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Inflation, Cash Flows, and Growth: Some Implications for the Farm Firm

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  • Robison, Lindon J.
  • Brake, John R.

Abstract

As farm sector prices continue to increase at rates higher than any since World War II, attention is being given to the cause of the price increases and their structural impacts on the farming sector. Land, a major component of farm assets, has been the focus of many studies examining the effects of inflation. Melichar showed current increases in land prices to be consistent with productivity gains. Lee and Rask illustrated that even though current levels of land prices may be justified, firms may have negative cash flows, especially if loans are repaid on level repayment plans. Current inflationary conditions led Robison to conclude that though current land prices may be justified, the benefits and costs are unequally distributed and that, increasingly, persons who in earlier years made land purchases are more able to afford to purchase more, thereby accelerating the trend toward fewer and larger farms.

Suggested Citation

  • Robison, Lindon J. & Brake, John R., 1980. "Inflation, Cash Flows, and Growth: Some Implications for the Farm Firm," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 12(2), pages 131-137, December.
    • Handle: RePEc:cup:jagaec:v:12:y:1980:i:02:p:131-137_01
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    Cited by:

    1. Helmers, Glenn A. & Watts, Myles J. & Smith, Vincent H. & Atwood, Joseph, "undated". "The Impact Of Income Taxes On Resource Allocation And Structure Of Agriculture," 1990 Conference, January 6-9, Albuquerque, New Mexico 260181, Regional Research Committe NC-181: Determinants of Farm Size and Structure.
    2. Kassouri, Yacouba, 2024. "The labor market impact of inflation uncertainty: Evidence from Sub-Saharan Africa," International Review of Economics & Finance, Elsevier, vol. 89(PA), pages 1514-1528.
    3. Kooti, Ghanbar & Robison, Lindon J., 1982. "Present Value Formulas for Calculating Maximum Bid Prices for Land with Applications for the TI-59 Hand Held Computer," Agricultural Economic Report Series 201302, Michigan State University, Department of Agricultural, Food, and Resource Economics.
    4. Glenn A. Helmers & Myles J. Watts & Joseph Atwood, 1985. "Relevancy of cash flow in firm financial management," Agribusiness, John Wiley & Sons, Ltd., vol. 1(4), pages 311-331.

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