Risk management strategies using seasonal climate forecasting in irrigated cotton production: a tale of stochastic dominance

John W. Ritchie, G. Yahya Abawi, Sunil C. Dutta, Trevor R. Harris and Michael Bange

Australian Journal of Agricultural and Resource Economics, 2004, vol. 48, issue 01, 29

Abstract: Decision‐making in agriculture is carried out in an uncertain environment with farmers often seeking information to reduce risk. As a result of the extreme variability of rainfall and stream‐flows in north‐eastern Australia, water supplies for irrigated agriculture are a limiting factor and a source of risk. The present study examined the use of seasonal climate forecasting (SCF) when calculating planting areas for irrigated cotton in the northern Murray Darling Basin. Results show that minimising risk by adjusting plant areas in response to SCF can lead to significant gains in gross margin returns. However, how farmers respond to SCF is dependent on several other factors including irrigators’ attitude towards risk.

Keywords: Crop Production/Industries; Risk and Uncertainty (search for similar items in EconPapers)
Date: 2004
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Citations: View citations in EconPapers (10)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:aareaj:117862

DOI: 10.22004/ag.econ.117862

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