A general theory is developed to analyze the efficiency and income distribution effects of a biofuel consumer tax credit and the interaction effects with a price contingent farm subsidy. Using the U.S. ethanol market as a stylized example, ethanol prices rise above the gasoline price by the amount of the tax credit. Corn farmers therefore gain directly while gasoline consumers only gain from an...

An empirical procedure was developed to analyze the cost effectiveness of alternative crop insurance products in terms of increasing producer net returns and minimizing variation in net returns. Results indicate that CAT was the overwhelmingly preferred MPCI option for all scenarios. The ranking of the other MPCI options was consistently 50/100, 60/100, and 75/100 in all scenarios. The CRC opti...

The oft-observed inverse relationship between farm size and productivity is generally explained by labor market imperfections. Although other explanations exist (e.g., size-sensitive cropping patterns and variable soil quality), the literature ignores uncertainty as an explanation. Using a simple two-period model of an agricultural household that both produces and consumes under price uncertain...

The main purpose of this study is to examine the responsiveness of peasant farmers to changes in price and non-price factors. To this end, quadratic production and restricted profit functions are fitted to farm-level survey data from Ethiopia. The results indicate that farmers respond significantly to price incentives, but the effect of prices on output supply and fertilizer demand is negligibl...

The law of one price (LOP) plays an important role as a building block in theories of international trade and exchange rate determination. It also serves as a measure of integration for international commodity markets. The LOP states that in competitive markets after adjustment for transportation costs and trade barriers, identical commodities sold in different countries should sell for the sam...

Crop decision planning is an important part of effective farm management. Because of the many uncertain factors such as weather variations, technology advances, and crop yields and prices, all of which prove to change considerably, decision planning can be very complex. The focus of this paper is to develop accurate yield and price forecasting models to aid in decision planning. For yield forec...