RISK IN AGRICULTURE AS IMPEDIMENT TO RURAL LENDING - THE CASE OF NORTH-WESTERN KAZAKHSTAN

On the basis of portfolio selection theory, this paper finds that whole-farm risk must be regarded as a major reason for the low level of credit flow to agriculture in North-western Kazakhstan. A quadratic programming model was used in order (a) to demonstrate the comparatively high overall risk exposition of a typical farm, (b) to show that an inflow of working capital could contribute to risk reduction, and (c) to illustrate short-term risk management strategies. Although there may be a role for the government in reducing risk exposition of agriculture in its current form, natural and economic constraints suggest to pave the way for structural reforms that reduce the importance of agriculture in the rural economy. .


Issue Date:
2000
Publication Type:
Working or Discussion Paper
PURL Identifier:
http://purl.umn.edu/14939
Total Pages:
31
JEL Codes:
Q14; G11; C61
Series Statement:
IAMO Discussion Paper No. 24




 Record created 2017-04-01, last modified 2018-01-22

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