Decision-Making, Liquidity and Risk Under Multiple-Cropping Conditions in Taiwan (Farming Systems)
Gleason, Jane Ellen
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https://hdl.handle.net/2142/69873
Description
Title
Decision-Making, Liquidity and Risk Under Multiple-Cropping Conditions in Taiwan (Farming Systems)
Author(s)
Gleason, Jane Ellen
Issue Date
1986
Department of Study
Agricultural Economics
Discipline
Agricultural Economics
Degree Granting Institution
University of Illinois at Urbana-Champaign
Degree Name
Ph.D.
Degree Level
Dissertation
Keyword(s)
Economics, Agricultural
Abstract
Taiwan's agriculture has successfully developed. Over the past three decades, Taiwan's farmers have provided sufficient food and generated foreign exchange, while increasing their own standard of living. Generally speaking, development has occurred because of proper managing of the inherent risks in technological change and new crops. This has been accomplished by solid policy planning in conjunction with responsive and ambitious farmers.
The purpose of this dissertation is to provide an insight into the farming system of southern Taiwan. This includes descriptions and analyses of the factors that contribute to the decision making process of Taiwan's farmers. These factors include: (1) degree of mechanization of crops; (2) policy; (3) gender of labor; (4) off-farm employment; and (5) high reservation prices on liquid assets.
The second purpose is to develop a linear programming model of the farming system. This modified MOTAD (minimization of total average deviation) model uses farm level data to assess the effects that the above factors have on farm decision making and risk management. The model assumes that the two genders of labor are considered by Taiwanese farmers as qualitatively different, and therefore cannot be analyzed as one homogeneous factor of production. This model utilizes technical coefficients which are gender specific, and defines crops in terms of female or male labor-using or -saving.
The analysis indicates that risk neutral farm families optimize the use of resources with cropping patterns which include vegetables and fruits. Women farm intensively during the winter, when vegetables and fruits are important, and men farm most intensively during summer. As risk aversion increases, rice and sugar cane dominate. Family women precede men in taking off-farm jobs, as male labor is needed for crops which exhibit lesser amounts of price and yield volatility.
The interaction of (a) the types of labor each gender provides, (b) risk attitudes, and (c) the economic returns to crop production and off-farm employment results in women providing the family with liquidity. This is done through obtaining salary with off-farm employment while men continue farming, and through cultivation of vegetables and fruits, which provide a regular cash flow.
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