Commercial apple production is exposed to various sources of risks. This paper presents a normative utility-efficient programming (UEP) approach, calculating optimal farm plans for apple growers in two different regions of Germany. It takes weather-related quality and yield risks, as well as price risks into account. It is based on risk attitude and risk perception collected from a sample of 134 apple growers. After combining subjective estimates of the apple growers with relevant historical data, input data for the UEP-model were derived from Monte-Carlo simulations. The UEP-model determines optimal portfolios, consisting of combinations of apple varieties and risk management instruments. The results indicate that the degrees of risk aversion affect optimum farming strategies only to a minor extent. They also provide evidence that farmers would benefit from a combined frost-hail insurance, whereas the absence of frost irrigation systems may cause high yield-losses in the northern part of Germany.
Agrarmarkt Informations-Gesellschaft (AMI). 2013. AMI Marktbilanz Obst. 2013. AMI Agrarmarkt Informations-Gesellschaft mbH, Bonn, Germany.
Ahumada, O. and J.R. Villalobos. 2009. Application of planning models in the agri-food supply chain: a review. European Journal of Operational Research 196(1): 1-20.
'Application of planning models in the agri-food supply chain: a review ' () 196 European Journal of Operational Research : 1 -20.
Bobojonov, I. and A. Aw-Hassan. 2014. Impacts of climate change on farm income security in Central Asia: an integrated modeling approach. Agriculture, Ecosystems and Environment 188: 245-255.
'Impacts of climate change on farm income security in Central Asia: an integrated modeling approach ' () 188 Agriculture, Ecosystems and Environment : 245 -255.
Bocquého, G. and F. Jacquet. 2010. The adoption of switchgrass and miscanthus by farmers: impact of liquidity constraints and risk preferences. Energy Policy 38(5): 2598-2607.
'The adoption of switchgrass and miscanthus by farmers: impact of liquidity constraints and risk preferences ' () 38 Energy Policy : 2598 -2607.
Bravin, E., A. Kilchenmann and M. Leumann. 2009. Six hypotheses for profitable apple production based on the economic work-package within the ISAFRUIT Project. Journal of Horticultural Science and Biotechnology. ISAFRUIT Special Issue: 164-167.
'Six hypotheses for profitable apple production based on the economic work-package within the ISAFRUIT Project ', in Journal of Horticultural Science and Biotechnology. ISAFRUIT Special Issue , () 164 -167.
Buchholz, M. and O. Musshoff. 2014. The role of weather derivatives and portfolio effects in agricultural water management. Agricultural Water Management 146: 34-44.
'The role of weather derivatives and portfolio effects in agricultural water management ' () 146 Agricultural Water Management : 34 -44.
Catalá, L.P., G.A. Durand, A.M. Blanco and J.A. Bandoni. 2013. Mathematical model for strategic planning optimization in the pome fruit industry. Agricultural Systems 115: 63-71.
'Mathematical model for strategic planning optimization in the pome fruit industry ' () 115 Agricultural Systems : 63 -71.
Dixit, A.K. and R. Pindyck. 1994. Investment under uncertainty. Princeton University Press, Princeton, NJ, USA.
'Investment under uncertainty', ().
Dorward, A. 1999. Modelling embedded risk in peasant agriculture: methodological insights from northern Malawi. Agricultural Economics 21: 191-203.
'Modelling embedded risk in peasant agriculture: methodological insights from northern Malawi ' () 21 Agricultural Economics : 191 -203.
Ermoliev, Y.M., T.Y. Ermolieva, G.J. MacDonald, V.I. Norkin and A. Amendola. 2000. A system approach to management of catastrophic risks. European Journal of Operational Research 122(2): 452-460.
'A system approach to management of catastrophic risks ' () 122 European Journal of Operational Research : 452 -460.
Federal Statistical Office. 2014. Gesamtwirtschaft and Umwelt – Verbraucherpreisindizes – Verbraucherpreise – Statistisches Bundesamt (Destatis). Available at: http://tinyurl.com/y7dno6se.
Frederick, S., G. Loewenstein and T. O’Donoghue. 2002. Time discounting and time preference: A critical review. Journal of economic literature 40: 351-401.
'Time discounting and time preference: A critical review ' () 40 Journal of economic literature : 351 -401.
Gandorfer, M., A. Hartwich and V. Bitsch. 2016. Hail risk management in fruit production: anti-hail net versus hail insurance in Germany. Acta Horticulturae 1132: 141-146.
'Hail risk management in fruit production: anti-hail net versus hail insurance in Germany ' () 1132 Acta Horticulturae : 141 -146.
Hardaker, J.B., R.B.M. Huirne, J.R. Anderson and G. Lien. 2004. Coping with risk in agriculture, 2nd ed. CAB International, Wallingford, UK.
'Coping with risk in agriculture, 2nd ed', ().
Hoag, D.L. 2010. Applied risk management in agriculture, 1st ed. CRC Press-Taylor and Francis Group, Boca Raton, FL, USA.
