**DESCRIPTION OF COURSES**

**AG ECON 621 AGRICULTURAL PRODUCTION AND RESOURCE ECONOMICS IV (AGRICULTURAL PRODUCTION UNDER RISK) (1L+1P) I**

**Objective**

This course deals with various types of risks in agriculture and their measurement. The concepts of probability, decision theory, Bayes’ theorem, risk programming are discussed.

**Theory**

UNIT I (CONCEPT OF RISK AND UNCERTAINTY IN AGRICULTURE)

Various types of risks in agriculture and their measurement.

UNIT II (DECISION THEORY)

Introduction to decision analysis; Concept of probability, subjective probability and its illustration, estimation of posterior probability in the application of Bayes’ Theorem. Selection of optimal action under risk with and without forecast device. Minimax and Maximin Criteria. General model of discrete decision analysis. Risk response analysis-Supply response risk, formulation of production function under risk, Optimum input decision under risk.

UNIT III (RISK PROGRAMMING MODELS)

Linear risk programming model, Portfolio selection or E-V model, Markowitz model, McInnerrey’s model, Hazell model, Kataoka model. Quadratic programming, Multi-objective programming

**Practicals**

Decision making for optimum cropping plans based on Bayes’ theorem, MOTAD, quadratic risk programming.

**Suggested Readings**

- Anderson, J.R., Dillon, J.L. and Hardaker, B. 1977.
*Agricultural Decision Analysis*. Iowa State University Press. - Sankhyan, P.L. 1986.
*Introduction to the Economics of Agricultural Production,*Prentice Hall of India.