The adoption of innovative cropping systems under price and production risks: a dynamic model of crop rotation choice
AbstractWe investigate the role played by both production and market risks on farmers’ decision to adopt long rotations considered as innovative cropping systems. We build a multi-period dynamic farm model which arbitrates each year between conventional and innovative rotations. With discrete stochastic programming, the production risk is accounted for as an intra-year risk, yearly farming operations being declined according to a decision tree where probabilities are assigned. The simulations for a sample of 13 farmers who are currently experimenting this innovation in south-western France, show that substantive sunk costs act as incentives to remain in the long rotation when the farmer is supported for his engagement. They also show that both a high risk aversion and a highly positive market trend tend to slow down the conversion towards innovative systems.
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Bibliographic InfoPaper provided by INRA UMR SMART in its series Working Papers SMART - LERECO with number 12-07.
Length: 26 pages
Date of creation: 2012
Date of revision:
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Web page: http://www.rennes.inra.fr/smart_eng/publications/working_papers
More information through EDIRC
innovative cropping systems; dynamic model; crop rotation decision; risk; subjective probabilities;
Other versions of this item:
- Ridier, Aude & Chaib, Karim & Roussy, Caroline, 2012. "The adoption of innovative cropping systems under price and production risks: a dynamic model of crop rotation choice," 123rd Seminar, February 23-24, 2012, Dublin, Ireland 122440, European Association of Agricultural Economists.
- C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
- D0 - Microeconomics - - General
- Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
- Q55 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Technological Innovation
This paper has been announced in the following NEP Reports:
- NEP-AGR-2012-11-17 (Agricultural Economics)
- NEP-ALL-2012-11-17 (All new papers)
- NEP-INO-2012-11-17 (Innovation)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Abadi Ghadim, Amir K. & Pannell, David J., 1999. "A conceptual framework of adoption of an agricultural innovation," Agricultural Economics, Blackwell, vol. 21(2), pages 145-154, October.
- David A. Hennessy, 2004.
"On Monoculture and the Structure of Crop Rotations,"
Center for Agricultural and Rural Development (CARD) Publications
04-wp369, Center for Agricultural and Rural Development (CARD) at Iowa State University.
- David A. Hennessy, 2006. "On Monoculture and the Structure of Crop Rotations," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 88(4), pages 900-914.
- Hennessy, David A., 2004. "On Monoculture and the Structure of Crop Rotations," Staff General Research Papers 12004, Iowa State University, Department of Economics.
- Isik, Murat & Khanna, Madhu & Winter-Nelson, Alex, 2001. "Sequential Investment In Site-Specific Crop Management Under Output Price Uncertainty," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 26(01), July.
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