For producers, a normal strategy to circumvent uncertainty is to diversify production to encompass different commodities whose prices are not correlated. Of course, while diversification can help reduce risk, it can also reduce advantages related to increasing returns, and might lead to investment in less risky but less profitable crops. But in general, risk averse producers are likely to produce less than under more certain situations [Holt and Aradhyula (1990)]. This may be particularly true if the costs of investments required for production are high.