the theoretical effects of farm policies on optimal leverage and the probability of equity losses the degree to which the use of debt is increased in response to risk reducing and income augmenting farm policies is studied theoretically a mean variance model is used to determine the optimal leverage adjustment then the effects of policies on the cumulative probability of earning very low rates of return on equity are examined the evidence suggests that farm policies induce a large enough increase in financial leverage to increase the probability of farmers having negative returns to equity

recurring contradictions in agrarian development pesticide problems in caribbean basin nontraditional agriculture abstract the promotion of nontraditional export agriculture is a cornerstone of us development efforts to spur economic growth and help pull central america and the caribbean out of a decade long crisis this paper analyzes the continued reliance on pesticides in the current development strategy and the socioeconomic implications of the ecological disruption the chemical technology generates relying on interviews with producers exporters and government officials from guatemala the dominican republic and the united states as well as surveys of guatemalan farmers the authors argue that the current agricultural development strategy perpetuates social and technological factors which heighten the potential for renewed crisis in the agrarian sector inadequate knowledge of pesticide hazards and a lack of control over pesdticide use is leaving farmers farm workers and exporters increasingly vulnerable to economic public health and environmental problems paradoxically some measures to overcome these problems threaten to undermine efforts to improve social equity by further concentrating land and resources in the hands of large national and transnational production units

the dynamic in stability of backwards induction abstract the evolutionary basis for predicting the backwards induction solution in finite extensive form games with perfect information is examined evolution is modelled using the replicator dynamic in combination with rare perturbations that introduce a small change in the proportion of each strategy the criterion for our judgement is whether this dynamic stabilizes over time at the subgame perfect equilibrium outcome we find that the backwards induction solution is fully justified by this process only in very simple games examples of more complex games are given in which this process does not select between the subgame perfect equilibrium outcome and alternative nash equilibrium outcomes journal of economic literature classification numbers c72 c79

returns to individual traders of futures aggregate results by means of a data set previously unavailable for academic research actual trading histories of individual futures traders are examined with this more detailed data the author is able to 1 test the risk return hypothesis directly 2 include a much larger segment of the market than before and 3 use actual instead of hypothetical t rading strategies it is shown that the commercial hedging traders are most profitable while noncommercial speculative traders earn n egative or zero profits because speculators are not receiving reward s for the risks they willingly absorb the theory of normal backwarda tion and its extension can be rejected copyright 1987 by university of chicago press

a century of research on agricultural markets this article provides a perspective on major innovations in research on agricultural markets over the past century we review research on market structure and performance vertical coordination arrangements and institutions for producer collective action contributions to empirical modeling of agricultural price determination and marketing margins are also evaluated as are innovations in research on spatial market relationships and the role of storage finally we discuss contributions to understanding market information systems and the functioning of market based mechanisms for agri

toward a positive economic theory of hedging the hedging models developed over the last half century are evaluated for their ability to explain the actual hedging behavior of the various economic agents this evaluation shows a total lack of a reasonable positive model of hedging behavior while each class of existing models predicts some observed behavior none is able to predict the broad range of actions that is easily observed in the real world in this paper i develop such a model and include a plausible and coldly rational economic explanation for why farmers don t hedge at all while merchandisers with identical risk attitudes will fully hedge

critique and transformation on the hypothetical nature of ecosystem service value and its neo marxist liberal and pragmatist criticisms abstract ecosystem service valuation esv attempts to transform the opposition of human economic necessity and ecological conservation by valuing the latter in terms of the services rendered by the former however despite a number of esv inspired sustainability initiatives since the 1990s global ecological degradation continues to accelerate this suggests that esv has fallen far short of its goals of sustainable social transformation a failure which has generated considerable criticism this paper reviews three prominent lines of esv criticism 1 the neo marxist criticism which emphasizes the fictitious character of ecosystem commodities 2 the liberal criticism through friedrich hayek s concept scientistic objectivism and 3 the pragmatist criticism of value monism although each form of criticism provides insight into the limitations of esv all share esv s inability to discern what kind of social transformation is possible unable to provide an account of their own immersion in social and historical context these approaches operate in the hypothetical in light of these shortcomings this paper advances a critical theory approach which we contend provides conceptual tools uniquely well suited to more adequately address the question of social transformation

