Policy and risk implications for an individual grain farm

Jim Dayton and E. Dean Baldwin
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Jim Dayton: Agricultural-Industry and Agricultural Computer Applications, Ohio Cooperative Extension Service, Postal: Agricultural-Industry and Agricultural Computer Applications, Ohio Cooperative Extension Service
E. Dean Baldwin: Department of Agricultural Economics and Rural Sociology, The Ohio State University, Postal: Department of Agricultural Economics and Rural Sociology, The Ohio State University

Agribusiness, 1989, vol. 5, issue 2, 181-195

Abstract: Farmers should include risk in their marketing, management, and financial plan. This article describes a conceptual model of risk and a microcomputer model, presents output for a hypothetical farm and examines the effects of agricultural policy and futures price, basis and crop yield risk on the financial probability distribution. The model should be solved for specific farms; conclusions should not be based on averages. Although participation in agricultural programs improves the financial position for a farm, price signals among grain are distorted causing a misallocation of resources. Financial survival distributions vary with size of risk coefficients.

Date: 1989
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Persistent link: https://EconPapers.repec.org/RePEc:wly:agribz:v:5:y:1989:i:2:p:181-195

DOI: 10.1002/1520-6297(198903)5:2<181::AID-AGR2720050209>3.0.CO;2-D

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