Optimization of Agricultural Resource Allocation among Crops: A Portfolio Model Analysis

Bao-Li Miao, Ying Liu (), Yu-Bing Fan, Xue-Jiao Niu, Xiu-Yun Jiang and Zeng Tang
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Bao-Li Miao: School of Management, Lanzhou University, Lanzhou 730000, China
Ying Liu: School of Management, Lanzhou University, Lanzhou 730000, China
Yu-Bing Fan: College of Pastoral Agricultural Science and Technology, Lanzhou University, Lanzhou 730020, China
Xue-Jiao Niu: School of Management, Lanzhou University, Lanzhou 730000, China
Xiu-Yun Jiang: School of Management, Lanzhou University, Lanzhou 730000, China
Zeng Tang: College of Pastoral Agricultural Science and Technology, Lanzhou University, Lanzhou 730020, China

Land, 2023, vol. 12, issue 10, 1-18

Abstract: The portfolio model provides a new framework that enables farmers to make tradeoffs between the returns and risks of agricultural production. However, it has only been used in cost allocation among resources and in farmland allocation among crops at present. Thus, we conducted a portfolio model analysis based on an independent, mixed cross-section of data accounting for 1650 rural households in Minqin county, China, over a timescale of three years; the goal was to explore the feasibility and actuating extent of the portfolio model in optimizing the allocation of agricultural resources among crops other than farmland. The results showed that, by optimizing resource allocation among crops using a portfolio model, the return per unit resource of farmland, water, and labor increased by CNY 4.03 thousand per hectare, CNY 0.38 per cubic meter, and CNY 39.75 per day, without increasing risk, and with corresponding increases in use efficiency of 14.64%, 9.25%, and 13.55%, respectively, in the study area. Therefore, the portfolio model is a good tool for agricultural resource allocation optimization. Policy makers can manage agricultural resources according to their risk preference using this model. This study provides new insights into agricultural resource allocation and critical empirical evidence for return and risk management, as well as resource use efficiency improvement in agricultural production.

Keywords: agricultural resources; resource allocation; portfolio model; risk management; resource use efficiency (search for similar items in EconPapers)
JEL-codes: Q15 Q2 Q24 Q28 Q5 R14 R52 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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