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Farm-level impacts of prolonged drought: is a multiyear event more than the sum of its parts?

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  • Peck, Dannele E.
  • Adams, Richard M.

Abstract

A multiyear discrete stochastic programming model with uncertain water supplies and inter-year crop dynamics is developed to determine: (i) whether a multiyear drought’s impact can be more than the sum of its parts, and (ii) whether optimal response to 1 year of drought can increase a producer’s vulnerability in subsequent years of drought. A farm system that has inter-year crop dynamics, but lacks inter-annual water storage capabilities, is used as a case study to demonstrate that dynamics unrelated to large reservoirs or groundwater can necessitate a multiyear model to estimate drought’s impact. Results demonstrate the importance of analysing individual years of drought in the context of previous and future years of drought.

Suggested Citation

  • Peck, Dannele E. & Adams, Richard M., 2010. "Farm-level impacts of prolonged drought: is a multiyear event more than the sum of its parts?," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 54(1), pages 1-18.
    • Handle: RePEc:ags:aareaj:161995
    DOI: 10.22004/ag.econ.161995
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    Cited by:

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    2. Connor, Jeffery D. & Kandulu, John M. & Bark, Rosalind H., 2014. "Irrigation revenue loss in Murray–Darling Basin drought: An econometric assessment," Agricultural Water Management, Elsevier, vol. 145(C), pages 163-170.
    3. Birthal, Pratap S. & Negi, Digvijay S. & Khan, Md. Tajuddin & Agarwal, Shaily, 2015. "Is Indian agriculture becoming resilient to droughts? Evidence from rice production systems," Food Policy, Elsevier, vol. 56(C), pages 1-12.
    4. Farnaz Pourzand & Ilan Noy & Yigit Saglam, 2019. "Droughts and farms' financial performance in New Zealand: a micro farm-level study," CESifo Working Paper Series 7633, CESifo.
    5. Kang, Hyunwoo & Sridhar, Venkataramana & Mills, Bradford F. & Hession, W. Cully & Ogejo, Jactone A., 2019. "Economy-wide climate change impacts on green water droughts based on the hydrologic simulations," Agricultural Systems, Elsevier, vol. 171(C), pages 76-88.
    6. Hutchings, Timothy R. & Nordblom, Thomas L., 2011. "A financial analysis of the effect of the mix of crop and sheep enterprises on the risk profile of dryland farms in south-eastern Australia," AFBM Journal, Australasian Farm Business Management Network, vol. 8(1), pages 1-23, October.
    7. Pourzand, Farnaz & Noy, Ilan & Sağlam, Yiğit, 2019. "Droughts and farms’ financial performance in New Zealand: A micro farm level study," Working Paper Series 8159, Victoria University of Wellington, School of Economics and Finance.
    8. Bastian, Christopher T. & Gray, Stephen T. & Peck, Dannele E. & Ritten, John P. & Hansen, Kristiana M. & Krall, James M. & Paisley, Steven I., 2011. "The Nature of Climate Science for the Rocky Mountain West: Implications for Economists Trying to Help Agriculture Adapt," Western Economics Forum, Western Agricultural Economics Association, vol. 10(2), pages 1-10.
    9. Levente Timar & Eyal Apatov, 2020. "A Growing Problem: Exploring Livestock Farm Resilience to Droughts in Unit Record Data," Working Papers 20_14, Motu Economic and Public Policy Research.
    10. Farnaz Pourzand & Ilan Noy & Yiğit Sağlam, 2020. "Droughts and farms’ financial performance: a farm‐level study in New Zealand," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 64(3), pages 818-844, July.
    11. Peck, Dannele E. & Adams, Richard M., 2011. "A reply to ‘Multiyear versus single-year drought: a comment on Peck and Adams’," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 55(3), pages 1-4, September.
    12. Gil, Marina & Garrido, Alberto & Gómez-Ramos, Almudena, 2011. "Economic analysis of drought risk: An application for irrigated agriculture in Spain," Agricultural Water Management, Elsevier, vol. 98(5), pages 823-833, March.
    13. Fan, Yubing & Massey, Raymond E. & Park, Seong C., 2017. "Multicrop Production Decisions and Economic Irrigation Water Use Efficiency: Effects of Water Costs, Pressure Irrigation Adoption and Climate Determinants," 2017 Annual Meeting, July 30-August 1, Chicago, Illinois 258561, Agricultural and Applied Economics Association.
    14. Tiho Ancev, 2011. "Multiyear versus single‐year drought: a comment on Peck and Adams," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 55(3), pages 451-453, July.
    15. Guven, Cahit & Tong, Lan & Ulubasoglu, Mehmet, 2021. "Growing More Rice with Less Water: The System of Rice Intensification and Rice Productivity in Vietnam," MPRA Paper 108768, University Library of Munich, Germany.

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