ECONOMICS AND MANAGEMENT
Main Article Content
Abstract
In western Europe the typical family farmer has less land than is economical with modern machinery, equipment, and levels of education and training, and so must select from the products of an emerging stream of technology the elements that promise improved crop and livestock yields at low cost; adjust his choice of products as relative prices and costs change; and acquire more land as farm labour is attracted by nonfarm employment opportunities and farm numbers decline. The marketplace for agricultural commodities is exceptionally risky for three important reasons. First, no single farm producer can place or withhold enough of a single item on the market to affect the market price; second, the quantity of a commodity taken off the market does not increase in proportion to price declines; third, the farm manager cannot respond to falling prices by quickly switching production from an unprofitable item to a profitable one. To reduce his risks and safeguard profits, the farm manager may specialize or diversify depending on conditions; he may also use the futures market.