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Quantifying the Extent and Nature of Risk in Alternative Cropping Patterns in Claveria, Philippines

Author

Listed:
  • Abedullah

    (University of Agriculture, Faisalabad, Pakistan.)

  • Mubaraik Ali

    (Asian Vegetable Research and Development Center (AVRDC), Taiwan.)

Abstract

The study develops a formulation to decompose variability in profit into price and production effects. The production effect is further segregated into management and weather effects. The formulation is used to compare and decompose risk in the profit of three existing cropping patterns (corn-corn, corn-fallow, and rice-fallow) in the rainfed areas of Claveria, northern Mindanao, Philippines. High variability and low profitability of the crops in a more risky season (dry in our case) can limit cropping intensities in rainfed areas. However, intensification of the crops during the less risky season (wet in our case) can provide the necessary stake to invest in the risky season crops. Although weather is the dominant factor in explaining total variability, this should not be interpreted as a general rule for all agricultural environments. In an environment where input intensity is high, and input-output markets are inefficient, management and price effects can dominate the weather effect.

Suggested Citation

  • Abedullah & Mubaraik Ali, 2006. "Quantifying the Extent and Nature of Risk in Alternative Cropping Patterns in Claveria, Philippines," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 45(2), pages 261-280.
    • Handle: RePEc:pid:journl:v:45:y:2006:i:2:p:261-280
    as

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    File URL: http://www.pide.org.pk/pdf/PDR/2006/Volume2/261-280.pdf
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Cropping Pattern; Weather Risk; Management Risk; Price Risk; Profit; Expected Utility;
    All these keywords.

    JEL classification:

    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets

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