Agricultural Finance

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Table of Contents Defining Agricultural Finance Finance Versus Financial Management

Lecture I: Introduction to Agricultural Finance
Charles B. Moss and Michael A. Gunderson
1 Food

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and Resource Economics Department University of Florida

January 7, 2012

Charles B. Moss and Michael A. Gunderson

Lecture I: Introduction to Agricultural Finance

Table of Contents Defining Agricultural Finance Finance Versus Financial Management

1

Defining Agricultural Finance What is Agricultural Finance? Economics and Agricultural Economics Defining Finance Defining Agricultural Finance

2

Finance Versus Financial Management

Charles B. Moss and Michael A. Gunderson

Lecture I: Introduction to Agricultural Finance

Table of Contents Defining Agricultural Finance Finance Versus Financial Management

What is Agricultural Finance? Economics and Agricultural Economics Defining Finance Defining Agricultural Finance

Defining Agricultural Finance?

What is Agricultural Finance?
Agricultural finance is typically taught in agricultural economics or agribusiness departments in colleges of agriculture. Agricultural finance is then defined somehow based on Economics Finance Agriculture

Charles B. Moss and Michael A. Gunderson

Lecture I: Introduction to Agricultural Finance

Table of Contents Defining Agricultural Finance Finance Versus Financial Management

What is Agricultural Finance? Economics and Agricultural Economics Defining Finance Defining Agricultural Finance

Economics and Agricultural Economics
Following Becker economics is the study of the allocation of scarce resources to meet unlimited and competing human wants and desires. Becker has used economic theory to study such factors as marriage, fertility, and even suicide. Agricultural economist reduce the scope of their concer to questions involving agriculture (including production decisions, implications of agricultural policy, and agricultural trade), natural resources, and envionmental issues. Agricultural economics tends to be more applied, less concerned about the development of theory and more concerned with the analysis of policy.

Charles B. Moss and Michael A. Gunderson

Lecture I: Introduction to Agricultural Finance

Table of Contents Defining Agricultural Finance Finance Versus Financial Management

What is Agricultural Finance? Economics and Agricultural Economics Defining Finance Defining Agricultural Finance

Defining Finance
A frequent criticism of neoclassical economics is that it is sterile. By focusing on optimality conditions and efficiency, modern microeconomics has removed the economic agent. Following Mises, the description of economcis abstracts away from the particulars of human action. Similarly, according to Hicks economics tends to be timeless. The production function representing the transformation of inputs into outputs typically does not reference time. Time is an extremely important facet of agricultural production. Most agricultural production processes involve biological processes which occur over time. Most production processes are less than instantaneous. They require the creation of intermediate inputs which must be stored and transported. Charles B. Moss and Michael A. Gunderson Lecture I: Introduction to Agricultural Finance

Table of Contents Defining Agricultural Finance Finance Versus Financial Management

What is Agricultural Finance? Economics and Agricultural Economics Defining Finance Defining Agricultural Finance

Defining Finance - Continued

In fact, the investment in plant and equipment used in the production process can be viewed as the creation of intermediate products It is the existence of these intermediate products (along with the natural means of production such as land) that gives definition to the field of finance.

Charles B. Moss and Michael A. Gunderson

Lecture I: Introduction to Agricultural Finance

Table of Contents Defining Agricultural Finance Finance Versus...
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