In the following simulations we present predictions of land use responses to a decline in vegetable prices by three groups of farmers currently involved in vegetable cultivation. As figure 2 shows, however, a fall in vegetable prices induces them to make substantial changes in the allocation of their land. Commercial vegetable production by this group of farmers is thus predicted to decline steeply as prices fall. A small decline in vegetable prices induces only a slight land use change in this group. For a large price shock, however, they fall back on the same commercial crop portfolio as the more risk-seeking farmers.
White corn provides low, but very stable revenues because prices and yields fluctuate little.
As vegetable prices fall, this group concentrates on household self-sufficiency by expanding white corn production to almost all their farm area. Land use choices by farmers with high risk aversion Risk aversion is usually correlated with poverty, income insecurity and asset insecurity. Because our survey covers a large area in the watershed, we are able to extrapolate from farmers' decisions to more aggregate measures of land use change across the landscape. This note reports ongoing research and may not be copied or cited without permission.