'Applied risk management in agriculture', ().
Hoffmann, H., F. Langner and T. Rath. 2012. Simulating the influence of climatic warming on future spring frost risk in Northern German fruit production. Acta Horticulturae 957: 289-296.
'Simulating the influence of climatic warming on future spring frost risk in Northern German fruit production ' () 957 Acta Horticulturae : 289 -296.
Holt, C.A. and S.K. Laury. 2002. Risk aversion and incentive effects. American Economic Review 92(5): 1644-1655.
'Risk aversion and incentive effects ' () 92 American Economic Review : 1644 -1655.
Ihli, H.J., S.C. Maart-Noelck and O. Musshoff. 2014. Does timing matter? A real options experiment to farmers’ investment and disinvestment behaviours. Australian Journal of Agricultural and Resource Economics 58(3): 430-452.
'Does timing matter? A real options experiment to farmers’ investment and disinvestment behaviours ' () 58 Australian Journal of Agricultural and Resource Economics : 430 -452.
Janssen, S. and M.K. van Ittersum. 2007. Assessing farm innovations and responses to policies: A review of bio-economic farm models. Agricultural Systems 94: 622-636.
'Assessing farm innovations and responses to policies: A review of bio-economic farm models ' () 94 Agricultural Systems : 622 -636.
KTBL. 2010. Obstbau. Betriebswirtschaftliche und produktionstechnische Kalkulationen, 4th ed. Kuratorium für Technik und Bauwesen in der Landwirtschaft e.V. (KTBL), Darmstadt, Germany.
Landesamt für Statistik Niedersachsen. 2017. Erntestatistik online – Ernteergebnisse seit 1991. Available at: http://tinyurl.com/y88hxoce.
Lehmann, N., S. Briner and R. Finger. 2013. The impact of climate and price risks on agricultural land use and crop management decisions. Land Use Policy 35: 119-130.
'The impact of climate and price risks on agricultural land use and crop management decisions ' () 35 Land Use Policy : 119 -130.
Lien, G. and J.B. Hardaker. 2001. Whole-farm planning under uncertainty: impacts of subsidy scheme and utility function on portfolio choice in Norwegian agriculture. European Review of Agricultural Economics 28(1): 17-36.
'Whole-farm planning under uncertainty: impacts of subsidy scheme and utility function on portfolio choice in Norwegian agriculture ' () 28 European Review of Agricultural Economics : 17 -36.
Lien, G., S. Størdal, J.B. Hardaker and L.J. Asheim. 2007. Risk aversion and optimal forest replanting: A stochastic efficiency study. European Journal of Operational Research 181(3): 1584-1592.
'Risk aversion and optimal forest replanting: A stochastic efficiency study ' () 181 European Journal of Operational Research : 1584 -1592.
Lien, G., J.B. Hardaker, M.A.P.M. Van Asseldonk and J.W. Richardson. 2011. Risk programming analysis with imperfect information. Annals of Operations Research 190(1): 311-323.
'Risk programming analysis with imperfect information ' () 190 Annals of Operations Research : 311 -323.
Markowitz, H. 2014. Mean-variance approximations to expected utility. European Journal of Operational Research 234(2): 346-355.
'Mean-variance approximations to expected utility ' () 234 European Journal of Operational Research : 346 -355.
Menapace, L., G. Colson and R. Raffaelli. 2013. Risk aversion, subjective beliefs and farmer risk management strategies. American Journal of Agricultural Economics 95(2): 384-389.
'Risk aversion, subjective beliefs and farmer risk management strategies ' () 95 American Journal of Agricultural Economics : 384 -389.
Menapace, L., G. Colson and R. Raffaelli. 2014. Farmers’ climate change risk perceptions: An application of the exchangeability method. Paper presented at the EAAE 2014 Congress, Ljubljana, Slovenia, 26-29 August 2014, pp. 1-13. Available at: http://tinyurl.com/yar2f9cs.
Meyer, A. 2013. Estimating discount factors for public and private goods and testing competing discounting hypotheses. Journal of Risk and Uncertainty 46(2): 133-173.
'Estimating discount factors for public and private goods and testing competing discounting hypotheses ' () 46 Journal of Risk and Uncertainty : 133 -173.
Mouron, P. and R.W. Scholz. 2008. Management influence on income risk in an apple production system on Swiss fruit farms. International Journal of Fruit Science 7(4): 47-70.
'Management influence on income risk in an apple production system on Swiss fruit farms ' () 7 International Journal of Fruit Science : 47 -70.
Ogurtsov, V.A., M.P.A.M. Van Asseldonk and R.B.M. Huirne. 2008. Assessing and modelling catastrophic risk perceptions and attitudes in agriculture: a review. NJAS – Wageningen Journal of Life Sciences 56(1/2): 39-58.
'Assessing and modelling catastrophic risk perceptions and attitudes in agriculture: a review ' () 56 NJAS – Wageningen Journal of Life Sciences : 39 -58.
