The adoption of innovative cropping systems under price and production risks: a dynamic model of crop rotation choice

Aude Ridier, Karim Chaib and Caroline Roussy

No 12-07, Working Papers SMART from INRAE UMR SMART

Abstract: We investigate the role played by both production and market risks on farmers’ decision to adopt long rotations considered as innovative cropping systems. We build a multi-period dynamic farm model which arbitrates each year between conventional and innovative rotations. With discrete stochastic programming, the production risk is accounted for as an intra-year risk, yearly farming operations being declined according to a decision tree where probabilities are assigned. The simulations for a sample of 13 farmers who are currently experimenting this innovation in south-western France, show that substantive sunk costs act as incentives to remain in the long rotation when the farmer is supported for his engagement. They also show that both a high risk aversion and a highly positive market trend tend to slow down the conversion towards innovative systems.

Keywords: innovative cropping systems; dynamic model; crop rotation decision; risk; subjective probabilities (search for similar items in EconPapers)
JEL-codes: C61 D0 Q12 Q55 (search for similar items in EconPapers)
Pages: 26 pages
Date: 2012
New Economics Papers: this item is included in nep-agr and nep-ino
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Citations: View citations in EconPapers (2)

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Related works:
Working Paper: The adoption of innovative cropping systems under price and production risks: a dynamic model of crop rotation choice (2012)
Working Paper: The adoption of innovative cropping systems under price and production risks: a dynamic model of crop rotation choice (2012)
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