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A methodological way of evaluating innovative cropping systems integrating risk beliefs and risk preferences

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  • Caroline Roussy

    () (UMR 1302 Structures et Marchés Agricoles, Ressources et Territoires - INRA - Institut National de la Recherche Agronomique - AGROCAMPUS OUEST - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement - SMART - Structures et Marchés Agricoles, Ressources et Territoires, ADEME - Agence de l'Environnement et de la Maîtrise de l'Energie)

  • Aude Ridier

    () (UMR 1302 Structures et Marchés Agricoles, Ressources et Territoires - INRA - Institut National de la Recherche Agronomique - AGROCAMPUS OUEST - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement - SMART - Structures et Marchés Agricoles, Ressources et Territoires, AGROCAMPUS OUEST - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement)

  • Karim Chaïb

    (INPT - EI Purpan - Ecole d'Ingénieurs de Purpan - Toulouse INP - Institut National Polytechnique (Toulouse) - Université Fédérale Toulouse Midi-Pyrénées)

  • Arnaud Reynaud

    () (LERNA - Economie des Ressources Naturelles - UT1 - Université Toulouse 1 Capitole - INRA - Institut National de la Recherche Agronomique - CEA - Commissariat à l'énergie atomique et aux énergies alternatives)

  • Stéphane Couture

    () (UBIA - Unité de Biométrie et Intelligence Artificielle - INRA - Institut National de la Recherche Agronomique)

Abstract

In the paper, we propose a methodological way of leading an economical assessment of innovative cropping systems (ICSs). The originality lies in the integration of the crop management flexibility and the farmers' risk perception and risk preferences. Two conventional cropping systems have been studied (continuous irrigated maize and wheat/sunflower rotation). For each of them, an innovative long rotation has been co-designed by farmers to reach various objectives, notably reduce the pressure on natural resources. The methodological protocol is tested thought a sample of 23 specialized cash crop farmers of Southwestern France is surveyed: subjective probabilities linked to climatic risk perceived are assessed and farmers' risk aversion is elicited through experimental lotteries. Without risk consideration, the adoption of ICSs should be discouraged, given the 2010-2011 crop price situation (mean gross margin loss of about 15 %). Accounting for the farmers' risk perception and risk aversion, and using a risk criteria analysis the results are more mitigated. An adoption premium, computed for each farmer, shows that although all farmers are almost equally risk averse, the levels of adoption premiums are heterogeneous, due to different individual risk perceptions. Finally the paper proposes a method to account for risk preferences and subjective beliefs that raise heterogeneity in the attitude towards innovative cropping systems…

Suggested Citation

  • Caroline Roussy & Aude Ridier & Karim Chaïb & Arnaud Reynaud & Stéphane Couture, 2012. "A methodological way of evaluating innovative cropping systems integrating risk beliefs and risk preferences," Post-Print hal-01133976, HAL.
  • Handle: RePEc:hal:journl:hal-01133976
    Note: View the original document on HAL open archive server: https://hal.archives-ouvertes.fr/hal-01133976v2
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    References listed on IDEAS

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    1. Kahneman, Daniel & Tversky, Amos, 1979. "Prospect Theory: An Analysis of Decision under Risk," Econometrica, Econometric Society, vol. 47(2), pages 263-291, March.
    2. Just, Richard E., 2003. "Risk research in agricultural economics: opportunities and challenges for the next twenty-five years," Agricultural Systems, Elsevier, vol. 75(2-3), pages 123-159.
    3. Aubry, C. & Papy, F. & Capillon, A., 1998. "Modelling decision-making processes for annual crop management," Agricultural Systems, Elsevier, vol. 56(1), pages 45-65, January.
    4. Arnaud Reynaud & Stéphane Couture, 2012. "Stability of risk preference measures: results from a field experiment on French farmers," Theory and Decision, Springer, vol. 73(2), pages 203-221, August.
    5. Charles A. Holt & Susan K. Laury, 2002. "Risk Aversion and Incentive Effects," American Economic Review, American Economic Association, vol. 92(5), pages 1644-1655, December.
    6. Jean-Paul Chavas & Robert G. Chambers & Rulon D. Pope, 2010. "Production Economics and Farm Management: a Century of Contributions," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 92(2), pages 356-375.
    7. Bocqueho, Geraldine & Jacquet, Florence & Reynaud, Arnaud, 2011. "Expected Utility or Prospect Theory Maximizers? Results from a Structural Model based on Field-experiment Data," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 114257, European Association of Agricultural Economists.
    8. Chavas, Jean-Paul, 2004. "Risk Analysis in Theory and Practice," Elsevier Monographs, Elsevier, edition 1, number 9780121706210.
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