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Abstract

This study was based on the hypothesis that lenders to the rural sector have the potential to affect the rate of agricultural adjustment directly via capital formation. Multi-period linear programming models were developed to quantify the effects of lender policy on farm growth for wheat growing, dairy and sheep properties. Three basic models were used to represent different farm management types for each industry group of models. The models included the production, marketing, taxation, consumption and investment subsystems of the farm. Emphasis in these models was focused on the financial linkages between these various subsystems. In particular, the models investigated the effects of increases in trading bank credit on farm growth.

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