John L. Dillon

Risk Attitudes of Subsistence Farmers in Northeast Brazil: A Sampling Approach

The risk attitudes of samples of small farm owners and sharecroppers in Brazil were investigated. Data were derived by posing two sets of simple, realistic mind experiments involving choice between risky and sure alternatives. In the first set, the farmers total income was uncertain but his subsistence need was assured; in the second set, his subsistence needs also were at risk. Comparison of the distributions of the estimated risk attitude coefficients for the two tenure groups and for the cases of subsistence assured and subsistence at risk implies that owners and sharecroppers may react differently to risk, and that poor peasants may react differently within an expected utility context depending on whether or not there is uncertainty about the satisfaction of their subsistence needs. Most peasants were found to be risk adversive; risk aversion tends to be more common among small owners than among sharecroppers. Level of income and other socioeconomic factors influence peasants attitudes toward risk. It is concluded that it is possible via a simple questionning technique to elicit meaningful information on peasant attitudes that are pertinent to rural development.

Allocative Efficiency, Traditional Agriculture, and Risk

A decision theory approach is presented for the assessment of allocative efficiency from cross-section production function estimates. Reappraisal of some of the evidence previously adduced gives only mixed support to the hypothesis of profit-maximizing behavior by farmers in traditional agricultures. It is suggested that scope remains for investigation of the alternative hypothesis of utility maximization which, unlike profit maximization, explicitly allows for subjective risk considerations and might therefore provide a more realistic basis for policies aimed at the modernization of traditional agricultures.

Assessment of production risk in grazing models

Abstract This paper presents a series of Monte Carlo computer experiments designed to determine the effect of irrigation, stocking rate and lamb drafting weight on the profitability and productivity of a sheep grazing enterprise. The experiments were performed on a hypothetical farm in the Canterbury Plains of New Zealand. Pasture growth parameters were estimated based on a 21-year series of monthly measurements and were used to introduce production risk into the model. The paper demonstrates that, independently of the risk atittude of the producer, it is important to account for the stochastic nature of the environment in an agricultural management model.

The economics of systems research

Abstract There are three broad aspects of Systems Research worthy of particular consideration by professional personnel earning their keep within or about the agricultural research system. I will discuss these three aspects seriatim. The first is the conjecture that the systems approach constitutes a technological change in our mode of thinking about the world of such magnitude as to imply that we are now moving from one sociotechnical age to another. The second aspect, a corollary of the first, is the use of the systems approach as a framework for the selection of research programmes. The third , which also follows from the first, is the efficiency of conducting research on a systems basis. Many would think of this last aspect of efficiency as constituting ‘the economics of systems research’, but I believe the systems approach, via the first two aspects I have mentioned, has far wider implications of economic import for agricultural research.

Development of agriculture in Ethiopia since the 1975 land reform

A stated objective of the Ethiopian Government since it came to power in 1975 has been to increase the production of crops for both domestic consumption and export. Consequently, a number of plans and programs have been proposed and implemented to bring about such development in Ethiopian agriculture. This paper mainly focuses 011 a macro review of the general course of Ethiopian agricultural development since the land reform of 1975. The food production in Ethiopia has lagged behind the population growth as evidenced by the gap between the growth rates of population (3%) and food production (1.8%) over the period from 1970 to 1983. Recently, this situation has, perhaps, further deteriorated. Seventy-one percent of the total land mass is estimated to be suitable for agriculture, but only about 19% is cultivated. This suggests an underutilisation of land. Moreover, Ethiopia has a persistent subsistence production problem in agriculture. Agricultural research and education which are essential to development have not been given due attention by the policy makers. As a result, the agricultural technologies used by farmers have changed little in this century. Moreover, small-scale farmers, although still the most potent economic force in the country, have not been given the incentives necessary to expand production, and currently receive less than adequate support from the central government. Some 85%, 50%, and 79% of total agricultural credit, fertiliser and improved seeds respectively go directly to socialist enterprises (state farms and producers cooperatives) which, up to 1985, have jointly accounted for only 5% of the total cultivated land and 4% of the national crop production. The favouring of large-scale and capital-intensive state-owned farming enterprises with credit, subsidies, and fiscal incentives, while neglecting smallholders, has contributed to the stagnation of agricultural production in Ethiopia. Overall, the analysis indicates that there has been no significant development of agriculture in Ethiopia following the 1975 land reform.

