Fluctuating annual harvest volumes create a peak load problem in the provision of grain storage capacity. There are a number of technologies for handling and storing grain, ranging from capital intensive to labour intensive. Optimal provision of grain storage capacity can therefore be analysed in the framework of the conventional peak load pricing model. A revised version of the peak load pricing model, with specific application to investment in centralized grain storage capacity, is presented. The implications of economies of scale in the capital intensive storage technologies and of the availability of low cost options to central storage are discussed.


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