reputation versus social learning a folk theorem of game theory illustrates that strategic use of reputation can drastically alter the equilibrium play of an isolated group of n players engaged in a finitely repeated game we show that this folk theorem may fail in social settings where many groups of n players play the game sequentially the ability to strategically use reputation dies out over time due to players opportunity to observe the play of earlier groups this phenomenon is demonstrated in a model of bayesian recurring games by using old and new techniques from the rational learning literature combined with a notion of purification journal of economic literature classification numbers c72 c73 d83

market volatility and the dynamic hedging of multi commodity price risk commodity cash and futures prices experienced a severe boom and bust cycle between 2006 and 2009 increases in commodity price volatility have raised concerns about the usefulness of commodity futures and options as risk management tools dynamic hedging strategies have the potential to improve risk management when conditional co variances depart significantly from their unconditional long run counterparts and may be useful to decision makers despite their greater complexity and higher transaction costs we propose a nonparametric copula based generalized autoregressive conditional heteroscedastic npc garch approach to estimate time varying hedge ratios and evaluate the benefits of dynamic hedging during four sub periods between 2000 and 2011 using a stylized texas cattle feedlot management problem the npc garch approach allows for a flexible nonlinear and asymmetric dependence structure between cash and futures prices for different commodities we find that npc garch dynamic hedging performs bette

optimal hedge ratios with risk neutral producers and nonlinear borrowing costs a new theory of hedging is derived assuming producers are risk neutral forward pricing is costly and borrowing costs are nonlinear the standard risk minimizing hedge ratio is derived when forward pricing is costless when the assumption of costless hedging is dropped high leveraged firms are shown to hedge more than do low leveraged firms if the value of capital is uncorrelated with output price firms are shown to hedge more as cash price variability increases thus the model can be consistent with what firms actually do

the new internationalization of agriculture a reformulation abstract our research on the new internationalization of agriculture builds on analyses of the internationalization of capital and the new international division of labor but reformulates internationalization as a contingent political and economic process we argue that shifts in the institutional structure of capitalism in the 1980s profoundly altered national policy options and agro food markets states such as mexico puerto rico and the dominican republic have been compelled to promote agricultural exports typically at the expense of national food security while southern states pursue a common goal of international competitiveness this involves a varied process of domestic restructuring and differentiates states within the world economy

food riots and protest agrarian modernizations and structural crises summary food riots in the developing world have re gained momentum coinciding with converging financial food and global energy crises of 2007 08 high staple food prices across the world and increasingly un regulated food markets have highlighted among other things the political dimensions of food related protests this has been the case especially in the mena region but also in sub saharan africa east asia and latin america where food related protests have often been catalysts to contest wider processes of dissatisfaction with authoritarian and corrupt regimes after many years of silence food related struggles have begun to receive more attention in the academic literature this has mostly been in the context of emerging debates on land grabbing food security sovereignty and social movements yet there have been few attempts to provide a systematic enquiry of existing analytical perspectives and debates or a clear assessment of what some of the political and economic implications may be for what now seem to be persistent food protests and social struggles this article tries to fill this gap by mapping and reviewing the existing and emerging literature on urban and rural food related protests it also explores theories and methodologies that have shaped debate by locating these in an alternative world historical analysis of political economy the article includes but also goes beyond a critical review of the following authors and their important contribution to ongoing debate farshad araghi henry bernstein henrietta friedmann and philip mcmichael jason moore vandana shiva the world bank and fao publications and recent special issues of review journal of agrarian change and journal of peasant studies

