Using Portfolio Theory in Crop Selection to Ensure the Sustainable Economic Success of New Cropping Enterprises

Lawton Nalley and Andrew Barkley ()

No 187395, 29th West Indies Agricultural Economics Conference, July 17-21, 2011, Saint Vincent, West Indies from Caribbean Agro-Economic Society

Abstract: There are large and often worrisome risks when a country leaves one agricultural sector and invests in another. As the Windward Islands and the Caribbean countries diversify out of the banana and sugar sectors the question arises is how to reduce the risk and ensure returns to producers to successfully and sustainably establish other agricultural enterprises. When producers decide to diversify into a new crop such as maize, wheat, rice, or any crop with multiple cultivars they are faced with not only production decisions but which cultivars to sow. Producers often plant more than one cultivar each year in an attempt to diversify yield risk. However, producers typically select combinations based on cultivar descriptions, intuition, and average yields, potentially ignoring one of the most important pieces of information: the relationship between varieties. Extension agencies worldwide have programs that allow producers to select specific cultivars and receive recommendations on optimum seeding rates, seedbed preparation, seeding date range, and drill width. A critical gap in these recommendations concerns what is perhaps the most important recommendation of all: which varieties to plant for optimal diversification.

Keywords: Agribusiness; Crop Production/Industries; Environmental Economics and Policy (search for similar items in EconPapers)
Pages: 2
Date: 2011
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Persistent link: https://EconPapers.repec.org/RePEc:ags:cars11:187395

DOI: 10.22004/ag.econ.187395

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