Economic assessment of using seasonal climate forecast in corn production decisions of farmers in Bohol province [Philippines]

This study was conducted in Panglao and Dauis, Bohol to assess the use and economic value of seasonal climate forecast (SCF) among corn farmers in Bohol. A decision tree analysis was applied to assess the economic value of SCF for corn cropping system. The RAINMAN International 4.1 (ACIAR version) was used to derive the probabilities of good, average and poor season outcomes based on the average Southern Oscillation Index (SOI) forecast system. The stochastic gross margin was simulated using SIMETAR to generate the cumulative distribution function of expected value of cropping choice for both with and without forecast scenarios. The value of SCF was calculated by subtracting the expected net returns of cropping choice without forecast from the expected net returns with forecast. Survey results showed that most of the farmers considered climate in their farm planning and decision making. However, only about 40 percent of the total respondents used SCF in corn production decisions. Seasonal climate forecast analysis for Tagbilaran synoptic station indicated a positive (SOI + 5) forecast to be significant which suggests that there is a 62 percent of getting a higher rainfall amount greater than 244 mm and the chance of having median amount of rainfall increased from 50 to 71 percent. The decision tree analysis results indicated that without SCF, the farmer would be better off to plant sweet potato (PhP2,433) since a higher net returns could be realized than planting corn (PhP1,984) or follow the land (PhP1,000). With positive forecast, the optimal farmers' decision is to plant corn since the chance of getting greater net returns is higher. Summary of simulated results showed that the stochastic net returns of cropping choice without SCF ranged from PhP2,084 to P2,838/ha season with a mean of PhP2,439/ha/season. With SCF, the stochastic net returns ranged from PhP2,119 to PhP2,934/ha/season with a mean of PhP2,491/ha/season. In subsistence corn farming with perfect information, the economic value of SCF for corn cropping system was calculated at about PhP51.22/ha/season. This amount could be considered minimal for individual subsistence smallholder corn farmers to change cropping decision. Since SCF information is not always perfect, the value of SCF is expected to be large especially on market-oriented corn farming.