Hostname: page-component-76fb5796d-25wd4 Total loading time: 0 Render date: 2024-04-27T00:55:37.968Z Has data issue: false hasContentIssue false
  • English
  • Français

Farm Growth and Estate Transfer in an Uncertain Environment

Published online by Cambridge University Press:  28 April 2015

Odell L. Walker ,
Mike L. Hardin ,
Harry P. Mapp Jr.  and
Clint E. Roush
Odell L. Walker
Affiliation:
Department of Agricultural Economics, Oklahoma State University
Mike L. Hardin
Affiliation:
Department of Agricultural Economics, Oklahoma State University
Harry P. Mapp Jr.
Affiliation:
Department of Agricultural Economics, Oklahoma State University
Clint E. Roush
Affiliation:
Department of Agricultural Economics, Oklahoma State University
Get access

Extract

Farm firm growth has been an important topic for research and discussion since the 1950s. Incentives for farm growth have been and continue to be substantial. An agricultural economy characterized by technological improvement, decreasing costs, competition, and an inelastic demand for farm products leaves little alternative but growth for a commercial farm. Farm growth is stimulated by the need to achieve size economies that arises partly from new technology and partly from large investments in machinery and equipment. Growth is encouraged by the improving managerial ability of the operator as he matures and gains experience. Increased family living needs and the desire to overcome the adverse effects of inflation on purchasing power spur interest in improving the farm's earning potential. In addition, the operator's goals may include size aspirations to satisfy the desire for a large operation or to support the family of a son or daughter attempting to become established in farming. Because the pressures for growth, both internal and external to the firm, are long-run phenomena in agriculture, continued study and evaluation of the process of entry, firm growth, and exit coordination are essential.

Type
Research Article
Information
Journal of Agricultural and Applied Economics , Volume 11 , Issue 1 , July 1979 , pp. 33 - 44
Copyright
Copyright © Southern Agricultural Economics Association 1979

