Economic Feasibility of Conservation Tillage with Stochastic Yields and Erosion Rates

Tony Prato

Review of Agricultural Economics, 1990, vol. 12, issue 2, 333-344

Abstract: This paper examines the extent to which stochastic variation in crop yields and erosion rates affect the economic feasibility of, and farmer's willingness to adopt, minimum and no tillage in a northern Idaho watershed. Stochastic variation in yield is evaluated by sampling an empirical frequency distribution of the ratio of yields between conservation and conventional tillage. Variability in yield due to tillage system and weather are separated from variability caused by soil type and management. Stochastic variation in erosion rates is determined by sampling the distribution of erosion prediction errors for the Universal Soil Loss Equation. Expected utility maximization is used to identify the optimal choice of tillage systems for different risk preferences. Stochastic variation in yield due to tillage practice and rainfall was found to have a proportionately greater effect on yield than errors in predicting erosion rates. For the soils, crops and land treatment practices evaluated, risk averse farmers would prefer conventional tillage to minimum and no tillage.

Date: 1990
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