Premium
Cash Crop Production, Food Price Volatility, and Rural Market Integration in the Third World
Author(s) -
Fafchamps Marcel
Publication year - 1992
Publication title -
american journal of agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.949
H-Index - 111
eISSN - 1467-8276
pISSN - 0002-9092
DOI - 10.2307/1242993
Subject(s) - cash crop , food security , volatility (finance) , economics , portfolio , cash , production (economics) , agriculture , agricultural economics , food processing , liberalization , agricultural productivity , business , financial economics , microeconomics , market economy , finance , ecology , chemistry , food science , biology
Large farmers in the Third World often devote to cash crops a larger share of their land than do small farmers. This paper suggests a possible explanation: even in the presence of food markets, Third World farmers' food security is best assured by food self‐sufficiency. A model of crop portfolio choice under multivariate risk is used to show that reasonable assumptions regarding risk and preferences reproduce the observed pattern. Simulations further indicate that food market integration reduces the need for food self‐sufficiency. Policy implications are drawn regarding domestic trade liberalization and agricultural technology.