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

[1] Baker, C. B. “Credit in the Production Organization of the Firm,” American Journal of Agricultural Economics, Volume 50, 1969, pp. 507–521.Google Scholar
[2] Baker, C. B. “Financial Organization and Production Choices,” American Journal of Agricultural Economics, Volume 50, 1968, pp. 1566–1577.CrossRefGoogle Scholar
[3] Baker, C. B. “Firm Growth, Liquidity Management, and Production Choices,” Production Economics in Agricultural Research, AE-4108, Proceedings Department of Agricultural Economics, University of Illinois, 1966.Google Scholar
[4] Baker, C. B., Barry, P. J. Lee, W. F. Olson, C. E., Hochman, E. Rausser, G. S., and Kottke, M. W.. Economic Growth of the Agricultural Firm, Washington State University Technical Bulletin 86, 1977.Google Scholar
[5] Barry, P. J. “Asset Indivisibility and Investment Planning: An Application of Linear Programming,” American Journal of Agricultural Economics, Volume 54, 1972, pp. 255–260.Google Scholar
[6] Barry, P. J. Contracting for Crops and Credit Proceedings, Farm and Ranch Credit School for Commercial Bankers, Texas A&M University, February 1975.Google Scholar
[7] Barry, P. J. and Baker, C. B.. “Reservation Prices on Credit Use: A Measure of Response to Uncertainty,” American Journal of Agricultural Economics, Volume 53, 1971, pp. 222–228.Google Scholar
[8] Barry, Peter J. and Willmann, David R.. “A Risk Programming Analysis of Forward Contracting with Credit Constraints,” American Journal of Agricultural Economics, Volume 58, 1976, pp. 62–70.Google Scholar
[9] Boehlje, M. D. “The Entry-Growth-Exit Process in Agriculture,” Southern Journal of Agricultural Economics, Volume 5, 1973, pp. 23–37.Google Scholar
[10] Boehlje, M. D. and Eisgruber, L. M.. “Strategies for the Creation and Transfer of the Farm Estate,” American Journal ofAgricultural Economics, Volume 54, 1972, pp. 461–473.Google Scholar
[11] Boehlje, M. D. and White, T. K.. “A Production Investment Decision Model of Farm Firm Growth,” American Journal ofAgricultural Economics, Volume 51, 1969, pp. 546–564.Google Scholar
[12] Bostwick, D. Farm Financial Management Research: A Theoretical Analysis, ERS-389, USDA, 1968.Google Scholar
[13] Boussard, J. M. “Time Horizon, Objective Function and Uncertainty in a Multi-period Model of Firm Growth,” American Journal of Agricultural Economics, Volume 53, 1971, pp. 467–577.Google Scholar
[14] Boussard, J. M. and M. Petit. “Representation of Farmers’ Behavior under Uncertainty with a Focus Loss Constraint,” Journal of Farm Economics, Volume 49, 1967, pp. 869–881.Google Scholar
[15] Brake, J. R. “Firm Growth Models Often Neglect Important Cash Withdrawals,” American Journal of Agricultural Economics, Volume 50, 1968, pp. 769–771.Google Scholar
[16] Butcher, W. R. and Whittlesey, N. K.. “Trends and Problems in Growth of Farm Size,” Journal of Farm Economics, Volume 48, 1966, pp. 1513–1519.Google Scholar
[17] Chien, Ying I. and Bradford, Garnett L.. “A Sequential Model of the Farm Firm Growth Process,” American Journal of Agricultural Economics, Volume 58, 1976, pp. 456–465.Google Scholar
[18] Dobbins, C. L. “The Intergeneration Transfer of the Farm Firm: A Recursive Goal Programming Analysis,” Ph.D. thesis, Oklahoma State University, 1978.Google Scholar
[19] Eddleman, B. R. “Increased Uncertainty in Agriculture,” unpublished manuscript. Department of Agricultural Economics, Mississippi State University, 1977.Google Scholar
[20] Forster, D. L. and Duvick, R. D.. “Farm Real Estate Disinvestment Strategies,” Southern Journal of Agricultural Economics, Volume 10, 1978, pp. 1–7.Google Scholar
[21] Fruend, R. J. “The Introduction of Risk Into a Programming Model,” Econometrica, Volume 24, 1956, pp. 253–262.Google Scholar
[22] Halter, A. N. “Models of Firm Growth,” Journal of Farm Economics, Volume 48, 1966, pp. 1503–1510.Google Scholar
[23] Hardin, L. “A Simulation Model for Analyzing Farm Capital Investment Alternatives,” Ph.D. thesis, Oklahoma State University, 1978.Google Scholar
[24] Harrison, G., Scott, J. T., and Baker, C. B.. “A Decision Model for Estate Planning,” Trusts andEstates, Volume 107, 1968, pp. 523–526.Google Scholar
[25] Hazell, P.B.R. “A linear Alternative to Quadratic and Semivariance Programming for Farm Planning Under Uncertainty,” American Journal of Agricultural Economics, Volume 53, 1971, pp. 53–63.Google Scholar
[26] Heidhues, T. “A Recursive Programming Model of Farm Growth in Northern Germany,” Journal of Farm Economics, Volume 48, 1966, pp. 668–685.Google Scholar
