Microeconomic theory provides four competing explanations for partial land allocation to new and traditional seed varieties in HYV adoption decisions: input fixity, portfolio selection, safety-first behavior, and learning. Testing a general model that contains each as a special case suggests that they are jointly most likely to explain land allocation in the HYV adoption decisions of Malawian smallholders. Yet when each explanation is tested to the exclusion of the others (as is usually the case in the literature), competing hypotheses are individually significant. Results suggest that employing approaches based on single explanations may lead to inappropriately narrow conclusions.
Agricultural innovations are often promoted as a package—a new seed variety, a recommended fertilizer application, and other recommended cultivation practices. Nevertheless, many farmers adopt pieces of the package rather than the whole, in a sequential fashion. This paper presents a behavioral model which explains sequential adoption as a consequence of learning by adopting farmers. In order to learn more about the entire technological package, the farmer may adopt a part of the package. The model is shown to be consistent with observed patterns of sequential adoption.
Using a method proposed by Meyer for deriving comparative statics results in the presence of risk, this paper analyzes the effects of various agricultural and environmental policy alternatives on the choices of a risk‐averse producer with a Just and Pope production function. Many commonly held beliefs about policy effects are not supported unambiguously by economic theory. For example, a tax on pesticides will not necessarily reduce pesticide use or average output, and a reduction in price of agricultural output will not necessarily lead to a reduction in use of water or agricultural chemicals.
The multiproduct cost concepts of Baumol, Panzar, and Willig are used to explore the contention of Shumway, Pope, and Nash that allocable fixed inputs cause joint production. Allocable fixed inputs may create an interdependence in the short‐run cost function when none exists in the long run; however, this will not necessarily lead to joint production. For joint production to occur in the short run, either the short‐run cost function must exhibit economies of scope, or stand‐alone production of one of the commodities must exhibit diseconomies of size. The issue of whether allocable fixed inputs cause joint production is an empirical question.
If a land price is to be observed, there must be trades of land. If the aggregate quantity of land in agriculture is fixed, those trades must be among farmers. This paper presents a model in which farmers of differing "ability" trade land among themselves. The model is used to evaluate the impact of farm programs (a demand enhancement program; a price support program; a land retirement program; an income subsidy program) on output price, land price, and number of farmers. Effects of these programs depend on conditions that require empirical evaluation. Preliminary evidence suggests that some standard tools of farm policy have the effect of reducing farm numbers.
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