PR - A Stochastic Analysis Of Tractor Overturn Costs On Catfish Farms (p68-73)

An area of health and safety risk in agriculture that can be especially dangerous is aquaculture farming. One of the main sources of injuries on aquaculture farms is tractor overturns which often results in crushing injuries. There is likely a higher probability of tractor overturns on an aquaculture farm than a traditional row crop farm due to the type of conditions that prevail on aquaculture farms. An aquaculture farm requires tractor movement near pond levees and water and these levees themselves are often quite steep. Many of the activities on an aquaculture farm such as mowing, feeding, and pond maintenance require a tractor to be operated near a pond levee. Rollover protection systems (ROPS) on tractors can help to minimize injuries caused by tractor rollovers. ROPS systems do not lessen the probability of rollover but ROPS systems do help to lower the expected injury cost and the severity of a rollover. Despite the benefits of ROPS, not every tractor is so equipped. Some earlier work indicated that the cost to retrofit these older tractors to ROPS might outweigh the expected benefits. This paper uses stochastic (i.e., randomly determined) analysis to determine if risk averse farmers are more likely to retrofit tractors with ROPS. A distribution function of injury costs should a rollover occur is developed for both ROPS and non-ROPS tractors. Risk aversion is modelled by assuming a negative exponential utility function for the farmer. A simulation is run where first a draw from a binomial distribution is taken to determine if a rollover occurs during a given hour of tractor operation. If a rollover does occur then a draw from the injury cost distribution is taken. For each point, the utility is calculated. At the simulation end, the average utility is converted back to a certainty equivalent. Results indicate that many risk averse producers will be willing to retrofit older tractors with ROPS. However, producers who are risk neutral probably will not retrofit. These results might explain why not all tractors have been retrofitted despite the long-term availability of retrofit kits.