[27] Hinman, H. R. and Hutton, R. F.. “Returns and Risks of Expanding Pennsylvania Dairy Farms with Different Levels of Equity,” American Journal of Agricultural Economics, Volume 53, 1971, pp. 608–612.Google Scholar
[28] Irwin, G. D. “A Comparative Review of Some Firm Growth Models,” Agricultural Economics Research, Volume 20, 1968, pp. 82–100.Google Scholar
[29] Johnson, S. R., Tefertiller, K. R., and Moore, D. S.. “Stochastic Linear Programming and Feasibility Problems in Farm Growth Analysis,” Journal of Farm Economics, Volume 49, 1967, pp. 908–919.Google Scholar
[30] Lee, W. F. and Brake, J. R.. Conversion of Farm Assets for Retirement Purposes, Research Report 129, Michigan Agricultural Experiment Station, January 1971.Google Scholar
[31] Levi, D. and Allwood, J.. “Legal-Economic Models as a Tool for Optimizing Intergeneration Property Transfers.” American Journal ofAgricultural Economics, Volume 51, 1969, pp. 1393–1398.Google Scholar
[32] Martin, J. R. and Plaxico, J. S.. Poly period Analysis of Capital Accumulation of Farms in the Rolling Plains of Oklahoma and Texas. USDA Technical Bulletin 1381. September 1967.Google Scholar
[33] Minden, A. J. “Dynamic Programming: A Tool for Farm Firm Growth Research,” Canadian Journal of Agricultural Economics, Volume 16, 1968, pp. 38–45.Google Scholar
[34] Minnick, D. L. “Financial Alternatives and Minimum Resource Requirements for Low Resource, Beginning Farmers in Oklahoma,” M. S. thesis, Oklahoma State University, 1975.Google Scholar
[35] Patrick, G. F. “Some Impacts of Inflation on Farm Firm Growth,” Southern Journal of Agricultural Economics, Volume 10, 1978, pp. 9–14.Google Scholar
[36] Patrick, G. F. and Eisgruber, L. M.. “The Impact of Managerial Ability and Capital Structure on Growth of the Farm Firm,” American Journal of Agricultural Economics, Volume 50, 1968, pp. 491–507.Google Scholar
[37] Reid, D. W., Musser, W. H., and Martin, N. R., Jr. “Income Tax Aspects of Liquidation in Multiperiod Linear Growth Models,” Southern Journal of Agricultural Economics, Volume 10, 1978, pp. 29–34.Google Scholar
[38] Renborg, U. “Growth of the Agricultural Firm: Problems and Theories,” Review of Marketing and Agricultural Economics, Volume 38, 1970, pp. 51–101.Google Scholar
[39] Roush, G. E. “Economic Evaluation of Asset Ownership Transfer Methods and Family Farm Business Arrangements After the Tax Reform Act of 1976,” Ph.D. thesis, Oklahoma State University, 1978.Google Scholar
[40] Roush, C. E., Mapp, H. P., and Maynard, C. D.. “Implications of the Tax Reform Act of 1976 for Estate Planning,” Western Journal of Agricultural Economics, Volume 4, 1979 (forthcoming).Google Scholar
[41] Sadan, E. “The Investment Behavior of a Farm Firm Operating Under Risk,” American Journal of Agricultural Economics, Volume 52, 1970, pp. 495–505.Google Scholar
[42] Scott, J. T. and Baker, C. B.. “A Practical Way to Select an Optimum Farm Plan Under Risk,” American Journal of Agricultural Economics, Volume 54, 1972, pp. 657–661.Google Scholar
[43] Shechter, M. and Heady, E. O.. “Response Surface Analysis and Simulation Models in Policy Choices,” American Journal of Agricultural Economics, Volume 52, 1970, pp. 41–50.Google Scholar
[44] Spence, L. C. “An Analysis of Investment Strategies for Retiring Farmers,” M. S. thesis, Oklahoma State University, 1976.Google Scholar
[45] Spence, L. C. and Mapp, H. P. Jr. “A Retirement Income Simulation Model for Farm Operators,” Southern Journal of Agricultural Economics, Volume 8, 1976, pp. 163–168.Google Scholar
[46] U.S. Department of Agriculture. Agricultural Finance Outlook, AFO-19, ESCS, 1978.Google Scholar
[47] U. S. Department of Agriculture. Balance Sheet of the Farming Sector, 1978, Supplement No. 1, Agricultural Information Bulletin No. 416, ESCS, 1978.Google Scholar
[48] U. S. Department of Agriculture. Farm Real Estate Market Developments, ESCS, 1978.Google Scholar
[49] Vandeputte, J. M. and Baker, C. B.. “Specifying the Allocation of Income Between Taxes, Consumption, and Savings in Linear Programming Models,” American Journal of Agricultural Economics, Volume 52, 1970, pp. 521–528.Google Scholar
[50] Walker, Odeli L. and Minnick, Dale L.. Resource Requirements and Income Opportunities for Beginning Farmers in Selected Areas of Oklahoma, Oklahoma Agricultural Experiment Station Bulletin B-729, 1977.Google Scholar
[51] Zusman, P. and Amid, A.. “Simulation: A Tool for Farm Planning Under Conditions of Weather Uncertainty,” Journal of Farm Economics, Volume 47, 1965, pp. 574–594.Google Scholar