IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this paper or follow this series

Sophisticated Program Planning Approaches Generate Large Benefits in High Risk Crop Farming

  • Musshoff, Oliver
  • Hirschauer, Norbert

Agricultural production relies to a great extent on biological processes in natural environments. In addition to volatile prices, it is thus heavily exposed to risks caused by the variability of natural conditions such as rainfall, temperature and pests. With a view to the apparently lacking support of risky farm production program decisions through formal planning models, the objective of this paper is to examine whether, and eventually by how much, farmers’ “intuitive” program decisions can be improved through formal statistical analyses and stochastic optimization models. In this performance comparison, we use the results of the formal planning approach that are generated in a quasi ex-ante analysis as a normative benchmark for the empirically observed ones. To avoid benchmark solutions that would possibly exceed the respective farmer’s risk tolerance, we limit the formal search to a subset of solutions that are second- degree stochastically dominant compared to the farmer’s own decision. We furthermore compare the suitability of different statistical (time series) models to forecast the uncertainty of single gross margins.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://purl.umn.edu/36865
Download Restriction: no

Paper provided by Agricultural Economics Society in its series 82nd Annual Conference, March 31 - April 2, 2008, Royal Agricultural College, Cirencester, UK with number 36865.

as
in new window

Length:
Date of creation: 30 Mar 2008
Date of revision:
Handle: RePEc:ags:aes008:36865
Contact details of provider: Web page: http://www.aes.ac.uk
Email:


More information through EDIRC

References listed on IDEAS
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.:

as in new window
  1. Okunev, John & Dillon, John L., 1988. "A linear programming algorithm for determining mean-Gini efficient farm plans," Agricultural Economics, Blackwell, vol. 2(3), pages 273-285, November.
  2. Bollerslev, Tim, 1986. "Generalized autoregressive conditional heteroskedasticity," Journal of Econometrics, Elsevier, vol. 31(3), pages 307-327, April.
  3. repec:ner:tilbur:urn:nbn:nl:ui:12-369795 is not listed on IDEAS
  4. Hardaker, J. Brian & Patten, Louise H. & Pannell, David J., 1988. "Utility-Efficient Programming For Whole-Farm Planning," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 32(02-03).
  5. Darren Hudson & Keith Coble & Jayson Lusk, 2005. "Consistency of risk premium measures," Agricultural Economics, International Association of Agricultural Economists, vol. 33(1), pages 41-49, 07.
  6. Steen Koekebakker & Gudbrand Lien, 2004. "Volatility and Price Jumps in Agricultural Futures Prices—Evidence from Wheat Options," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 86(4), pages 1018-1031.
  7. Rulon D. Pope, 2003. "Agricultural Risk Analysis: Adequacy of Models, Data, and Issues," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 85(5), pages 1249-1256.
  8. Okunev, John & Dillon, John L., 1988. "A Linear Programming Algorithm for Determining Mean-Gini Efficient Farm Plans," Agricultural Economics of Agricultural Economists, International Association of Agricultural Economists, vol. 2(3), November.
  9. B. Curtis Eaves, 1971. "On Quadratic Programming," Management Science, INFORMS, vol. 17(11), pages 698-711, July.
  10. Jolly, Robert W., 1983. "Risk Management in Agricultural Production," Staff General Research Papers 11459, Iowa State University, Department of Economics.
  11. Adams, Richard M. & Menkhaus, Dale J. & Woolery, Bruce A., 1980. "Alternative Parameter Specification In E, V Analysis: Implications For Farm Level Decision Making," Western Journal of Agricultural Economics, Western Agricultural Economics Association, vol. 5(01), July.
  12. D. Sornette & P. Simonetti & J. V. Andersen, 1999. ""Nonlinear" covariance matrix and portfolio theory for non-Gaussian multivariate distributions," Papers cond-mat/9903203, arXiv.org.
  13. Brekke, Kjell Arne & Moxnes, Erling, 2003. "Do numerical simulation and optimization results improve management?: Experimental evidence," Journal of Economic Behavior & Organization, Elsevier, vol. 50(1), pages 117-131, January.
  14. Dickey, David A & Fuller, Wayne A, 1981. "Likelihood Ratio Statistics for Autoregressive Time Series with a Unit Root," Econometrica, Econometric Society, vol. 49(4), pages 1057-72, June.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:ags:aes008:36865. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (AgEcon Search)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.