as well as volatility and other risk elements.
The future is less clear with respect to the
development of agricultural equity markets
and the provision of financial expertise and
services to agricultural managers.
Environmental and structural change place
tremendous stress on the financial skills of
agricultural production managers. The short
run critical problem for leveraged managers
is financial survival in the face of disinflation
involving shrinking asset values, depressed
commodity prices, and the apparent necessity
of shrinking aggregate production capacity.
How this crisis period is managed in the
aggregate will, to a large extent, dictate fu-
ture options.
Finance is one of the areas that has been
endured with benevolent neglect in many
land-grant institutions. Thus, it is not clear
that the expertise exists to provide the re-
search and education base for dealing with
the current financial stress in agriculture.
Over the longer run, a broad based program
of finance research and teaching should be
a priority concern. Apparently, the bio-tech-
nology (land based “star war” equivalent) is
receiving strong emphasis. Although tangible
applied results are unlikely in this decade or
even this century, bio-technology is likely to
generate major shifts in relative resource and
product prices, thus putting even greater
stress on the financial management function.
The manner in which financial expertise
is made available in agriculture is uncertain
and yet to be determined. It may be via the
conventional extension structure. An alter-
native may be via independent consulting
firms or by employees of financial institu-
tions. Emergence of more agricultural pro-
duction firms organized by financially oriented
(vs. husbandry) individuals and groups may
also be seen. Still another possibility may
be an equity market-financial management
package.
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Ill