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The economic value of climate information for water stress management in crop production: an Austrian case study

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  • Mitter, H.
  • Schmid, E.

Abstract

Climate information appears to be underutilized in water stress management in agriculture. A systematic analysis of potential impacts related to multi-seasonal dry spells, effective adaptation measures, and the economic value of climate information may inform decision making and facilitate the uptake and use of climate information. Hence, we have developed an integrated modeling framework consisting of a statistical climate model, a crop rotation model, a bio-physical process model, a portfolio optimization model, the computation of the economic value of climate information, and a spatial hot spot analysis and applied it to the context of water stress management in crop production in Austria. Results from the integrated modeling framework show that the average economic value of climate information ranges between 13 and 99 /ha for Austrian cropland, depending on the scenario of multi-seasonal dry spells and the farmers risk aversion level. On average, the value of climate information is highest on flat and productive soils, for root and oil crops, under more extreme dry spells, and if farmers are highly risk averse. Quantifying the value of climate information may guide data provision efforts and highlight agricultural production regions, which would particularly benefit from such information to improve water stress management. Acknowledgement : Research to this article has been supported by the research projects UncertProp Uncertainty propagation in integrated modelling approaches for global change impacts on the bio-economy (KR16AC0K13332) and COMBIRISK Combined weather related risk assessment monitor for tailoring climate change adaptation in Austrian crop production (KR15AC8K12614), both funded by the Austrian Climate and Energy Fund within the Austrian Climate Research Programme.

Suggested Citation

  • Mitter, H. & Schmid, E., 2018. "The economic value of climate information for water stress management in crop production: an Austrian case study," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277099, International Association of Agricultural Economists.
  • Handle: RePEc:ags:iaae18:277099
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    References listed on IDEAS

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    1. Cabrera, Victor E. & Letson, David & Podesta, Guillermo, 2007. "The value of climate information when farm programs matter," Agricultural Systems, Elsevier, vol. 93(1-3), pages 25-42, March.
    2. Choi, Hyung Sik & Schneider, Uwe A. & Rasche, Livia & Cui, Junbo & Schmid, Erwin & Held, Hermann, 2015. "Potential effects of perfect seasonal climate forecasting on agricultural markets, welfare and land use: A case study of Spain," Agricultural Systems, Elsevier, vol. 133(C), pages 177-189.
    3. Salvatore Di Falco, 2014. "Adaptation to climate change in Sub-Saharan agriculture: assessing the evidence and rethinking the drivers," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 41(3), pages 405-430.
    4. Chavas, Jean-Paul, 2004. "Risk Analysis in Theory and Practice," Elsevier Monographs, Elsevier, edition 1, number 9780121706210, July.
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    Keywords

    Environmental Economics and Policy;

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