Consideration of Natural Disasters in the Economic Analysis of Agricultural Development Projects

Randall Kramer and Anna Lea Grieco

No 197704, 1989 Occasional Paper Series No. 5 from International Association of Agricultural Economists

Abstract: Nearly 90 percent of the world's natural disasters occur in 1DCs. Agricultural sectors are particularly prone to economic damage from natural disaster, yet, economic analyses of agricultural development projects seldom recognize the potential impacts of natural disasters on project net benefits. Several methods are available for incorporating natural disaster information into benefit-oost analysis. Using data from a development project in SL Lucia, a stochastic simulation approach is applied to assess the feasibility of the project with and without a disaster mitigation practice. The mitigation practice is the use of nematicides to reduce wind damage to newly established banana plantings. Mitigatioo is foond to lower the project's expected intemai rate of return and to lower the riskiness of the project. This type of informatioo could be useful to project planners for evaluating disaster mitigation measures and for selecting among ccmpeting projects.

Keywords: Agribusiness; Environmental Economics and Policy; Production Economics (search for similar items in EconPapers)
Pages: 7
Date: 1989
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Persistent link: https://EconPapers.repec.org/RePEc:ags:iaaeo5:197704

DOI: 10.22004/ag.econ.197704

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