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Optimizing whole-farm management considering price and climate risks

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  • Lehmann, Niklaus
  • Finger, Robert

Abstract

We investigate impacts of climate change (CC) and likely increases in price risks on income, income variability, utility and on adaptation responses in crop production in Western Switzerland. To this end, a bio-economic model is used that combines a crop growth model with an economic decision model non-parametrically using genetic algorithms. Our analysis focuses on the farm-level, which enables us to integrate a much wider set of potential adaptation responses in our analysis. The model is applied to four scenarios that represent likely changes in environmental conditions due to CC as well as increasing price risks due to market liberalization, and combinations thereof. It shows that CC has the larger influence on farm-level income and utility as well as on management decisions. In contrast, the increasing price variability has only small impacts on input use. However, both CC and increasing price volatility contribute to an increasing farm-level income risk.

Suggested Citation

  • Lehmann, Niklaus & Finger, Robert, 2012. "Optimizing whole-farm management considering price and climate risks," 123rd Seminar, February 23-24, 2012, Dublin, Ireland 122533, European Association of Agricultural Economists.
    • Handle: RePEc:ags:eaa123:122533
    DOI: 10.22004/ag.econ.122533
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    1. Briner, Simon & Finger, Robert, 2012. "Bio-economic modelling of decisions under yield and price risk for suckler cow farms," 123rd Seminar, February 23-24, 2012, Dublin, Ireland 122547, European Association of Agricultural Economists.
    2. Robert Finger & Nadja El Benni, 2012. "A Note on Price Risks in Swiss Crop Production – Empirical Results and Comparisons with other Countries," Journal of Socio-Economics in Agriculture (Until 2015: Yearbook of Socioeconomics in Agriculture), Swiss Society for Agricultural Economics and Rural Sociology, vol. 5(1), pages 131-151.

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    Keywords

    Risk and Uncertainty;

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