Irrigation and Potential Diversification Benefits in Humid Climates

Lonnie R. Vandeveer, Kenneth W. Paxton and David R. Lavergne

Journal of Agricultural and Applied Economics, 1989, vol. 21, issue 2, 167-174

Abstract: Income variability and means for managing risk continue to receive much attention in farm management research. In this paper, irrigation is presented as a risk-management strategy that offers potential diversification benefits. Potential diversification opportunities largely result from a wider range of enterprise production activities. A portfolio analysis of dryland and irrigated farm scenarios indicates that income stabilizing and diversification effects of irrigation substantially modify the risk-return position of a typical farm in northeast Louisiana. Safety-first considerations along with Target MOT AD programming procedures also are used to evaluate the impact of irrigation on the farm's financial performance.

Date: 1989
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Persistent link: https://EconPapers.repec.org/RePEc:cup:jagaec:v:21:y:1989:i:02:p:167-174_00

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