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Are Fungicides, Nitrogen And Plant Growth Regulators Risk‐Reducing? Empirical Evidence From Swiss Wheat Production

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  • Uri Regev
  • Nikolaus Gotsch
  • Peter Rieder

Abstract

The importance of short‐run risk in Swiss wheat production is explored empirically by using the moment‐based approach. Marginal contributions of controlled and uncontrolled inputs to revenue variance are estimated and then used to test the hypotheses that chemical pesticides and nitrogen are risk increasing. Fungicides are shown to have a statistically significant risk‐increasing effect on revenue at low levels of rainfall. There is no conclusive evidence that nitrogen and plant growth regulators are either risk‐reducing or risk‐increasing. Comparison of conventional and organic wheat growers shows that while yield variance is lower, revenue variance is higher for conventional growers. This is because the latter are protected from market risks by guaranteed prices, while prices of organic wheat fluctuate highly. This result supports the hypothesis that chemical pesticides and nitrogen may be risk‐increasing inputs, at least in some circumstances.

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  • Uri Regev & Nikolaus Gotsch & Peter Rieder, 1997. "Are Fungicides, Nitrogen And Plant Growth Regulators Risk‐Reducing? Empirical Evidence From Swiss Wheat Production," Journal of Agricultural Economics, Wiley Blackwell, vol. 48(1‐3), pages 167-178, January.
    • Handle: RePEc:bla:jageco:v:48:y:1997:i:1-3:p:167-178
    DOI: 10.1111/j.1477-9552.1997.tb01143.x
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    References listed on IDEAS

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    2. Karagiannis, Giannis, 1999. "Proportional Profit Taxes And Resource Management Under Production Uncertainty," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 24(2), pages 1-11, December.
    3. Petersen, E. H. & Fraser, R. W., 2001. "An assessment of the value of seasonal forecasting technology for Western Australian farmers," Agricultural Systems, Elsevier, vol. 70(1), pages 259-274, October.
    4. Carpentier, Alain & Gohin, Alexandre & Sckokai, Paolo & Thomas, Alban, 2015. "Economic modelling of agricultural production: past advances and new challenges," Revue d'Etudes en Agriculture et Environnement, Editions NecPlus, vol. 96(01), pages 131-165, March.
    5. Niklas Möhring & Martina Bozzola & Stefan Hirsch & Robert Finger, 2020. "Are pesticides risk decreasing? The relevance of pesticide indicator choice in empirical analysis," Agricultural Economics, International Association of Agricultural Economists, vol. 51(3), pages 429-444, May.
    6. Renan-Ulrich Goetz & Alois Keusch & Joan Ribas-Tur, 2005. "The Efficiency of Direct Payments versus Tax Reductions under Uncertainty," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 141(I), pages 115-127, March.
    7. Lichtenberg, Erik, 2002. "Agriculture and the environment," Handbook of Agricultural Economics, in: B. L. Gardner & G. C. Rausser (ed.), Handbook of Agricultural Economics, edition 1, volume 2, chapter 23, pages 1249-1313, Elsevier.
    8. Benjamin Dequiedt & Emmanuel Servonnat, 2016. "Risk as a limit or an opportunity to mitigate GHG emissions? The case of fertilisation in agriculture," Working Papers 1606, Chaire Economie du climat.
    9. Möhring, Niklas & Dalhaus, Tobias & Enjolras, Geoffroy & Finger, Robert, 2020. "Crop insurance and pesticide use in European agriculture," Agricultural Systems, Elsevier, vol. 184(C).
    10. Lien, Gudbrand & Kumbhakar, Subal C. & Mishra, Ashok K. & Hardaker, J. Brian, 2022. "Does risk management affect productivity of organic rice farmers in India? Evidence from a semiparametric production model," European Journal of Operational Research, Elsevier, vol. 303(3), pages 1392-1402.

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