Reducing risk through crop diversification: An application of portfolio theory to diversified horticultural systems

Paut, Raphaël; Sabatier, Rodolphe; Tchamitchian, Marc

doi:10.1016/j.agsy.2018.11.002

Cited by 58 publications

(40 citation statements)

References 32 publications

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“…The farmer then decides among alternate but virtually unlimited possibilities in the enterprise mix to maximize the utility of income coming from various enterprise portfolios. The Modern Portfolio Theory (MPT) equally applies to the concept of off-farm income diversification [42]. Markowitz [43,44] shows how MPT can be applied to reduce risk when many assets are combined together in a single portfolio, but the asset returns are not correlated perfectly.…”

Section: Dynamics Of Non-farm Income Diversification-literature Reviewmentioning

confidence: 99%

A Quest for Livelihood Sustainability? Patterns, Motives and Determinants of Non-Farm Income Diversification among Agricultural Households in Punjab, Pakistan

et al. 2021

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Many farmers worldwide resort to choosing various income-earning options for diversifying their income sources as a means of risk-avoidance, social protection, and, above all, to finance agricultural operations. Non-farm income generation among farm families has become an imperative part of livelihood earning strategies in recent years amid fast-evolving climatic and sociodemographic changes. In this regard, this study seeks to identify the patterns and socioeconomic factors responsible for the uptake of various non-farm income diversification sources among agricultural households in southern Punjab, Pakistan. For this purpose, a total of 290 farm households were sampled using a random sampling technique to collect relevant data through structured questionnaires. Results show that approximately 79% of the surveyed farmers were involved in non-farm income generation activities, whereas, the income from these sources accounts for about 15% of total household income. The majority of the respondents offered labour for off-farm work followed by self-employment ventures. The major reason to pursue non-farm work includes low income from agriculture, mitigating risks associated with farming, and acquiring funds to finance farming operations, along with the desire to increase family income. A range of socioeconomic and infrastructure-related variables are associated with the decision to participate in specific off-farm activity, such as age, education, family size, farm income, dependency burden, farming experience, and distance to the main city. Results imply the provision of technical support to increase livelihood from farming operations to ensure food security and curb rural-urban migration. However, vocational training can enhance the rural inhabitants’ skillset to diversify on the farm through agribusiness development within rural areas, enabling them to employ local people instead of populating urban centres.

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Section: Dynamics Of Non-farm Income Diversification-literature Reviewmentioning

confidence: 99%

A Quest for Livelihood Sustainability? Patterns, Motives and Determinants of Non-Farm Income Diversification among Agricultural Households in Punjab, Pakistan

et al. 2021

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“…ΔX is negative when it is less costly to produce two or more outputs jointly within one firm than to produce them separately. The indicator defined in Equation ( 1) is also in line with the diversification gain Ds ij calculated by (Paut et al, 2019) (Equation ( 2)) with σ the standard deviation and ρ the coefficient of correlation, assuming that mixing activities has no impacts on input-output coefficients of each activity.…”

Section: Estimation Of the Benefits Of Mixed Systems Relative To Specialized Farmsmentioning

confidence: 99%

“…Mixing several enterprises is also a risk management strategy used by farmers (Mishra et al, 2004) to improve their resilience. According to the portfolio theory, a system combining productions with different risk patterns exhibits less variance than the weighted average variance of its constituents (Paut et al, 2019). Thus, mixed systems have multiple potential benefits.…”

Section: Introductionmentioning

confidence: 99%

Does mixing livestock farming enterprises improve farm and product sustainability?

Mosnier

Benoît

Minviel

et al. 2021

International Journal of Agricultural Sustainability

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Mixed farming systems are gaining interest both as a risk management strategy and to apply agroecological principles. This study set out to assess the sustainability of mixed systems compared to their specialized counterparts. The Orfee bioeconomic farm model was used to simulate three mixed farms: beef and dairy, beef and sheep, and cash crop and beef, under 1990-2017 prices and policies in France. Several sustainability criteria were computed at two scales (i) aggregated farm level, to assess whether mixed farms with several integrated enterprises performed better than if these enterprises were managed in specialized farms, and (ii) unit of product or labour to assess whether a product was produced more sustainably and a worker obtained higher and more stable income in a mixed farm. We found that mixed farms had less work peaks, lower global warming potentials and nitrogen balances, lower total production costs, higher and more stable net incomes than if their enterprises were managed in two specialized farms. However, profitability and income variability of the mixed farms were not better than the best performing specialized farm. The consumption of concentrate feed decreased in the mixed livestock farms but increased in the beefcrop farm that degraded feed-food competition.

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“…After the initiation of a criminal case, it is necessary to conduct active investigative actions as soon as possible. Especially, in our opinion, they should be focused on actually existing livestock facilities, and these actions should be conducted in conjunction with documentary evidence of the presence of mismatches between the existing person objects livestock and actually submitted documents must also scheduled and conducted forensic: forensic accounting and technical and forensic examination of documents [1].…”

Section: Table 1 Stages Of Animal Husbandry Developmentmentioning

confidence: 99%

Corruption factor in the use of allocated funds for the development of animal husbandry

Kirilenko

2021

E3S Web Conf.

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Agricultural cooperatives are seen as an efficient way for smallholder farmers to create bargaining power in order to achieve poverty reduction and food security. However, the success of these cooperatives depends on their ability to maintain their social capital, which is at the core of collective action. Using unique data collected from 511 agricultural cooperatives in 12 districts of Tigray region in northern Ethiopia, this paper examines the effects of cooperative size on conflict, fraud, and distrust. We used instrumental variables (IV) probit estimation techniques, accounting for endogeneity of membership size, to confirm that cooperative size does affect the occurrence of conflict, fraud, and trust. The results also indicate that other influencing factors include: cooperative age, number of employees, payment of dividends based on transaction volume, and heterogeneity of member goals.

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Reducing risk through crop diversification: An application of portfolio theory to diversified horticultural systems

Cited by 58 publications

References 32 publications

A Quest for Livelihood Sustainability? Patterns, Motives and Determinants of Non-Farm Income Diversification among Agricultural Households in Punjab, Pakistan

A Quest for Livelihood Sustainability? Patterns, Motives and Determinants of Non-Farm Income Diversification among Agricultural Households in Punjab, Pakistan

Does mixing livestock farming enterprises improve farm and product sustainability?

Corruption factor in the use of allocated funds for the development of animal husbandry

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