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Analyzing the effects of risk and uncertainty on optimal tillage and nitrogen fertilizer intensity for field crops in Germany

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  • Gandorfer, Markus
  • Pannell, David
  • Meyer-Aurich, Andreas

Abstract

This study provides a risk analysis of long-term field experiments in Germany (Bavaria) on various field crops (potato, wheat and corn), grown in rotation, under a variety of different tillage and nitrogen management systems. The field experiment provided yield and input data for the analysis, and was combined with market data relevant to the case-study region. The emphasis of the analysis is on the interaction between risk and tillage and nitrogen strategies. Over the whole rotation (corn-wheat-potato-wheat), conventional tillage combined with conventional nitrogen rates is optimal, both for risk-neutral and risk-averse farmers. Although less intensive management practices involve lower risk, the decrease in risk premium is not sufficient to alter the ranking of strategies, even for farmers with higher levels of risk aversion. Reducing nitrogen rates would be costly to farmers, especially under reduced or shallow tillage. Decoupled farm subsidies within the expected utility model show that even for a scenario with no subsidies our conclusions do not change.

Suggested Citation

  • Gandorfer, Markus & Pannell, David & Meyer-Aurich, Andreas, 2011. "Analyzing the effects of risk and uncertainty on optimal tillage and nitrogen fertilizer intensity for field crops in Germany," Agricultural Systems, Elsevier, vol. 104(8), pages 615-622, October.
  • Handle: RePEc:eee:agisys:v:104:y:2011:i:8:p:615-622
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    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. 312 – The economics of nitrogen in agriculture
      by David Pannell in Pannell Discussions on 2018-02-06 02:15:29

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    3. Kerry J. Stott & Brendan Christy & Malcolm McCaskill & Kurt K. Benke & Penny Riffkin & Garry J. O'Leary & Robert Norton, 2020. "Integrating crop modelling and production economics to investigate multiple nutrient deficiencies and yield gaps," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 64(3), pages 655-676, July.
    4. Monjardino, Marta & McBeath, T. & Brennan, Lisa E. & Llewellyn, Rick S., 2012. "Revisiting N fertilisation rates in low-rainfall grain cropping regions of Australia: A risk analysis," 2012 Conference (56th), February 7-10, 2012, Fremantle, Australia 124339, Australian Agricultural and Resource Economics Society.
    5. Meyer-Aurich, Andreas & Gandorfer, Markus & Trost, Benjamin & Ellmer, Frank & Baumecker, Michael, 2016. "Risk efficiency of irrigation to cereals in northeast Germany with respect to nitrogen fertilizer," Agricultural Systems, Elsevier, vol. 149(C), pages 132-138.
    6. 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.
    7. Komarek, Adam M. & MacAulay, T. Gordon, 2013. "Farmer responses to changing risk aversion, enterprise variability and resource endowments," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 57(3).
    8. Wakeyo, Mekonnen B. & Gardebroek, Cornelis, 2013. "Does water harvesting induce fertilizer use among smallholders? Evidence from Ethiopia," Agricultural Systems, Elsevier, vol. 114(C), pages 54-63.
    9. Meyer-Aurich, Andreas & Karatay, Yusuf Nadi, 2019. "Effects of uncertainty and farmers' risk aversion on optimal N fertilizer supply in wheat production in Germany," Agricultural Systems, Elsevier, vol. 173(C), pages 130-139.
    10. Komarek, Adam M. & Bell, Lindsay W. & Whish, Jeremy P.M. & Robertson, Michael J. & Bellotti, William D., 2015. "Whole-farm economic, risk and resource-use trade-offs associated with integrating forages into crop–livestock systems in western China," Agricultural Systems, Elsevier, vol. 133(C), pages 63-72.
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    13. Nordblom, Thomas L. & Hutchings, Timothy R. & Godfrey, Sosheel S. & Schefe, Cassandra R., 2021. "Precision variable rate nitrogen for dryland farming on waterlogging Riverine Plains of Southeast Australia?," Agricultural Systems, Elsevier, vol. 186(C).

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