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Stochastic Linear Programming and Feasibility Problems in Farm Growth Analysis

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  • S. R. Johnson
  • K. R. Tefertiller
  • D. S. Moore

Abstract

If farm growth is defined in terms of asset accumulation, dynamic linear programming techniques can be employed to determine rates of growth implied by nonstochastic models based on assumed farm situations. Frequently, however, because of the environmental conditions in which farms typically operate, a probabilistic characterization of a number of coefficients in such a model is more realistic. With the introduction of these variable coefficients, the programming model used in calculating feasible rates of growth becomes stochastic. There are two alternative methods of solving these stochastic programming models, of which only one, the distribution method, is considered in this article. This method is examined for its usefulness in establishing feasible rates of growth for a particular farm model. An evaluation of the farm growth model and the distribution method of solving the programming problem is then made in relation to a farm representative of an area in the Texas High Plains.

Suggested Citation

  • S. R. Johnson & K. R. Tefertiller & D. S. Moore, 1967. "Stochastic Linear Programming and Feasibility Problems in Farm Growth Analysis," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 49(4), pages 908-919.
    • Handle: RePEc:oup:ajagec:v:49:y:1967:i:4:p:908-919.
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    File URL: http://hdl.handle.net/10.2307/1236946
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    Citations

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    Cited by:

    1. Walker, Odell L. & Hardin, Mike L. & Mapp, Harry P., Jr. & Roush, Clint E., 1979. "Farm Growth And Estate Transfer In An Uncertain Environment," Southern Journal of Agricultural Economics, Southern Agricultural Economics Association, vol. 11(1), pages 1-12, July.
    2. McInerney, J. P., 1971. "Development in planning techniques with a practical potential in the 1970's - other developments," International Farm Management Association Congress Archive 330454, International Farm Management Association.
    3. Boehlje, Michael, 1973. "The Entry-Growth-Exit Processes In Agriculture," Southern Journal of Agricultural Economics, Southern Agricultural Economics Association, vol. 5(1), pages 1-14, July.
    4. Marshall, Graham R. & Jones, Randall E. & Wall, Lisa M., 1997. "Tactical Opportunities, Risk Attitude and Choice of Farming Strategy: an Application of the Distribution Method," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 41(4), pages 1-21.
    5. Kaiser, Harry M., 1988. "Simultaneous Production And Marketing Decisions Over Time: Discussion," Regional Research Projects > 1988: S-180 Annual Meeting, March 20-23, 1988, Savannah, Georgia 272841, Regional Research Projects > S-180: An Economic Analysis of Risk Management Strategies for Agricultural Production Firms.
    6. Jensen, Harald R., 1977. "PART I. Farm Management and Production Economics, 1946-70," AAEA Monographs, Agricultural and Applied Economics Association, number 337213, january.
    7. Baker, C.B. & Barry, Peter J. & Lee, Warren F. & Olson, Carl E. & Hochman, Eithan & Rausser, Gordon S. & Kottke, Marvin W., 1977. "Economic Growth of the Agricultural Firm," Western Region Archives 260636, Western Region - Western Extension Directors Association (WEDA).
    8. Rae, Allan N., 1970. "Capital Budgeting, Intertemporal Programming Models, With Particular Reference To Agriculture," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 14(1), pages 1-14, June.
    9. Schnitkey, Gary D. & Taylor, C. Robert, 1987. "Conventional Capital Budgeting Versus Stochastic Dynamic Analysis Of Optimal Farmland Purchase And Sell Decisions," Illinois Agricultural Economics Staff Paper 244662, University of Illinois at Urbana-Champaign, Department of Agricultural and Consumer Economics.

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