The recent emphasis in farm management research has centered on issues of financial management and firm growth. Consequently, a number of studies have identified and evaluated alternative production, financial and marketing strategies that result in growth or expansion of the farm firm. These studies have explicitly or implicitly assumed that the firm is a viable economic unit and the ownership structure will not change during the growth process. Thus, the life cycle of the firm has been severed from the typical life cycle of the enterpreneur, and the financial, economic and human problems of entry and exit of farm entrepreneurs into and out of the agricultural production sector have not been confronted. The following discussion will briefly review the characteristics of the life cycle of the family firm and indicate why entry-exit problems are particularly acute in the agricultural production sector. Then, specific micro and macro issues that merit empirical investigation, including the firm and industry implications of coordination (or the lack thereof) of the entry and exit processes, will be identified and discussed.

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The Entry-Growth-Exit Processes in Agriculture

This article presents the conceptualization of a farm firm growth model which includes both investment and production decisions. The results obtained in the application of the model to a hypothetical Central Indiana farm under alternative resource availability and optimizing criteria assumptions are reviewed. These applications demonstrate the interaction between investment and production decisions in the growth process and indicate that under realistic conditions optimal firm growth is not scale growth. They also indicate that the growth process and the terminal size are different for different objective functions. Finally, the results illustrate the applicability of such a model for investigating farm firm adjustments in a growth context.

A Production-Investment Decision Model of Farm Firm Growth

The growing literature pertaining to multiperiod programming models of farm growth raises three problems that are ordinarily solved with makeshift solutions: the duration of time to be included within the planning horizon; the arbitrage between present and future consumption; and the introduction of uncertainty. The connections between these questions are shown. The net worth of the firm at the end of the planning horizon is maximized under the constraint of a linear consumption function. In this case it is possible to use the turnpike theorem and some additional theorems on separability of matrices to derive a simple rule for deciding on the appropriate length of planning horizon. The introduction of uncertainty shortens the practical planning horizon defined according to this rule.

Time Horizon, Objective Function, and Uncertainty in a Multiperiod Model of Firm Growth

Willingness to supply biomass for bioenergy production: A random parameter truncated analysis

Farmers' perceptions of benefits they receive from farming affect their decision making. In decision model development, it is important to have insight into these benefits. This study tests the relative importance of farmers' benefit values through use of discriminant analysis. Benefits received were economic and non-economic. It appears that farmers have "threshold" security levels. Discriminant analysis indicated that farmer respondents place similar values on many of the benefits. Effective categorization of farmers was not achieved using such factors as debt load, profitability measures, acres, tenancy, age, and their benefit response values. Firm level decision making research by agricultural economists has generally assumed primary goals of either profit maximization or cost minimization. As early as the 1930s, farm management research was characterized as aiding farm managers

An analysis of farmers' perceptions of benefits received from farming

ACCEPTANCE of this assignment, with the above title, allows a more precise delineation of the area "where angels fear to tread." On the other hand, one could "wisely" dismiss the assignment by recalling that the goal of both micro and macro planning is maximization of utility, subject to political, economic, and other environmental restraints. However, unless we can specify some content for empty utility functions, which is highly unlikely, this approach has only the merit of brevity, allowing us to present the shortest paper on record. A less extreme, less brief, but perhaps more revealing approach is to undertake to look at the similarities as well as the dissimilarities of goal functions used in empirical micro planning and the objectives considered in macro planning studies. The commonality between firm growth and general economic growth has been noted by Baumol [1, p. 88], among others. Baumol states, "Though not all attempts by individual firms to increase their size will add to national output (as when the company expands by merger), much of this expansionary effort will, in fact, make for growth of the entire economy." But macro economic planners are generally faced with multiple goals. Marglin [11, p. 19], for example, stresses four objectives most relevant to investment planning in the public sector: (1) to increase aggregate consumption, (2) to redistribute consumption, (3) to fulfill "merit wants," and (4) to promote national self-sufficiency. While further variations and subclassifications of goals are found in the literature, the consumption goal is generally recognized and emphasized by most macro planners and theorists. This has its counterpart in investment decision theory or capital budgeting, largely based on Irving Fisher's classic analysis which regards investment as only a means for distributing consumption over the course of time [8]. Why, then, offered precedents in the fields of macro theory and investment planning, have agricultural production economists stressed maximization of profits and rates of return and given so little acknowledgment to

https://www.jstor.org/stable/pdfplus/1237556.pdf

K. D. Cocks

Papers

Micro Goal Functions and Economic Planning