Systematic risk management programming of sugarcane production in West Bengal: A target motad analysis

Arnab Roy, Sangmesh Chendrashekhar and M. Sangeetha

Indian Journal of Agricultural Marketing, 2018, vol. 32, issue 3

Abstract: Mathematical modeling method widely used for modeling farmers decision making. In this study Target MOTAD risk programming model applied to determine sugarcane production fluctuation along with other crops. Therefore, MOTAD multi-period programming model with the objective function of maximizing expected net present value was used. Sugarcane price and yield variability were considered as risk factors. According to the collected data, farms have been categorized in large and small in three different zones i.e. Burdwan zone, Birbhum zone and Hoogly zone. Since in risky conditions, sugarcane farmers usually want to minimize the negative deviation of gross margin, the results indicated that farmer are willing to cultivate crops which have less gross margin fluctuation compared to the others. The high yield-risk group consists of sugarcane (CV=61%). The medium yield-risk group consists of lowland rice (CV=22%), potato (CV=29%) and upland rice (CV=29%), while the low yield-risk group consists of jute (CV=9%). It also reveals that unpredictable environment, high crop yield variability and crop price variability, increased cost of cultivation, successive droughts, high debt burden, inadequate supportive government schemes with their inherent flaws, ineffective farm credit and insurance schemes, malpractices by market middlemen.

Keywords: Risk; and; Uncertainty (search for similar items in EconPapers)
Date: 2018
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Persistent link: https://EconPapers.repec.org/RePEc:ags:injagm:399582

DOI: 10.22004/ag.econ.399582

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