IDEAS home Printed from https://ideas.repec.org/p/sek/iefpro/4507414.html
   My bibliography  Save this paper

Exploring farmers? selection of crop protection levels as an adaptation strategy to climate risks

Author

Listed:
  • Sonia Quiroga

    () (University of Alcala)

  • Emilio Cerdá

    () (Universidad Complutense de Madrid)

Abstract

Among the challenges facing the European Union agricultural sector in the coming years, the impacts of climate change could lead to much greater variability in farmers? incomes. In this context, the insurance industry will have to develop new instruments to cover farmers? incomes against losses due to meteorological factors. Some protective technologies that farmers can use for climate risk management have associated costs that vary as a function of the losses involved. These sorts of instruments compete with other less flexible instruments such as crop insurance. We here analyse an issue of decision-making, where the farmer can decide how much to invest in protection, as in situations where the farmer chooses which portion of a loss to protect in the case of adverse weather conditions, and we propose optimal management to mitigate the increasing negative effects of climate uncertainty. By analysing the optimal policy in a continuous choice situation, we consider whether farmers, as part of their crop management duties, should opt to protect some portion of their harvest value with available technologies, or whether they should protect the entire crop. To analyse this decision-making problem, we employ the cost-loss ratio model and take risk aversion into account.

Suggested Citation

  • Sonia Quiroga & Emilio Cerdá, 2017. "Exploring farmers? selection of crop protection levels as an adaptation strategy to climate risks," Proceedings of Economics and Finance Conferences 4507414, International Institute of Social and Economic Sciences.
  • Handle: RePEc:sek:iefpro:4507414
    as

    Download full text from publisher

    File URL: https://iises.net/proceedings/7th-economics-finance-conference-tel-aviv-israel/table-of-content/detail?cid=45&iid=021&rid=7414
    File Function: First version, 2017
    Download Restriction: no

    References listed on IDEAS

    as
    1. Cerdá, Emilio & Quiroga, Sonia, 2015. "Analysing the economic value of meteorological information to improve crop risk management decisions in a dynamic context," Economia Agraria y Recursos Naturales, Spanish Association of Agricultural Economists, vol. 15(02).
    2. Quiroga, Sonia & Iglesias, Ana, 2009. "A comparison of the climate risks of cereal, citrus, grapevine and olive production in Spain," Agricultural Systems, Elsevier, vol. 101(1-2), pages 91-100, June.
    3. Mas-Colell, Andreu & Whinston, Michael D. & Green, Jerry R., 1995. "Microeconomic Theory," OUP Catalogue, Oxford University Press, number 9780195102680.
    4. J. Hope & J. Lingard, 1992. "The Influence Of Risk Aversion On The Uptake Of Set‐Aside: A Motad And Crp Approach," Journal of Agricultural Economics, Wiley Blackwell, vol. 43(3), pages 401-411, September.
    5. W.J.R. Alexander & F. Bailey, 2007. "Solar Activity and Climate Change—A Summary," Energy & Environment, , vol. 18(6), pages 801-804, November.
    6. Emilio Cerdá Tena & Sonia Quiroga Gómez, 2011. "Economic value of weather forecasting: the role of risk aversion," TOP: An Official Journal of the Spanish Society of Statistics and Operations Research, Springer;Sociedad de Estadística e Investigación Operativa, vol. 19(1), pages 130-149, July.
    7. Quiroga, Sonia & Cerda, Emilio, 2009. "Optimal crop protection against climate risk in a dynamic cost-loss decision-making model," 2009 Conference, August 16-22, 2009, Beijing, China 51702, International Association of Agricultural Economists.
    8. Gomez-Limon, Jose A. & Arriaza, Manuel & Riesgo, Laura, 2003. "An MCDM analysis of agricultural risk aversion," European Journal of Operational Research, Elsevier, vol. 151(3), pages 569-585, December.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Crop yield protection; climate risks; information value; cost-loss ratio; decision models;

    JEL classification:

    • Q00 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - General
    • C44 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Operations Research; Statistical Decision Theory
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sek:iefpro:4507414. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Klara Cermakova). General contact details of provider: https://iises.net/ .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.