a simple multiperiod minimum risk hedge model a multiperiod hedging model is developed that is simpler than other multiperiod models in the literature the model permits periodic adjustment of the hedge while minimizing the producer s profit variance minimum risk hedge ratios are calculated for steers cows hogs corn and soybeans using the full model with hedge adjustments every two months these ratios are compared to those using the model without periodic hedge adjustments and to a simple single period model the results suggest that simple models may work well for simple hedges while the full model is best for more complex hedging situations such as cross hedges our purpose in this paper is to develop a multiperiod hedging model in which the hedge can be updated each period other multiperiod hedging models e g anderson and danthine karp have substantial data requirements which limit their use as viable hedging tools our aim is to develop a simpler model that will have practical application the model is used to calculate minimum risk hedge ratios for steers cows hogs corn and soybeans and these ratios are compared with hedge ratios based on a multiperiod model in which the hedge cannot be adjusted each period simple minimum risk hedge ratios also are computed for each commodity and compared with the other ratios

expected utility debt equity structure and risk balancing the potential effects of agricultural policy on the financial structure of farms is often not fully considered although it has been recognized that policies that reduce business risk may induce farmers to increase financial risk the effects of income policies on farm leverage have not been investigated this paper explores the relationship between farm policy and debt equity structure for a risk averse expected utility maximizer agricultural economists have demonstrated considerable theoretical interest in the futility of agricultural policy many have suggested that policies increasing farm revenues may well result in higher land prices such that landowners receive a windfall gain but incomes of tenant farmers and new entrants are unchanged gabriel and baker added to this nihilism by suggesting that policies that reduce business risk might induce choices that increase financial risk although this important hypothesis is difficult to test gabriel and baker s empirical results appear to be consistent with their hypothesis this paper suggests an alternative to the gabriel and baker model for analysis of the risk balancing hypothesis that is a structural model of the overall debt equity decision for agricultural proprietors structural variables include not only business risk but also expected return from farm operations expected capital gains from land and interest cost the primary assumptions of the model are that a the proprietor s objective is to maximize the expected utility of the rate of return on equity b the utility function of wealth is negative exponential c a normal distribution exists for the rate of return on assets and d taxes are ignored risk concepts and leverage

cycles of learning in the centipede game abstract this paper studies the evolutionary properties of the centipede game for this game the use of backward induction as a model of rational behavior has been consistently challenged by the experimental evidence our claim is that backward induction can still accurately predict the players behavior provided that they are given time enough to appreciate the strategic environment in which they operate we support this claim by proving convergence to the backward induction solution for all continuous time monotonic selection dynamics however we also show that this solution is intrinsically unstable and how this instability is positively related to the length of the game journal of economic literature classification numbers c72 c79

implications of commodity price behavior for marketing strategies prices of agricultural commodities have systematic dynamic components and many agricultural economists have thought that forecasts of this behavior ought to aid marketing decisions thereby raising producers returns but if commodity markets are pricing efficient then noncompetitive profit opportunities should be quickly arbitraged away thus a debate exists about the magnitude of the likely benefits of various marketing strategies herein we address the question what does the literature about commodity price behavior contribute to our understanding of the expected outcomes from alternative marketing strategies our brief answer is as follows spot prices in u s commodity markets typically behave in a way that is consistent with efficient markets systematic behavior persists because of the costs of arbitrage hence price forecasts in the public domain cannot be used to produce returns which are consistently above the competitive norm although low cost strategies to manage price risk exist evaluating the evidence on these topics is not easy however because the price generating processes are complex sometimes prices seem to behave as if a market is inefficient advice based on analyses using short samples should be used with great caution the remainder of the article elaborates

