Sophisticated Program Planning Approaches Generate Large Benefits in High Risk Crop Farming
Oliver Musshoff and
Norbert Hirschauer
No 36865, 82nd Annual Conference, March 31 - April 2, 2008, Royal Agricultural College, Cirencester, UK from Agricultural Economics Society
Abstract:
Agricultural production relies to a great extent on biological processes in natural environments. In addition to volatile prices, it is thus heavily exposed to risks caused by the variability of natural conditions such as rainfall, temperature and pests. With a view to the apparently lacking support of risky farm production program decisions through formal planning models, the objective of this paper is to examine whether, and eventually by how much, farmers’ “intuitive” program decisions can be improved through formal statistical analyses and stochastic optimization models. In this performance comparison, we use the results of the formal planning approach that are generated in a quasi ex-ante analysis as a normative benchmark for the empirically observed ones. To avoid benchmark solutions that would possibly exceed the respective farmer’s risk tolerance, we limit the formal search to a subset of solutions that are second- degree stochastically dominant compared to the farmer’s own decision. We furthermore compare the suitability of different statistical (time series) models to forecast the uncertainty of single gross margins.
Pages: 21
Date: 2008-03-30
References: View references in EconPapers View complete reference list from CitEc
Citations:
Downloads: (external link)
https://ageconsearch.umn.edu/record/36865/files/Musshoff_hirschauer.pdf (application/pdf)
Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
HTML/Text
Persistent link: https://EconPapers.repec.org/RePEc:ags:aes008:36865
DOI: 10.22004/ag.econ.36865
Access Statistics for this paper
More papers in 82nd Annual Conference, March 31 - April 2, 2008, Royal Agricultural College, Cirencester, UK from Agricultural Economics Society Contact information at EDIRC.
Bibliographic data for series maintained by AgEcon Search ().