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Causes of farm diversification over time: an Australian perspective on an Eastern Norway model


  • Culas, Richard J.


Farm planning often focuses on optimal diversification with respect to risk, where the risk-management strategies combine production, marketing, financial and environmental aspects of the farm-firm. In this study an empirical examination of diversification has been carried out using a sample of farms in Eastern Norway. Four measures of diversification (indices) were defined to record the risks in relation to income from farm production. Using these alternative measures of diversification and panel-data, the results show that larger farms are more diversified, and for farms in more favourable locations and access to labour, the farmers have a greater incentive to spread risk. These results suggest that diversification and farm size are positively linked and that there may not be sufficient economies of scale to warrant specialisation and/or farm specialisation may not be environmentally desirable because of the pollution that would result. The Norwegian model offers good prospects for analysing similar issues of diversification in the Australian farming sector.

Suggested Citation

  • Culas, Richard J., 2006. "Causes of farm diversification over time: an Australian perspective on an Eastern Norway model," AFBM Journal, Australasian Farm Business Management Network, vol. 3(1).
  • Handle: RePEc:ags:afbmau:122238

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    References listed on IDEAS

    1. S. R. Johnson, 1967. "A Re-examination of the Farm Diversification Problem," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 49(3), pages 610-621.
    2. Joyce T. Chen & C. B. Baker, 1974. "Marginal Risk Constraint Linear Program for Activity Analysis," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 56(3), pages 622-627.
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    Cited by:

    1. Ciaian, Pavel & Guri, Fatmir & Rajcaniova, Miroslava & Drabik, Dusan & Paloma, Sergio, 2015. "Land Fragmentation, Production Diversification, and Food Security: A Case Study from Rural Albania," 2015 Conference, August 9-14, 2015, Milan, Italy 211539, International Association of Agricultural Economists.
    2. Sichoongwe, Kiru, 2014. "Determinants and Extent of Crop Diversification Among Smallholder Farmers in Southern Zambia," Research Theses 243456, Collaborative Masters Program in Agricultural and Applied Economics.
    3. Lighton Dube & Revaux Numbwa & Emmanuel Guveya, 2016. "Determinants of crop diversification amongst agricultural co-operators in Dundwa agricultural camp, Choma district, Zambia," Asian Journal of Agriculture and rural Development, Asian Economic and Social Society, vol. 6(1), pages 1-13, January.
    4. repec:ags:cmpart:198521 is not listed on IDEAS


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