Survey of Impact of Price Risk on Response of Sugar Beet Farmers Using Rational Expectations in Khorasan – Razavi Province

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Abstract

The purpose of this study is to survey of impact of price risk on response of suger beet farmers using rational expections in Khorasan- Razavi province. Hence, model of farmers response during 1981-2010 is estimated with using GMM method.The results indicate  that expected income (wtih sign +), expection of price risk (whit sign -) and last  priod land (with sign -) have a significant effects on land of sugar beet. Variables such as price of sugar beet to wage ratio and technology and variety changes have a postive and significat effect on sugar beet return. Also, personal income and per capita production of sugar beet have a significat and direct relationship with real price of sugar beet. In addition, according to model of response of sugar beet farmers without expected price risk, farmers have a rational behavior in decisions.

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