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| Key, Nigel D.; Roberts, Michael J.. |
| The first part of this paper presents a simple labor supply and production model wherein farmers with diminishing marginal utility of income derive nonpecuniary benefits from farming. We use the model to show how lump-sum or decoupled government payments could have positive and substantial effects on the supply of agricultural products. The result is simple and intuitive: payments allow those who enjoy farming to continue farming while maintaining a reasonably high living standard. Without payments, a lower living standard leads to higher marginal utility of income, making higher off-farm wages more desirable than lower on-farm wages plus non-pecuniary benefits from farming. Farmers respond to a reduction in payments by shifting their labor off-farm... |
| Tipo: Conference Paper or Presentation |
Palavras-chave: Decoupled payments; Government payments; Nonpecuniary benefits; Labor supply; Trade; Agricultural and Food Policy. |
| Ano: 2007 |
URL: http://purl.umn.edu/9831 |
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| Key, Nigel D.. |
| A farmer's decision to contract or produce independently depends on the distribution of income under both arrangements, and on attributes associated with both business arrangements. Risk-averse farmers should be willing to pay a risk premium for the reduction in price risk provided by a contract. Farmers with a preference for "autonomy" should be willing to pay a premium for certain attributes associated with independent production, such as the right to make management decisions and own the commodity they produce. The benefits to growers from contracting (such as risk reduction) may be over-estimated if the non-pecuniary benefits enjoyed by independent producers are not accounted for. This study uses national survey data to estimate the risk premium, the... |
| Tipo: Conference Paper or Presentation |
Palavras-chave: Agricultural contracts; Autonomy; Nonpecuniary benefits; Risk; Farm Management. |
| Ano: 2002 |
URL: http://purl.umn.edu/19688 |
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