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An Economic Risk Analysis of No-till Management for the Rice-Soybean Rotation System used in Arkansas

Author

Listed:
  • Hristovska, Tatjana
  • Watkins, K. Bradley
  • Anders, Merle M.

Abstract

Arkansas is the top domestic rice producer, representing nearly half of total U.S. rice production. Sediment is one of the major pollutants in rice producing areas of Arkansas. In order to mitigate this problem no-tillage management is often recommended. No-tillage is not well understood by farmers who believe that no-till is less profitable due to lower yields offsetting cost savings. This study evaluates the profitability and variability of no-till in the typical rice-soybean rotation used in Arkansas rice production. Crop yields, prices and prices for key production inputs (fuel and fertilizer) are simulated for the rotation, and net return distributions for rice, soybean and the two-year rotation are evaluated for no-till and conventional till using stochastic efficiency with respect to a function (SERF) analysis. The results indicate that both risk neutral and risk-averse rice producers would prefer no-till over conventional till management in the two year rice-soybean rotation, and that no-till soybeans contribute greatly to the overall profitability of the rotation.

Suggested Citation

  • Hristovska, Tatjana & Watkins, K. Bradley & Anders, Merle M., 2012. "An Economic Risk Analysis of No-till Management for the Rice-Soybean Rotation System used in Arkansas," 2012 Annual Meeting, February 4-7, 2012, Birmingham, Alabama 119676, Southern Agricultural Economics Association.
  • Handle: RePEc:ags:saea12:119676
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    File URL: http://purl.umn.edu/119676
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    References listed on IDEAS

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    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(02), August.
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    Keywords

    simulation; rice-soybean; no tillage-profitability; risk analysis; Environmental Economics and Policy; Farm Management; Resource /Energy Economics and Policy;

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