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Abstract
Farmers in developing countries have limited opportunities for borrowing to even
out variability associated with risky farm income, but they can save. A dynamic
programming model of savings is presented in the current paper which examines
optimal savings strategies for farmers, using a case study of integrated rice-shrimp
farms in Vietnam. It is shown that when savings are accounted for, the expected
utility ranking of different risky farm choices may not differ that much between
farmers with different levels of risk aversion.