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A Dynamic Stochastic Programming model of crop rotation choice to test the adoption of long rotation under price and production risks

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  • Ridier, Aude
  • Chaib, Karim
  • Roussy, Caroline

Abstract

This article investigates the role played by both production and market risks on cash crop farmers’ decision to adopt long rotations considered as innovative cropping systems. We build a multi-period recursive farm model with Discrete Stochastic Programming. The model arbitrates each year between conventional and innovative, longer rotations. Yearly farming operations are declined according to a decision tree, so that production risk is an intra-year risk. Market risk is considered as an inter-year risk influencing crop successions. Simulations are performed on a specialized French cash crop farm. They show that when the long rotation is subsidized by an area premium, farmers are encouraged to remain in longer rotations. They also show that a high level of risk aversion tends to slow down the conversion towards longer rotations.

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  • Ridier, Aude & Chaib, Karim & Roussy, Caroline, 2016. "A Dynamic Stochastic Programming model of crop rotation choice to test the adoption of long rotation under price and production risks," European Journal of Operational Research, Elsevier, vol. 252(1), pages 270-279.
    • Handle: RePEc:eee:ejores:v:252:y:2016:i:1:p:270-279
    DOI: 10.1016/j.ejor.2015.12.025
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