98
in the study area and the crops most consistent with these different
income goals.
Maximize the Probability of Realizing a Selected Income Level
The minimum necessary income level chosen for the study area was
15,000 pesos per semester. This amount is one-half of the figure
generally given as an acceptable income, and enough to support an
average family for this short period of time. Table 20 gives the
number of hectares required to earn 15,000 pesos with the indicated
probability of attainment. The expected profits in Table 20 are taken
from Table 3^ in the appendix. These profit levels are the lowest
that were considered acceptable for application in the risk model.
r ~ - '
The probabilities of realizing these profits were calculated from data
given in Table 35 by summing the probability of occurrence of each
yield-price combination that produced an acceptable profit. If pro
duction in the first semester were sufficient to yield the 30,000 pesos
which satisfies the annual minimum necessary income, then this conser
vative approach could be abandoned and some income maximizing scheme
adopted. However, if the first semester crop is poor, the program used
in the first semester would be used again.
The analysis indicates that rice, sesame, and sorghum would each
require about 20 hectares to provide 15,000 pesos per semester with
close to an 80 percent chance of success. Sorghum offers the highest
probability of attaining the necessary income level. However, if the
farm is used for rice production, the probability of success for rice
is perhaps not sufficiently lower (.78 for rice versus .83 for sorghum)
to warrant 20 hectares of sorghum on an otherwise homogeneous crop
area.