Rationalizing apple growers’ decision making in Germany – a utility based whole farm programming approach

Maren B.K. Rohrig, Bernd Hardeweg and Wolfgang Lentz

International Food and Agribusiness Management Review, 2018, vol. 21, issue 8

Abstract: Commercial apple production is exposed to various sources of risks. This paper presents a normative utilityefficient programming (UEP) approach, calculating optimal farm plans for apple growers in two different regions of Germany. It takes weather-related quality and yield risks, as well as price risks into account. It is based on risk attitude and risk perception collected from a sample of 134 apple growers. After combining subjective estimates of the apple growers with relevant historical data, input data for the UEP-model were derived from Monte-Carlo simulations. The UEP-model determines optimal portfolios, consisting of combinations of apple varieties and risk management instruments. The results indicate that the degrees of risk aversion affect optimum farming strategies only to a minor extent. They also provide evidence that farmers would benefit from a combined frost-hail insurance, whereas the absence of frost irrigation systems may cause high yield-losses in the northern part of Germany.

Keywords: Crop; Production/Industries (search for similar items in EconPapers)
Date: 2018
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Persistent link: https://EconPapers.repec.org/RePEc:ags:ifaamr:284917

DOI: 10.22004/ag.econ.284917

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