Socially Beneficial Rationality: The Value of Strategic Farmers, Social Entrepreneurs and For-Profit Firms in Crop Planting Decisions

Ming Hu, Yan Liu, Wenbin Wang
{"title":"Socially Beneficial Rationality: The Value of Strategic Farmers, Social Entrepreneurs and For-Profit Firms in Crop Planting Decisions","authors":"Ming Hu, Yan Liu, Wenbin Wang","doi":"10.2139/ssrn.2847477","DOIUrl":null,"url":null,"abstract":"Price fluctuations in agricultural markets are an obstacle to poverty reduction for small-scale farmers in developing countries. We build a micro-foundation to study how farmers of heterogeneous production costs, under price fluctuations, make crop-planting decisions over time to maximize their incomes. We consider both strategic farmers, who rationally anticipate the near-future prices as a basis for making planting decisions, and naive farmers, who shortsightedly react to recent crop prices. The latter behavior may cause recurring over- or under-production, which leads to price fluctuations. We find it important to cultivate strategic farmers, because their self-interested behavior alone, made possible by sufficient market information, can reduce price volatility and benefit all farmers. Surprisingly, even a tiny number of strategic farmers may be enough to stabilize a market price. In the absence of strategic farmers, a well-designed pre-season procurement contract, offered by a non-profit or for-profit firm to a fraction of contract farmers, can bring benefit to all the farmers as well as to the firm itself and reduce income disparity among farmers. On the other hand, a poorly designed contract may distort the market and drive non-contract farmers out of business.","PeriodicalId":402954,"journal":{"name":"FoodSciRN: Other Agricultural Food Science","volume":"48 5 1","pages":"0"},"PeriodicalIF":0.0000,"publicationDate":"2016-10-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"2","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"FoodSciRN: Other Agricultural Food Science","FirstCategoryId":"1085","ListUrlMain":"https://doi.org/10.2139/ssrn.2847477","RegionNum":0,"RegionCategory":null,"ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"","JCRName":"","Score":null,"Total":0}
引用次数: 2

Abstract

Price fluctuations in agricultural markets are an obstacle to poverty reduction for small-scale farmers in developing countries. We build a micro-foundation to study how farmers of heterogeneous production costs, under price fluctuations, make crop-planting decisions over time to maximize their incomes. We consider both strategic farmers, who rationally anticipate the near-future prices as a basis for making planting decisions, and naive farmers, who shortsightedly react to recent crop prices. The latter behavior may cause recurring over- or under-production, which leads to price fluctuations. We find it important to cultivate strategic farmers, because their self-interested behavior alone, made possible by sufficient market information, can reduce price volatility and benefit all farmers. Surprisingly, even a tiny number of strategic farmers may be enough to stabilize a market price. In the absence of strategic farmers, a well-designed pre-season procurement contract, offered by a non-profit or for-profit firm to a fraction of contract farmers, can bring benefit to all the farmers as well as to the firm itself and reduce income disparity among farmers. On the other hand, a poorly designed contract may distort the market and drive non-contract farmers out of business.
查看原文
分享 分享
微信好友 朋友圈 QQ好友 复制链接
本刊更多论文
社会有益理性:战略农民、社会企业家和营利性企业在作物种植决策中的价值
农业市场的价格波动是发展中国家小农减贫的一个障碍。我们建立了一个微观基础来研究在价格波动下,异质性生产成本的农民如何随着时间的推移做出作物种植决策以最大化他们的收入。我们考虑了战略型农民和天真型农民,前者理性地预测近期的价格,作为做出种植决定的基础,后者对近期的作物价格做出短视的反应。后一种行为可能导致生产过剩或生产不足,从而导致价格波动。我们发现培养有战略眼光的农民是很重要的,因为他们的自利行为,只要有足够的市场信息,就可以减少价格波动,使所有农民受益。令人惊讶的是,即使是少数具有战略意义的农民也足以稳定市场价格。在缺乏战略农民的情况下,由非营利性或营利性企业向一小部分合同农民提供一份设计良好的季前采购合同,可以为所有农民以及企业本身带来利益,并减少农民之间的收入差距。另一方面,设计不当的合同可能会扭曲市场,使无合同农民破产。
本文章由计算机程序翻译,如有差异,请以英文原文为准。
求助全文
约1分钟内获得全文 去求助
来源期刊
自引率
0.00%
发文量
0
期刊最新文献
Crop Minimum Support Price versus Cost Subsidy: Farmer and Consumer Welfare Efficiency and factors for agricultural use of sludge in circular Bulgarian economy COVID-19 Pandemic-Induced Economic in Sri Lanka Eye Impact of COVID-19 Pandemic on Financial Health and Food Security: a Survey-Based Analysis Credit Impact on Agriculture Production in Pakistan
×
引用
GB/T 7714-2015
复制
MLA
复制
APA
复制
导出至
BibTeX EndNote RefMan NoteFirst NoteExpress
×
×
提示
您的信息不完整,为了账户安全,请先补充。
现在去补充
×
提示
您因"违规操作"
具体请查看互助需知
我知道了
×
提示
现在去查看 取消
×
提示
确定
0
微信
客服QQ
Book学术公众号 扫码关注我们
反馈
×
意见反馈
请填写您的意见或建议
请填写您的手机或邮箱
已复制链接
已复制链接
快去分享给好友吧!
我知道了
×
扫码分享
扫码分享
Book学术官方微信
Book学术文献互助
Book学术文献互助群
群 号:481959085
Book学术
文献互助 智能选刊 最新文献 互助须知 联系我们:info@booksci.cn
Book学术提供免费学术资源搜索服务,方便国内外学者检索中英文文献。致力于提供最便捷和优质的服务体验。
Copyright © 2023 Book学术 All rights reserved.
ghs 京公网安备 11010802042870号 京ICP备2023020795号-1