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Where is Risk in Fumigation Choice: Methyl Bromide versus Alternatives?

Serhat Asci (), John J. VanSickle, Curtiss J. Fry and John Thomas

No 196862, 2015 Annual Meeting, January 31-February 3, 2015, Atlanta, Georgia from Southern Agricultural Economics Association

Abstract: The phaseout of Methyl Bromide (MBr) required by the Montreal Protocol on Substances that Deplete the Ozone Layer has decreased its use in soil fumigation in the United States (U.S.). Reduced supplies also increased the price of MBr and affected producers net revenues and its cost effectiveness as a soil fumigant. The phaseout encouraged some producers to switch to available alternatives. Previous studies using partial budget analysis show that some alternatives are more cost effective with higher yields. Nevertheless, the share of crop acreage treated with MBr remains high, especially for tomatoes and strawberries. This study analyzes producers’ risk and risk aversion to construct a more comprehensive yield and economic analysis of the MBr use decision. The data are collected from fresh tomatoes production trials with MBr and alternatives conducted at the Plant Science Research and Education Unit, University of Florida in Citra, FL. The results show that alternative fumigants (especially carbonated Telone C35 with totally impermeable films) are often cost effective and provide higher yields. However, a risk analysis indicates that MBr has lower downside risk and is still preferred by risk averse producers.

Keywords: Agribusiness; Agricultural and Food Policy; Environmental Economics and Policy; Risk and Uncertainty (search for similar items in EconPapers)
Pages: 16
Date: 2015-01
New Economics Papers: this item is included in nep-agr and nep-env
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Persistent link: https://EconPapers.repec.org/RePEc:ags:saea15:196862

DOI: 10.22004/ag.econ.196862

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