On the example of a commercial microfinance institution (MFI) in Tanzania this paper investigates first whether agricultural firms have a different probability to get a loan and whether their loans are differently volume rationed than loans to non-agricultural firms. Second, we analyze whether...

Replaced with revised version of paper 5/26/11.

In agriculture, long-term decisions are usually made in an environment which is almost completely dynamic. For example, uncertainty arises from weather and climatic conditions. (Dis)investment in irrigation technology on farms has become more prominent over the past decade. The use of irrigation...

Optimization has been recognized as a powerful tool in teaching and research for a long time. In spite of its well known problem solving capacity, some methodological obstacles have persisted over the years. The main problem is that stochastic variables and their correlations cannot be...

Investment decisions are, as a rule, characterized by uncertainty, irreversibility and flexibility. Simple net present value calculations will not account for these features. In many situations even flexible investment planning with decision trees, which represents the most advanced method of...

Since the mid-nineties, agricultural economists discuss the suitability of “weather derivatives†as hedging instruments for volumetric risks in agriculture. Contrary to traditional insurance contracts, the payoffs of such derivatives are linked to weather indices (e.g. accumulated...

In this paper we examine whether there is room for improvement in farm program decisions through the integration of formal mathematical optimisation into the planning process. Probing the potential for improvement, we investigate the cases of four Brandenburg cash crop farms over the last six...

In this study, we experimentally analyze the investment behavior of smallholder farmers in Uganda. We consider a problem of optimal stopping, stylizing an option to invest in a project. We ascertain whether, and to what extent, the real options approach and the classical investment theory can...

Since the mid-nineties, agricultural economists discuss the suitability of “weather derivatives” as hedging instruments for volumetric risks in agriculture. Contrary to traditional insurance contracts, the payoffs of such derivatives are linked to weather indices (e.g. accumulated rainfall...