the dilemma of cheap food and self sufficiency the case of wheat in iran self sufficiency in wheat has been one of the major goals of iranian agricultural policies since the revolution of 1979 even so the country failed to achieve this goal by the early 2000s despite a satisfactory growth in wheat production this paper addresses this failure and the political difficulties in introducing reforms that would reduce the need for import first the production and consumption of wheat are examined the conclusion is that the cheap bread policy has mainly been responsible for the imbalances between domestic supply and demand and the continued reliance on wheat imports moreover the paper argues that the subsidy program is an expensive safety net for the needy and shows that the iranian government has intended to reform the program since the early 1990s however subsidy reforms are politically sensitive especially in developing countries where subsidies are considered very important both for supporting the poor and for political stability an analysis of the iranian attempts at subsidy reform suggests that they have not yet succeeded mainly due to such political considerations

evolutionary selection against iteratively weakly dominated strategies abstract this paper provides sufficient conditions under which regular payoff monotonic evolutionary dynamics a class of imitative dynamics that includes the replicator dynamic select against strategies that do not survive a sequence of iterated elimination of weakly dominated strategies we apply these conditions to bertrand duopolies and first price auctions our conditions also imply evolutionary selection against iteratively strictly dominated strategies

more reasons why farmers have so little interest in futures markets the use by farmers of futures contracts and other hedging instruments has been observed to be low in many situations and this has sometimes seemed to be considered surprising or even mysterious we propose that it is in fact readily understandable and consistent with rational decision making standard models of the decision about optimal hedging show that it is negatively related to basis risk to quantity risk and to transaction costs farmers who have less uncertainty about prices and those with a diversified portfolio of investments have lower optimal levels of hedging if a farmer has optimistic price expectations relative to the futures market the incentive to hedge can be greatly reduced and finally farmers who have low levels of risk aversion have little to gain from hedging in terms of risk reduction in that the certainty equivalent payoff at their optimal hedge may be little different than the certainty equivalent under zero hedging these reasons are additional to the argument of simmons 2002 who showed that if capital markets are efficient farmers can manage their risk exposure through adjusting their leverage obviating the need for hedging instruments

the political economy of food the rise and fall of the postwar international food order the widespread perception of a food crisis since the early 1970s reflects a real turning point in the global structure of production and distribution of food grains scarcity is always an aspect of capitalist relations but its specific form is determined historically through the international food order the latter is a stable set of complementary state policies whose implicit coordination creates specific prices relative to other prices a specific pattern of specialization and resulting patterns of consumption and trade the social consequences of those orderly international arrangements make sense within a marxist conception of accumulation and class formation on a world scale i present a historical analysis of the rise of an international food order after world war ii whose principal axis was food aid from the united states to formerly self sufficient agrarian societies this order had contradictory effects both economic and political leading to a reorganization of aid and trade higher prices

evolutionary stability in the finitely repeated prisoner s dilemma game the dynamic evolutionary stability of mutual defection is proven for the repeated prisoner s dilemma game where payoffs are cumulative and the number of repetitions is known this agrees with the classical result that the only nash equilibrium outcome is to defect at all stages of this repeated game moreover it is shown that for any initial polymorphic population the evolutionary dynamic converges to a unique nash equilibrium strategy that depends on the original polymorphism both these results confirm earlier conjectures concerning the application of evolutionary game theory to the repeated prisoner s dilemma journal of economic literatureclassification numbers c70 c72

multivariate forecasting of a commodity portfolio application to cattle feeding margins and risk traditionally economists have utilized univariate approaches to forecast prices even for firms operating in multicommodity environments this research improves the way in which managerial decision making is analysed by developing a model better representing the price risks and opportunities faced by firms that produce using a portfolio of commodities using the situation of cattle feedlot investors and managers as an example this is accomplished by recognizing the multivariate live cattle feeder cattle and corn prices situation that feedlots operate in and employing corresponding multivariate simulation techniques evaluation suggests that properly modelling the cattle feeding margin as a multivariate set of prices significantly improves the accuracy of forecasting future feeding margin values realized in the cash market the model also suggests incorporating both implied and historical time varying volatility information when forecasting margin variability implications for other multicommodity sit

