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

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  • Asci, Serhat
  • VanSickle, John J.
  • Fry, Curtiss J.
  • Thomas, John

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.

Suggested Citation

  • Asci, Serhat & VanSickle, John J. & Fry, Curtiss J. & Thomas, John, 2015. "Where is Risk in Fumigation Choice: Methyl Bromide versus Alternatives?," 2015 Annual Meeting, January 31-February 3, 2015, Atlanta, Georgia 196862, Southern Agricultural Economics Association.
    • Handle: RePEc:ags:saea15:196862
    DOI: 10.22004/ag.econ.196862
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    References listed on IDEAS

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    1. J. Brian Hardaker & James W. Richardson & Gudbrand Lien & Keith D. Schumann, 2004. "Stochastic efficiency analysis with risk aversion bounds: a simplified approach," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 48(2), pages 253-270, June.
    2. Richardson, James W. & Klose, Steven L. & Gray, Allan W., 2000. "An Applied Procedure For Estimating And Simulating Multivariate Empirical (Mve) Probability Distributions In Farm-Level Risk Assessment And Policy Analysis," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 32(2), pages 1-17, August.
    3. Byrd, Mark M. & Escalante, Cesar L. & Fonsah, Esendugue Greg & Wetzstein, Michael E., 2007. "Feasible Fumigant-Herbicide System Alternatives to Methyl Bromide for Bell Pepper Producers," Journal of Agribusiness, Agricultural Economics Association of Georgia, vol. 25(1), pages 1-15.
    4. Osteen, Craig D., 2003. "Methyl Bromide Phaseout Proceeds: Users Request Exemptions," Amber Waves:The Economics of Food, Farming, Natural Resources, and Rural America, United States Department of Agriculture, Economic Research Service, pages 1-6, April.
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    Keywords

    Agribusiness; Agricultural and Food Policy; Environmental Economics and Policy; Risk and Uncertainty;
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