Production Risk Advice at Whole Farm Level: Representative Versus Mean Farms

P. W. Botha and J. A. Meiring

Agrekon, 2001, vol. 40, issue 2

Abstract: Farmers are often faced with research results that are inapplicable to their unique situations. However, using representative farms can change this. In this article representative and mean farms are compared on the basis of the number of farmers that can identify with the respective farms as well as the production risk associated with each. Risk was quantified by means of a whole farm simulation model and presented by means of cumulative distribution functions. Results confirm that a significantly larger number of farmers can identify with representative farms than with a mean farm for their area. Most results obtained with the mean farm procedure reflect more risk than those obtained with the representative farms procedure when compared by means of cash flow, farm profitability and own capital ratio variability, and the probability of realizing a negative value. Significant differences therefore occur despite representative and mean farms being formulated from the same data.

Keywords: Production; Economics (search for similar items in EconPapers)
Date: 2001
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Persistent link: https://EconPapers.repec.org/RePEc:ags:agreko:269292

DOI: 10.22004/ag.econ.269292

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