Does Liquidity Matter to Agricultural Production?

  • Michael J. Roberts
  • Nigel Key
Part of the Natural Resource Management and Policy book series (NRMP, volume 23)


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?


Cash Flow Unit Root Test Risk Preference Information Effect Price Shock 
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Copyright information

© Springer Science+Business Media New York 2002

Authors and Affiliations

  • Michael J. Roberts
    • 1
  • Nigel Key
    • 1
  1. 1.Economic Research ServiceU.S. Department of AgricultureUSA

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