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Producers get Squeezed up the Farming Food Chain: A Theory of Crop Portfolio Composition and Land Use
Author(s) -
Blank Steven C.
Publication year - 2001
Publication title -
applied economic perspectives and policy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.4
H-Index - 49
eISSN - 2040-5804
pISSN - 2040-5790
DOI - 10.1111/1467-9353.00069
Subject(s) - portfolio , agriculture , composition (language) , agricultural economics , business , crop , agricultural science , organic farming , chain (unit) , economics , environmental science , geography , forestry , finance , archaeology , linguistics , philosophy , physics , astronomy
There are a number of seemingly contradictory trends in the structure of American agriculture. For example, total revenues from agriculture in the United States continue to increase nearly every year, yet the total acreage of land in farms continues to decrease. This article presents an explanation using portfolio theory that is consistent both with the trends and with rational behavior of individual producers. The results have implications for commodity markets, land prices, and, in the long run, for the economic viability of American production agriculture.