of "small family producer," the chain's organization to the consumer, the destination of production, and the relationship between the producer and the industry, are aspects that contribute to the heterogeneity. To this is added the diversity of methodologies applied by the different schools.

4.2 Productive performance

Regarding the productive performance, the large differences (P <0.05) in the duration of the calving interval and the disparities (P <0.1) in production per lactation translate into a notable advantage in milk production per cow per year of the Innovative group over the Pragmatic and Conservative groups. An even more notable difference (P <0.05) is found in milk production per hectare and per year, since the Innovator group surpasses Pragmatic by 172% as a result of the simultaneous effect of higher milk production per cow per year and lower surface available per UVR of the first, which is explained, at least partially by the greater use of working capital in the Innovator group.

4.3 Production costs

The fact that Innovator exceeds in Animal Units per hectare (AU/ha), application of fertilizers, cleaning of electric fences, and control of weeds, although it has less surface area, could explain part of the superiority (P<0.01) of the expenditure on maintenance of fences and paddocks. The reduced amount for this concept of Pragmatic and Conservative is because fences and paddocks' maintenance is limited to manual control of weeds. That amount is attributed to labor, being the area per Conservator farm greater.

Although the differences in C.ISO do not reach a significance level (P>0.1), the difference in the amount used is noticeable, where Innovator almost doubles the other two categories. The main component of C.ISO is the cost of feed for cows, represented almost exclusively by the mineral supplement. These results confirm the appreciation of ^{Espinoza, Álvarez, Del Valle, & Chauvete's (2005}), who conclude that the costs generated by feed within livestock activities and specifically in milk production constitute the most component (Espinoza et al., 2005).

The opportunity cost of Family Labor was notably lower for Conservative than Pragmatic and Innovative, confirming that a high level of satisfaction induces not to apply mire family labor to increase income, even at the expense of not milking all lactating cows. According to ^{Jiménez, Espinoza, & Soler (2014}), family labor is one of the variables that negatively influence production units' profitability. ^{Zhunaula (2013}) analyzed the costs of milk production in family units in the same province of Zamora Chinchipe, reporting a participation value that was vastly higher than that reported here.

The amount of the interest paid due to the purchase of livestock, Taxes, and Insurance paid for the same livestock speaks of the affinity to the risk and the expectations of Innovator's genetic improvement.

4.4 Economic results

The low proportion of income from milking results from low milk production and little interest in meat production, as evidenced by the young bulls' selling age. The low number of heifers sold is due to the simultaneous effect of a low weaning percentage, a high percentage of heifer mortality, and a high rate of replacement of cows.

Gross income per cow was higher in the Innovator group (P<0.1) due to the higher production/cow/year. This higher income per cow for Innovator is not reflected in a higher Gross Margin/UVR (P>0.1), Gross Income minus cash outflows / UVR (P> 0.1) or Profit / UVR (P>0.1), as a consequence of the greater amount of cash allocated to inputs and services, mostly variable costs and of course monetary from Innovator. These results contrast with studies by ^{Robison & Barry (1987}) and ^{Torero (2010}) cited by ^{FAO (2014}), for whom a decrease in the demand for inputs causes lower expectations of profitability and lower levels of production.

The Profit per cow (P>0.1) was negative for the three types, although more favorable for Conservative, which employs very little labor, particularly family labor, as indicated above. 23 out of 27 (85%) of the producers presented negative Profits.

The return rate to working capital was negative for the three typologies, without the differences between them reaching significance levels (P>0.1). However, it was more favorable for Conservatives. These results confirm the conclusions of ^{Arias et al. (2011}), Arias & Vargas (2010), and ^{Cafferata (2010}), that profitability will depend on how both the prices of final products and the prices of agricultural inputs evolve and how intensive is the use of inputs.