Pandey, S. and J.B. Hardaker. 1995. The role of modelling in the quest for sustainable farming systems. Agricultural Systems 47: 439-450.
'The role of modelling in the quest for sustainable farming systems ' () 47 Agricultural Systems : 439 -450.
Röhrig, M.B.K., B. Hardeweg and W. Lentz. 2018. Efficient farming options for German apple growers under risk – a stochastic dominance Approach. International Food and Agribusiness Management Review 21(1): 101-120.
'Efficient farming options for German apple growers under risk – a stochastic dominance Approach ' () 21 International Food and Agribusiness Management Review : 101 -120.
Senkondo, E.M.M. 2000. Risk attitude and risk perception in agroforestry decisions: the case of Babati, Tanzania. Dissertation, Wageningen University, Wageningen, the Netherlands.
'Risk attitude and risk perception in agroforestry decisions: the case of Babati, Tanzania', ().
Thomson, G., M. McCaskill, I. Goodwin, G. Kearney and S. Lolicato. 2014. Potential impacts of rising global temperatures on Australia’s pome fruit industry and adaptation strategies. New Zealand Journal of Crop and Horticultural Science 42(1): 21-30.
'Potential impacts of rising global temperatures on Australia’s pome fruit industry and adaptation strategies ' () 42 New Zealand Journal of Crop and Horticultural Science : 21 -30.
Trigeorgis, L. 1996. Real options. Managerial flexibility and strategy in resource allocation. MIT Press, Cambridge, MA, USA.
'Real options. Managerial flexibility and strategy in resource allocation', ().
Waibel, H., H. Garming and K. Zander. 2001. Die Umstellung auf ökologischen Apfelanbau als risikobehaftete Investition. Agrarwirtschaft 50(7): 439-450.
'Die Umstellung auf ökologischen Apfelanbau als risikobehaftete Investition ' () 50 Agrarwirtschaft : 439 -450.
Way, R.D. 1995. Pollination and fruit set in fruit crops. Cornell Cooperative Extension Information Bulletin 237, New York, NY, USA.
'Pollination and fruit set in fruit crops ', in Cornell Cooperative Extension Information Bulletin , ().
Winter, F. 2002. Lucas’ Anleitung zum Obstbau, 32nd ed. Eugen Ulmer, Stuttgart, Germany.
'Lucas’ Anleitung zum Obstbau, 32nd ed', ().
Wolbert-Haverkamp, M. and O. Musshoff. 2014. Are short rotation coppices an economically interesting form of land use? A real options analysis. Land Use Policy 38: 163-174.
'Are short rotation coppices an economically interesting form of land use? A real options analysis ' () 38 Land Use Policy : 163 -174.
Zentrale Markt- und Preisinformationen (ZMP). 1998. ZMP-Marktstatistik. Obst 1998. Absatzmengen und Verkaufserlöse der deutschen Erzeugermärkte. Zentrale Markt- und Preisberichtstelle für Erzeugnisse der Land-, Forst- und Ernährungswirtschaft GmbH, Bonn, Germany.
Zentrale Markt- und Preisinformationen (ZMP). 2002. ZMP-Marktstatistik. Obst 2002. Absatzmengen und Verkaufserlöse der deutschen Erzeugermärkte. Zentrale Markt- und Preisberichtstelle für Erzeugnisse der Land-, Forst- und Ernährungswirtschaft GmbH, Bonn, Germany.
Zentrale Markt- und Preisinformationen (ZMP). 2006. ZMP-Marktstatistik. Obst 2006. Absatzmengen und Verkaufserlöse der deutschen Erzeugermärkte. Zentrale Markt- und Preisberichtstelle für Erzeugnisse der Land-, Forst- und Ernährungswirtschaft GmbH, Bonn, Germany.
All Time | Past 365 days | Past 30 Days | |
---|---|---|---|
Abstract Views | 0 | 0 | 0 |
Full Text Views | 81 | 44 | 6 |
PDF Views & Downloads | 85 | 43 | 5 |
Commercial apple production is exposed to various sources of risks. This paper presents a normative utility-efficient programming (UEP) approach, calculating optimal farm plans for apple growers in two different regions of Germany. It takes weather-related quality and yield risks, as well as price risks into account. It is based on risk attitude and risk perception collected from a sample of 134 apple growers. After combining subjective estimates of the apple growers with relevant historical data, input data for the UEP-model were derived from Monte-Carlo simulations. The UEP-model determines optimal portfolios, consisting of combinations of apple varieties and risk management instruments. The results indicate that the degrees of risk aversion affect optimum farming strategies only to a minor extent. They also provide evidence that farmers would benefit from a combined frost-hail insurance, whereas the absence of frost irrigation systems may cause high yield-losses in the northern part of Germany.
All Time | Past 365 days | Past 30 Days | |
---|---|---|---|
Abstract Views | 0 | 0 | 0 |
Full Text Views | 81 | 44 | 6 |
PDF Views & Downloads | 85 | 43 | 5 |