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Farm-level impacts of prolonged drought: is a multiyear event more than the sum of its parts?

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  • Dannele E. Peck
  • Richard M. Adams

Abstract

A multiyear discrete stochastic programming model with uncertain water supplies and inter-year crop dynamics is developed to determine: (i) whether a multiyear drought's impact can be more than the sum of its parts, and (ii) whether optimal response to 1 year of drought can increase a producer's vulnerability in subsequent years of drought. A farm system that has inter-year crop dynamics, but lacks inter-annual water storage capabilities, is used as a case study to demonstrate that dynamics unrelated to large reservoirs or groundwater can necessitate a multiyear model to estimate drought's impact. Results demonstrate the importance of analysing individual years of drought in the context of previous and future years of drought. Copyright 2010 The Authors. Journal compilation 2010 Australian Agricultural and Resource Economics Society Inc. and Blackwell Publishing Asia Pty Ltd.

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  • Dannele E. Peck & Richard M. Adams, 2010. "Farm-level impacts of prolonged drought: is a multiyear event more than the sum of its parts?," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 54(1), pages 43-60, January.
    • Handle: RePEc:bla:ajarec:v:54:y:2010:i:1:p:43-60
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    File URL: http://hdl.handle.net/10.1111/j.1467-8489.2009.00478.x
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    1. Peck, Dannele E. & Adams, Richard M., 2011. "A reply to ‘Multiyear versus single-year drought: a comment on Peck and Adams’," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 55(3), pages 1-4, September.
    2. Farnaz Pourzand & Ilan Noy & Yigit Saglam, 2019. "Droughts and farms' financial performance in New Zealand: a micro farm-level study," CESifo Working Paper Series 7633, CESifo.
    3. Kang, Hyunwoo & Sridhar, Venkataramana & Mills, Bradford F. & Hession, W. Cully & Ogejo, Jactone A., 2019. "Economy-wide climate change impacts on green water droughts based on the hydrologic simulations," Agricultural Systems, Elsevier, vol. 171(C), pages 76-88.
    4. Ancev, Tihomir, 2011. "Multiyear versus single-year drought: a comment on Peck and Adams," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 55(3), pages 1-3, September.
    5. Fan, Yubing & Massey, Raymond E. & Park, Seong C., 2017. "Multicrop Production Decisions and Economic Irrigation Water Use Efficiency: Effects of Water Costs, Pressure Irrigation Adoption and Climate Determinants," 2017 Annual Meeting, July 30-August 1, Chicago, Illinois 258561, Agricultural and Applied Economics Association.
    6. Lan Anh Tong & Mehmet Ali Ulubaşoğlu & Cahit Guven, 2022. "Growing more Rice with less water: the System of Rice Intensification and water productivity in Vietnam," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 66(3), pages 581-611, July.
    7. Bastian, Christopher T. & Gray, Stephen T. & Peck, Dannele E. & Ritten, John P. & Hansen, Kristiana M. & Krall, James M. & Paisley, Steven I., 2011. "The Nature of Climate Science for the Rocky Mountain West: Implications for Economists Trying to Help Agriculture Adapt," Western Economics Forum, Western Agricultural Economics Association, vol. 10(2), pages 1-10.
    8. Birthal, Pratap S. & Negi, Digvijay S. & Khan, Md. Tajuddin & Agarwal, Shaily, 2015. "Is Indian agriculture becoming resilient to droughts? Evidence from rice production systems," Food Policy, Elsevier, vol. 56(C), pages 1-12.
    9. Guven, Cahit & Tong, Lan & Ulubasoglu, Mehmet, 2021. "Growing More Rice with Less Water: The System of Rice Intensification and Rice Productivity in Vietnam," MPRA Paper 108768, University Library of Munich, Germany.
    10. Connor, Jeffery D. & Kandulu, John M. & Bark, Rosalind H., 2014. "Irrigation revenue loss in Murray–Darling Basin drought: An econometric assessment," Agricultural Water Management, Elsevier, vol. 145(C), pages 163-170.
    11. Gil, Marina & Garrido, Alberto & Gómez-Ramos, Almudena, 2011. "Economic analysis of drought risk: An application for irrigated agriculture in Spain," Agricultural Water Management, Elsevier, vol. 98(5), pages 823-833, March.
    12. Pourzand, Farnaz & Noy, Ilan & Sağlam, Yiğit, 2020. "Droughts and farms’ financial performance: a farm‐level study in New Zealand," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 64(3), July.
    13. Hutchings, Timothy R. & Nordblom, Thomas L., 2011. "A financial analysis of the effect of the mix of crop and sheep enterprises on the risk profile of dryland farms in south-eastern Australia," AFBM Journal, Australasian Farm Business Management Network, vol. 8(1), pages 1-23, October.
    14. Levente Timar & Eyal Apatov, 2020. "A Growing Problem: Exploring Livestock Farm Resilience to Droughts in Unit Record Data," Working Papers 20_14, Motu Economic and Public Policy Research.
    15. Dimitris Tigkas & Harris Vangelis & George Tsakiris, 2020. "Implementing Crop Evapotranspiration in RDI for Farm-Level Drought Evaluation and Adaptation under Climate Change Conditions," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 34(14), pages 4329-4343, November.
    16. Pourzand, Farnaz & Noy, Ilan & Sağlam, Yiğit, 2019. "Droughts and farms’ financial performance in New Zealand: A micro farm level study," Working Paper Series 8159, Victoria University of Wellington, School of Economics and Finance.

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