5 Conclusions

Grazing FMPS are valued as less polluting than intensive systems, meet the animal and operator welfare requirements, remain flexible to adjust to changing scenarios, and provide frequent cash to the household. In extensive pasture areas existing in the Ecuadorian Amazon, cattle breeder communities have been intentionally attracted through colonization policies. Today, they represent a good part of the economically active population. They have the infrastructure; provide meat, milk, and environmental services to the community. They consciously link to the consumer through an elementary dairy chain and do so with satisfactory results.

To alleviate or get out of poverty, farmers adopt different strategies with opposite consequences for the environment, the economy, society, and culture. Faced with the options of Intensification, Expansion, or Abandonment of agriculture, one cannot be indifferent.

Formal dairy enterprises such as cooperatives are examples of what the private sector can do to boost the region's dynamism and contribute to its suppliers' well-being. Receipt guarantee, known price, timely payment, quality bonus, and technical support have been, with the ups and downs of agriculture, highly significant contributions, as evidenced by the progress made by producers organized around their collection centers. Under the prevalent scenarios in Centinela del Condor, with a formal market guarantee, milking is competitive.

The methodology used allowed describing and comparing the different typologies of farms detected by applying multivariate methods. For its part, the economic analysis technique by preparing a budget to analyze the dairy economy is simple. Costs and income are detailed to summarize financial results that are of value to the producer and compare companies' performance from different areas, systems, scales, and rationales. The methodology requires elementary accounting records or producers aware of the inputs and products of their activity.

It is appropriate to recognize that the figures obtained are difficult to compare with previous work. In addition to applying different accounting methodologies, they deal with production systems that differ in rationality, location, endowment, resource structure, and management capacity.

From dairy farming exclusively, the identified conglomerates are not differentiated, productively, or economically; only some incorporated techniques make the difference. In the Innovative group, different producers individually incorporate some innovations. The changes contribute to the same proportion to costs and income without affecting Profit, although they improve working conditions. The poor results lead to their interruption, the absence of diffusion, and the attempt of different novel options in an itinerant trial and error process.

The growth of family dairy in the Ecuadorian Amazon is limited by the lack of a market for milk and the absence of technology that mitigates the severity of hard work and increases labor productivity. The option is not to expand the area to milk more cows but to increase the yield of forage crops to reduce grazing land and liberate marginal terrain with steep slopes and fragile soils. To do so requires integrating the application of knowledge to the economy.

The application of the results in the selection of the intervention strategies goes through 1) recognizing the differences of interests and objectives of the families and their resources; 2) use the Innovator group's natural curiosity, risk affinity, and credit experience to establish demonstrative trials on the farms themselves; 3) to test "families" of complementary practices, including those of economic management; 4) favor the manifestation of the properties that determine the adoption rate of the innovation: relative advantage, compatibility, complexity, verifiability, and observability (^{Rogers, 2003}); 5) facilitate subjective evaluation by the Pragmatic group; to finally synthesize coherent technological arrangements.

The economic analysis allows us to identify the production strategies applied by each typology; however, it is necessary to analyze marketing options (^{Posadas et al., 2014}). Some producers divert part of the milk produced to other destinations as a risk reduction mechanism, margin increase, or simply place the product from evening milking.

Finally, in terms of trade openness, the recommendations made by ^{Salgado (2007}) remain in force, only now more urgent: "Any internal schema implemented must seek to adapt producers to more open market conditions, make more efficient domestic production, expand opportunities for products with exportable potential, increase yield to lower unit costs, focus assistance policies on small producers."

Conflicts of Interest

All the authors made significant contributions to the document, and those who agree are its publication and state that there are no conflicts of interest in this study.

Part of this work was submitted to the "2nd National Agro economic Research Contest" sponsored by the Ministry of Agriculture, Livestock, Aquaculture, and Fisheries (MAGAP) held in Quito, Ecuador last November 2016, resulting in first place winner in the Master's category.

Acknowledgment

This article is part of the research project "Promotion of technological change in bovine livestock in Loja and Zamora Chinchipe" funded by the Secretary of Higher Education, Science, Technology, and Innovation (SENESCYT) and the Technical University of Loja (UTPL), Ecuador.