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Comparison of Risk Between Cropping Systems in Eastern Norway

Author

Listed:
  • Lien, Gudbrand D.
  • Flaten, Ola
  • Schumann, Keith D.
  • Richardson, James W.
  • Korsaeth, Audun
  • Eltun, Ragnar

Abstract

The aim of this study was to compare production and policy risk of organic, integrated and conventional cropping systems in Norway. Experimental cropping system data (1991-1999) from eastern Norway were combined with budgeted data. Empirical distributions of total farm income for different cropping systems were estimated with a simulation model that uses a multivariate kernel density function to smooth the limited experimental data. Stochastic efficiency with respect to a function (SERF) was used to rank the cropping systems for farmers with various risk aversion levels. The results show that the organic system had the greatest net farm income variability, but the existing payment system and organic price premiums makes it the most economically viable alternative.

Suggested Citation

  • Lien, Gudbrand D. & Flaten, Ola & Schumann, Keith D. & Richardson, James W. & Korsaeth, Audun & Eltun, Ragnar, 2005. "Comparison of Risk Between Cropping Systems in Eastern Norway," 2005 International Congress, August 23-27, 2005, Copenhagen, Denmark 24663, European Association of Agricultural Economists.
    • Handle: RePEc:ags:eaae05:24663
    DOI: 10.22004/ag.econ.24663
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    References listed on IDEAS

    as
    1. J. Brian Hardaker & James W. Richardson & Gudbrand Lien & Keith D. Schumann, 2004. "Stochastic efficiency analysis with risk aversion bounds: a simplified approach," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 48(2), pages 253-270, June.
    2. Richardson, James W. & Klose, Steven L. & Gray, Allan W., 2000. "An Applied Procedure For Estimating And Simulating Multivariate Empirical (Mve) Probability Distributions In Farm-Level Risk Assessment And Policy Analysis," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 32(2), pages 1-17, August.
    3. Meyer, Jack, 1977. "Choice among distributions," Journal of Economic Theory, Elsevier, vol. 14(2), pages 326-336, April.
    4. Anderson, Jock R. & Dillon, John L. & Hardaker, Brian, 1977. "Agricultural Decision Analysis," Monographs: Applied Economics, AgEcon Search, number 288652, July.
    5. repec:ags:joaaec:v:32:y:2000:i:2:p:299-315 is not listed on IDEAS
    6. Jock R. Anderson, 1974. "Sparse Data, Estimational Reliability, and Risk-Efficient Decisions," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 56(3), pages 564-572.
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