A Dynamic Stochastic Programming model of crop rotation choice to test the adoption of long rotation under price and production risks

Aude Ridier, Karim Chaib and Caroline Roussy

European Journal of Operational Research, 2016, vol. 252, issue 1, 270-279

Abstract: This article investigates the role played by both production and market risks on cash crop farmers’ decision to adopt long rotations considered as innovative cropping systems. We build a multi-period recursive farm model with Discrete Stochastic Programming. The model arbitrates each year between conventional and innovative, longer rotations. Yearly farming operations are declined according to a decision tree, so that production risk is an intra-year risk. Market risk is considered as an inter-year risk influencing crop successions. Simulations are performed on a specialized French cash crop farm. They show that when the long rotation is subsidized by an area premium, farmers are encouraged to remain in longer rotations. They also show that a high level of risk aversion tends to slow down the conversion towards longer rotations.

Keywords: OR in agriculture; Risk analysis; Stochastic programming; Production (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (17)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ejores:v:252:y:2016:i:1:p:270-279

DOI: 10.1016/j.ejor.2015.12.025

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