Income potential and stability of diversified Tennessee farms with emphasis on environmental horticulture

Generally, there is a considerable variability in year-to-year farm income for the typical farmer. Variation in farm income poses a risk in agricultural decision making. Diversification among enterprises in farm production has been practiced by producers as one measure against risk. Diversification in farm production involves adoption of a number of production activities instead of a single activity by the producer. Production diversification can potentially be successfully employed to manage price, yield and income risk if different crops, livestock, and or other alternative enterprises react differently to events.;Farmers are diversifying by growing a combination of traditional commodities or enterprises such as crop-livestock mixes on their farms to enhance their incomes and/or to manage risk. However, there are other alternative enterprises available that can be considered for inclusion in farm diversification plans other than traditional commodities. These alternatives are the nontraditional agricultural commodities or enterprises that include environmental horticulture plants (EHPs), flowers, vegetables, and fruits. One of these nontraditional commodity groups is EHPs that can be identified as alternatives enterprises for inclusion in farm diversification plans.;This study explored the potential of environmental horticulture plants for inclusion in farm diversification plans as possible alternative(s) to traditional crop-livestock enterprise(s) in Tennessee. A risk programming model, minimization of total absolute deviations (MOTAD) is used to analyze risk-return tradeoffs when EHPs are included as alternative(s) with conventional farm enterprises in the model.;The results from the analysis showed that three out of five species of EHPs, euonymus, maple, and dogwood appear to be potential alternatives as enterprises in farm diversification plans. The optimal farm plans generated by MOTAD in which risk was considered frequently included euonymus and maple. Inclusion of EHPs with other conventional enterprises in farm plans for farms with different endowments can reduce risk. Therefore, risk can be managed more effectively if EHPs are combined with other conventional enterprises on farms across a variety of different resource situations.