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Climate change impacts on investment in crop sowing machinery

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  • Kingwell, Ross S.
  • Farré, Imma

Abstract

A model of investment in crop sowing machinery is applied to wheat production under current and projected climatic conditions at several locations in south-western Australia. The model includes yield responses to time of sowing at each location given current and projected climatic conditions. These yield relationships are based on wheat growth simulation modelling that in turn draws on data from a down-scaled global circulation model. Wheat price distributions and cost of production data at each location, in combination with the time of sowing yield relationships are used to determine a farmer’s optimal investment in crop sowing work rate under each climate regime. The key finding is that the impacts of climate change on profit distributions are often marked, yet mostly modest changes in investment in work rate form part of the profit-maximising response to climate change. The investment response at high versus low rainfall locations mostly involves increases and decreases in work rates, respectively. However, changes to investment in work rate within a broadly similar rainfall region are not always uniform. The impacts of climate change on investments in work rate at a particular location are shown to require knowledge of several factors, especially how climate change alters the pattern of yield response to the time of sowing at that location.

Suggested Citation

  • Kingwell, Ross S. & Farré, Imma, 2009. "Climate change impacts on investment in crop sowing machinery," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 53(2), pages 1-20.
    • Handle: RePEc:ags:aareaj:161918
    DOI: 10.22004/ag.econ.161918
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    References listed on IDEAS

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    1. Kingwell, Ross S., 1995. "Effects of Tactical Responses and Risk Aversion on Farm Wheat Supply," Review of Marketing and Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 62(01), pages 1-14, April.
    2. Ziv Bar‐Shira, 1991. "An Approach To The Econometric Estimation Of Attitudes To Risk In Agriculture: Comment," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 35(3), pages 315-318, December.
    3. Kingwell, Ross S. & Pannell, David J. & Robinson, Stephen D., 1993. "Tactical responses to seasonal conditions in whole-farm planning in Western Australia," Agricultural Economics, Blackwell, vol. 8(3), pages 211-226, March.
    4. Bond, Gary E. & Wonder, Bernard, 1980. "Risk Attitudes Amongst Australian Farmers," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 24(1), pages 1-19, April.
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    6. -, 2009. "The economics of climate change," Sede Subregional de la CEPAL para el Caribe (Estudios e Investigaciones) 38679, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    7. Kingwell, Ross S., 2006. "Climate change in Australia: agricultural impacts and adaptation," Australasian Agribusiness Review, University of Melbourne, Department of Agriculture and Food Systems, vol. 14.
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    1. Lawes, R.A. & Kingwell, R.S., 2012. "A longitudinal examination of business performance indicators for drought-affected farms," Agricultural Systems, Elsevier, vol. 106(1), pages 94-101.
    2. Kingwell, Ross & Thomas, Quenten & Feldman, David & Farre, Imma & Plunkett, Brad, 2018. "Traditional farm expansion versus joint venture remote partnerships," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 62(1), January.
    3. Kingwell, Ross S. & Xayavong, Vilaphonh, 2017. "How drought affects the financial characteristics of Australian farm businesses," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 61(3), July.
    4. Steele C. West & Amin W. Mugera & Ross S. Kingwell, 2021. "Drivers of farm business capital structure and its speed of adjustment: evidence from Western Australia’s Wheatbelt," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 65(2), pages 391-412, April.

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    Keywords

    Agricultural Finance; Farm Management;

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