Abstract
Farmers have a variety of tools with which to cope with risk. These tools include shifting their purchases of producer or consumer durable goods between periods, accumulating or depleting savings or buffer stocks, borrowing or restructuring debt, purchasing insurance, and participating in futures markets. Given the variety of methods farmers have for coping with risk, we first set out to answer the fundamental question: Does risk coping affect agricultural production decisions? To answer this we must address the issue of why risk matters. That is, what are the market failures that make risk matter and how do they affect producer behavior?
The views expressed are those of the authors and do not necessarily represent those of the U.S. Department of Agriculture. We thank Bruce Andersen, John Antic, Daniel Hellerstein, Jeffrey LaFrance, Rulon Pope, Meredith Soule, Brian Wright, and David Zilberman for helpful comments and suggestions. All remaining errors are our own.
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Roberts, M.J., Key, N. (2002). Does Liquidity Matter to Agricultural Production?. In: Just, R.E., Pope, R.D. (eds) A Comprehensive Assessment of the Role of Risk in U.S. Agriculture. Natural Resource Management and Policy, vol 23. Springer, Boston, MA. https://doi.org/10.1007/978-1-4757-3583-3_18
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