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Abstract

In this paper the impact of input use on production risk is analyzed using a generalized stochastic production function model. The data for the study were collected from a sample of 180 Sari Farmers in 1995, selected through a two-stage cluster sampling technique. Then , the three - step nonlinear least square method was used to estimate the equations’ parameters. Empirical results of estimating the stochastic component of production function indicated the postivie and significant effect of seed and labor inputs on production risk. Although farm size show a variance -decreasing effect on yield, but it was not significant. Evaluating the results of deterministic part of the model show a positive relationship between mean yield and inputs of farm size and labor. However ,seed and nitrogen fertilizer were negatively related to the average yield.