Factors affecting farm enterprise diversification

Ashok K. Mishra, Hisham S. El-Osta, Carmen L. Sandretto

Research output: Contribution to journalArticle

49 Scopus citations

Abstract

Enterprise diversification is a self-insuring strategy used by farmers to protect against risk. This study examines the impact of various farm, operator, and household characteristics on the level of onfarm enterprise diversification. Evidence exists that larger farms are more specialized. Also, farmers who participate in off-farm work, farms located near urban areas, or farms with higher debt-to-asset ratios are less likely to be diversified. In contrast, evidence suggests there is a significant positive relationship between diversification and whether the farm business has crop insurance, is organized as a sole proprietorship, or receives any direct payments from current farm commodity programs.

Original languageEnglish (US)
Pages (from-to)151-166
Number of pages16
JournalAgricultural Finance Review
Volume64
Issue number2
DOIs
StatePublished - Nov 1 2004
Externally publishedYes

Keywords

  • Debt-to-asset ratio
  • Enterprise diversification
  • Farm size
  • Government payments
  • Insurance
  • Location
  • Off-farm income
  • Soil productivity

ASJC Scopus subject areas

  • Agricultural and Biological Sciences (miscellaneous)
  • Economics, Econometrics and Finance (miscellaneous)

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