a global interpretation of the rise of the east asian food import complex abstract the last quarter century explosion of consumer affluence in japan south korea taiwan and china accompanied a new phase in the organization of the global food economy it also conditioned the increasingly speculative capital investments in the region this paper argues that the restructuring of production and consumption relations involved a movement away from the us centered bilateral food surplus regime and toward a multilateral food regime based in wto led agricultural liberalization and the corporate restructuring of agriculture the east asian food import complex advances the neoliberal project of global free trade spawning agro export zones throughout southeast asia

portfolio theory and the demand for futures the case of california cotton this paper examines the simultaneous choice of cropping patterns and futures positions it derives the demand for hedging as a function of the price of a hedge and the crop choice set it estimates these functions for california cotton farmers it finds that both the costs of hedging and the opportunity to diversify risk by growing other crops substantially change the optimal hedge for california cotton farmers

pricing weather insurance with a random strike price the ontario ice wine harvest weather insurance within the agricultural sector has been limited by the difficulty in defining the appropriate weather event and in pricing the product we develop a new pricing method for weather insurance under situations where returns depend not only on the occurrence of the weather event but also its timing the method is used to price weather insurance for ice wine because the harvest quantity of grapes for ice wine degrades over time the strike value on the weather event measured as harvestable hours is random we develop a monte carlo method to estimate the premium

the importance of financial leverage and risk aversion in risk management strategy selection the problem of choice among risk management strategies is addressed with the stochastic dominance with a risk free asset sdra criteria the sdra criteria consider all possible combinations of the strategies and financial leverage this allows for strategies with less business risk less expected return and greater leverage to dominate strategies with greater business risk and greater expected return results show that the inclusion of the risk free asset significantly improves the discriminatory power of the ordinary stochastic dominance criteria for the case of risk management strategies copyright 2002 oxford university press

food security in less developed countries 1970 to 1990 despite a global food surplus almost half of the worlds less developed countries suffer significant problems concerning food most social science and policy discussions of food security make the food availability assumption that increased food supply is the key to reducing hunger critics argue however that increased food supply has little impact on hunger and that the primary culprits are entrenched inequality and militarism a lagged panel analysis of food supply and child hunger rates 1970 90 shows that the food supply has only modest effects on child hunger rates and that food supply is structurally rooted in development processes domestic investment urban bias foreign capital penetration while child hunger is politically based in arms imports internal violence and political democratization population pressure tapped by increased age dependency undermines both the supply of food and the populations access to it and culturally dualism magnifies the effects of population pressure on child hunger the effects of economic growth trickle down to affect food both supply and child hunger and economic growth is also positively correlated with political democratization suggesting there is no short term trade off between growth democratization and social equity authors

middle income classes and food crises the new food feed competition famine was averted the novelty was that a 3 shortfall in grain production led to a 250 price increase this specific manifestation of the food crisis was the result of the congruence of an old force population pressure with new ones the income explosion and income inequality in a world in which the economic distance between the rich and the poor grows ever greater even minor food shortages are likely to assume major proportions the agricultural price instability that will ensue represents a major threat to the food security of less developed countries examination of the ingredients of modern food crises can help explain some of the new ramifications of the age old problem of world hunger the three elements that are reflected in the food demand situation are population incomes and prices to avoid needless complexity i will reserve my examination of prices to the end population and incomes deserve more detailed analysis

financial structure of farm businesses under imperfect capital markets recent finance studies have considered whether gaps between a firm s costs of internal and external sources of investment funds arising from capital market imperfections influence its investment behavior and funding preferences this study tests the applicability of the pecking order and partial adjustment theories of financial structure to farm businesses by fitting a set of simultaneous financial equations with farm panel data from illinois model results indicate that illinois farms adjust to long run financial targets for equity debt and leasing but that additional financing needs follow a pecking order that is stronger for farms with greater asymmetric information problems copyright 2000 oxford university press