Role and nature of risk in alternative cropping patterns in Claveria, Northern Mindanao, Philippines
1993
Abedullah
The simple cost-benefit analysis showed that the intensive cropping pattern corn-corn required the highest cash input cost followed by the corn-fallow and rice-fallow patterns. The profitability of the three cropping patterns followed the same ranking. When risk was included in the analysis, by estimating the expected utility of profit of the three patterns, the corn-corn still gave the highest expected utility of profit. The ranking, however, changed between corn-fallow and rice-fallow. The expected utility of profit of rice-fallow was higher than that for corn-fallow at the risk averse parameter value of 0.4 or higher. The high variability and resulting relatively low expected utility of profit from the dry season corn combined with the positive association between the wet and dry season corn restricted the crop intensification only on those farms who used higher cash inputs in the wet season corn. The decomposition of the variability showed that weather explained 62%, 93%, 65%, and 57% of the total variability in profit of wet season corn of corn-corn, dry season corn of corn-corn, wet season corn of corn-fallow, and wet season rice of rice-fallow, respectively. The technology effect explained about one fourth of the total variability in profits in the wet season crops while it explained only 5% of the variability in profit of the dry season corn. The prices effect was insignificant, except in rice where it was 11%. The joint effect of prices and technology was 38%, 35%, 7%, and 43% in wet season corn of corn-corn, dry season corn of corn-corn, wet season corn of corn-fallow, and rice of rice-fallow, respectively
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