Economic Considerations in Response Research

The general neglect of economic considerations in response research is noted. Following the listing of several factors which influence investment in response research, a framework is developed in which knowledge of a process is viewed in terms of the expected value and variance of profits. A Bayesian scheme for incorporating additional information in posterior analysis is outlined. Worth of additional information is judged in terms of utility. The scheme is used to show how the value of obtaining additional information can be ascertained ex ante in preposterior analysis by way of a Monte-Carlo approach. Both posterior and preposterior analyses are illustrated through a soybean-fertilizer process. In this empirical example, the effects of using different experimental designs of varying size are examined.

International Agricultural Research Systems

Technical change and the research processes that so importantly underlie much such change have been under accelerating scrutiny by agricultural econxad omists in recent years. Hardly an issue of the journal Agricultural Economics appears without featuring new reports of the endeavours of economists in furxad thering understanding of the economics of agricultural research. This Special Issue brings together several papers that relate to the general theme of agricultural research, particularly its international dimensions but not to the neglect of national activities. The late 1980s are and the early 1990s surely will also be a period of active ferment concerning policies for investment in agricultural research. The Consultative Group on International Agricultural Research ( CG IAR) is, for instance, in the process of considering its expansion to include a much wider set of activities than it has encompassed to date via its existing 13 International Agricultural Research Centres (IARCs) which have constituted a fairly stable system in recent years. It is thus an appropriate time to reconsider some of the many issues that policy makers must deal with in considering investment in agricultural research, whether of national or inxad ternational orientation. While donor-funded international agricultural research is surely tremenxad dously significant in itself and as a catalyst, and represents considerable onxad going investment of the order of about US

A linear programming algorithm for determining mean-Gini efficient farm plans

300 million annually, it is still small relative to the aggregate of investment in national agricultural research programs. It is thus appropriate to set the scene in this Special Issue by rexad viewing the recent and present structure of public support for agricultural rexad search in national systems. Pardey, Kang and Elliott draw on recently assemxad bled data of a relatively comparable nature to examine several features of a considerably sized sample of National Agricultural Research Systems (NARS ). Several hypotheses have been advanced about the organisation and structure of NARS, and these are examined in their cross-sectional tabulation of sumxad mary data about the size and importance of research expenditures in countries of diverse size and agro-ecological setting. While some countries are spending what seem to be considerable and inxad creasing amounts on research, many others languish with small and weak sys

Efficiency of small-scale farmers in Ethiopia: a case study in the Baso and Warana sub-district

A linear programming algorithm is presented for determination of farm plans that are efficient under the mean-Gini criterion. Use of the algorithm is illustrated by applying it to a standard problem from the literature. The set of efficient plans is compared with those based on meanvariance and MOTAD analysis of the same problem.

Impact of fertilizer use on production and cash income of small-scale farmers in the highland areas of Ethiopia

Belete, A., Dillon, J.L. and Anderson, F.M., 1993. Efficiency of small-scale farmers in Ethiopia: a case study in the Baso and Warana sub-district. Agric. Econ., 8: 199-209. The objective of this study is to explore the possibilities of improving production and income on small farms through better allocation of resources. It pertains to the area that represents the low potential cereal crops zone (LPCZ) of Ethiopian highlands in the Shoa region. The basic primary data were drawn from 50 randomly selected farms in the area, and secondary data were obtained from ILCA. LP and MOTAD are used as analytical tools. The results of the study indicates a substantial potential for increasing net farm cash incomes by efficient allocation of available resources under current level of technology. The study further revealed that small-scale farmers in the study area operate at a relatively higher risk under the existing situation than would be the case under an-optimal situation. Thus, small-scale farmers should allocate resources optimally not only to increase cash income but also to reduce risk.