Risky Agricultural Markets: Price Forecasting And The Need For Intervention Policies - Hardcover

Scandizzo, Pasquale L; Hazell, Peter B R; Anderson, Jock

Hardcover

ISBN 10: 0367286157 ISBN 13: 9780367286156

Publisher: CRC Press, 2019

Synopsis

This book shows how decisions made by individual farmers influence the efficiency of agricultural markets. Unless farmers properly take account of the correlation between prices and yields in forming their price forecasts, competitive markets will often be socially inefficient, leading to misallocation of resources. The authors demonstrate that a simple and practical price forecasting rule, based on expected per unit revenue, is generally adequate to ensure efficient market behavior.Time-series data from various countries are used to test the hypothesis that market supply is influenced by the correlation of price and yield as well as by lagged market prices . The importance of market inefficiencies in risky situations is shown to, depend on the variability of yields, the nature of farmers'price forecasting behavior, the degree of private risk aversion,and the elasticity of demand. The authors suggest and evaluate three basic policy approaches governments may take when confronted with very inefficient markets--establishing production quotas, improving market information services, and implementing price stabilization schemes. They conclude by discussing implications of the study for the specification of agricultural supply models and for the economic appraisal of risky investment projects.

About this edition

• Publisher: CRC Press
• Publication date: 2019
• ISBN 10: 0367286157
• ISBN 13: 9780367286156
• Binding: Hardcover
• Edition number: 1
• Number of pages: 142