Introduction

Family based agricultural/farm households are the principal form of economic organization in most developing countries. Their economic decisions on farm production, labour use and consumption and leisure choices can be quite complex because the farm/household acts both as a producer and consumer unit. In conventional economic analysis production and consumption decisions are treated independently. A firm’s decisions on optimal input use are not affected by the utility maximizing consumption decisions of the owners of the firm. But in the traditional agriculture setting, where the farm family supplies most of the production inputs, household preferences over the consumption bundle, including leisure, can directly affect production decisions. Conversely, production technology and outcomes can directly affect consumption choices, in addition to the conventional income effects.