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Farm syndication and risk sharing: a case study*

Author:
Bartholomaeus, M. K., Hardaker, J. Brian
Source:
Australian journal of agricultural and resource economics 1981 v.25 no.3 pp. 233-247
ISSN:
1364-985X
Subject:
farmers, farming systems, farms, linear programming, net farm income, ownership, risk
Abstract:
The effectiveness of fully integrated group farming as a means of permitting farmers to achieve economies by working together and to share risk is investigated using two case‐study farms from the mid‐north region of S.A. Linear programming is used to explore the scope for economies achievable through group farming. The results show that, by joint use of resources, total net farm income can be increased and average costs per unit value of output can be reduced. The risk‐sharing advantages of group farming are examined using quadratic risk programming. A group farm plan is found that generates a risky income which, when shared between the two risk‐averse farmers, allows both to increase their expected utilities. The group plan also generates a higher aggregate expected net farm income than with sole ownership.
Agid:
491169