UNRELIABLE MARKETS AND PERISHABLE PRODUCTS

This paper considers the behaviour of a farmer facing an unreliable market for his perishable product. In the context of a simple model, where unreliability is characterised as demand uncertainty at the going market price, the optimal responses of a risk-averse farmer both to the introduction and to an increase in the level of unreliability are analysed. Conditions determining these responses are described and are shown to contrast markedly with the conditions determining a farmer's responses to uncertainty in other parameters such as price. Finally, the policy implications of the paper are discussed, with particular reference to the problem of unstable supply.