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The Influence Of Risk Aversion On The Uptake Of Set‐Aside: A Motad And Crp Approach

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  • J. Hope
  • J. Lingard

Abstract

This paper applies MOTAD and CRP models to the farm set‐aside decision and presents a framework for analysis which examines the influence of risk on the land‐idling decision. The results suggest that set‐aside payment at a rate of £180‐£200 per hectare would be attractive only at relatively high levels of risk aversion on an East Anglian specialist cereal farm and with moderate risk aversion on a Northumberland mixed farm. However, at identical levels of risk aversion, the area set aside was greater on the East Anglian farm. A survey to ascertain farmers' risk: income weightings is suggested as a useful adjunct to this work.

Suggested Citation

  • J. Hope & J. Lingard, 1992. "The Influence Of Risk Aversion On The Uptake Of Set‐Aside: A Motad And Crp Approach," Journal of Agricultural Economics, Wiley Blackwell, vol. 43(3), pages 401-411, September.
  • Handle: RePEc:bla:jageco:v:43:y:1992:i:3:p:401-411
    DOI: 10.1111/j.1477-9552.1992.tb00234.x
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    References listed on IDEAS

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    Cited by:

    1. K M Mehedi Adnan & Liu Ying & Swati Anindita Sarker & Muhammad Hafeez & Amar Razzaq & Muhammad Haseeb Raza, 2018. "Adoption of Contract Farming and Precautionary Savings to Manage the Catastrophic Risk of Maize Farming: Evidence from Bangladesh," Sustainability, MDPI, Open Access Journal, vol. 11(1), pages 1-19, December.
    2. Sonia Quiroga & Emilio Cerdá, 2017. "Exploring farmers? selection of crop protection levels as an adaptation strategy to climate risks," Proceedings of Economics and Finance Conferences 4507414, International Institute of Social and Economic Sciences.
    3. S. Martin & F. McLeay, 1998. "The Diversity of Farmers' Risk Management Strategies in a Deregulated New Zealand Environment," Journal of Agricultural Economics, Wiley Blackwell, vol. 49(2), pages 218-233, June.
    4. Martins, M. Belem & Marques, Carlos, 2007. "Methodological aspects of a mathematical programming model to evaluate soil tillage technologies in a risky environment," European Journal of Operational Research, Elsevier, vol. 177(1), pages 556-571, February.
    5. Hild Rygnestad & Rob Fraser, 1996. "Land Heterogeneity And The Effectiveness Of Cap Set‐Aside," Journal of Agricultural Economics, Wiley Blackwell, vol. 47(1‐4), pages 255-260, January.
    6. Wencong Lu & Abdul Latif & Raza Ullah, 2017. "Simultaneous adoption of contract farming and off-farm diversification for managing agricultural risks: the case of flue-cured Virginia tobacco in Pakistan," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 86(3), pages 1347-1361, April.
    7. Oglethorpe, David R. & Sanderson, Roy A., 1999. "An ecological-economic model for agri-environmental policy analysis," Ecological Economics, Elsevier, vol. 28(2), pages 245-266, February.
    8. Gomez-Limon, Jose Antonio & Riesgo, Laura & Arriaza Balmón, Manuel, 2002. "Agricultural Risk Aversion Revisited: A Multicriteria Decision-Making Approach," 2002 International Congress, August 28-31, 2002, Zaragoza, Spain 24827, European Association of Agricultural Economists.
    9. Gomez-Limon, Jose A. & Arriaza, Manuel & Riesgo, Laura, 2003. "An MCDM analysis of agricultural risk aversion," European Journal of Operational Research, Elsevier, vol. 151(3), pages 569-585, December.

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