Agricultural diversification and policy reform
The impact of risk on agriculture and the alternative ways of dealing with it has captured the attention of economists and policy makers for a long time. In recent years, the issue has gained renewed interest. Many countries have started policy reforms aimed at liberalizing domestic markets, removing quantitative restrictions on trade, and opening up their economies to international trade opportunities. As this process develops, producers in different region of the world will start facing increased price variability arising from world market fluctuations, as up to now, mainly due to government marke interventions, domestic producer prices have varied substantially less than international ones (Hazell et. al., 1990; Schiff and Valdes,1992). Hence, risk,and price risk in particular, will most probably be at the core of the implementation problems associated with policy reform packages. It is well known that diversification of the production mix can be a particularly efficient mechanism for diminishing the impact of risk on producers' welfare. In this regard, different public policies may help to deepen diversification in agriculture, public investment in irrigation being the most important example. However, since many of these policies entail a significant use of resources, an important policy question concerns the impact that trade and macro reform may have on risk in agricultural activities, and on the endogenous diversification response by producers. The main objectives of this paper are to: 1) review the problem of price risk in agriculture, especially in the case of domestic markets facing international price fluctuations; 2) examine the potential role for diversification as a way of diffusing price risk; and 3) analyze the interaction between the process of trade and macro reform; price risk, and agricultural diversification. It is important to mention at the outset that the risk perspective - the one adopted in this paper - is just one of the many angles from w
(This abstract was borrowed from another version of this item.)
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- P. B. R. Hazell & M. Jaramillo & A. Williamson, 1990. "The Relationship Between World Price Instability And The Prices Farmers Receive In Developing Countries," Journal of Agricultural Economics, Wiley Blackwell, vol. 41(2), pages 227-241.
- Grilli, Enzo R & Yang, Maw Cheng, 1988. "Primary Commodity Prices, Manufactured Goods Prices, and the Terms of Trade of Developing Countries: What the Long Run Shows," World Bank Economic Review, World Bank Group, vol. 2(1), pages 1-47, January.
- Wayne E. Ferson & George M. Constantinides, 1991.
"Habit Persistence and Durability in Aggregate Consumption: Empirical Tests,"
NBER Working Papers
3631, National Bureau of Economic Research, Inc.
- Ferson, Wayne E. & Constantinides, George M., 1991. "Habit persistence and durability in aggregate consumption: Empirical tests," Journal of Financial Economics, Elsevier, vol. 29(2), pages 199-240, October.
- Ardeni, Pier Giorgio & Wright, Brian, 1992. "The Prebisch-Singer Hypothesis: A Reappraisal Independent of Stationarity Hypotheses," Economic Journal, Royal Economic Society, vol. 102(413), pages 803-12, July.
- Mundlak, Yair & Larson, Donald F, 1992. "On the Transmission of World Agricultural Prices," World Bank Economic Review, World Bank Group, vol. 6(3), pages 399-422, September.
When requesting a correction, please mention this item's handle: RePEc:eee:jfpoli:v:20:y:1995:i:3:p:245-255. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Shamier, Wendy)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.