A quadratic application in farm planning under uncertainty

Abstract

Farming in Bangladesh is confronted with various types of uncertainties, which contribute to farmers’ income volatility over the years. As a result, cereal, mainly rice, which is a less riskier crop remained dominantly planted in the current farm plan. But the return generated from rice cultivation has not been able to improve the livelihood of the poor, as rice profitability is low compared to some profitable but risky crops like jute and vegetables. To investigate the behavioral pattern of the farmers towards risk, Dhaka division, largely known as central region of Bangladesh, is selected. The prevailing farm plan of Dhaka division is compared with the efficient one at the current level of expected return in order to check whether the current farm plan is risky or otherwise. Quadratic and MOTAD as well as linear programming techniques have been employed for the analysis. The result of the study reveals that the prevailing farm plan in Dhaka division is risky compared to the efficient plan. Since the current return level is low, the study has recommended that more jute and vegetables should be planted to achieve higher remuneration.

Sources of Risk and Risk Management Strategies: The Case of Smallholder Farmers in a Developing Economy

“…These affect the fluctuation in farm profitability from season to season and from one year to another. (3,4) The sources of risk and level of its severity can vary according to the farming systems, geographic location, weather conditions, supporting government policies and farm types. Risk is a major concern in developing countries where farmers have imperfect information to forecast things such as farm input prices, product prices, and weather conditions, that might impact the farms in the future.…”

The Drivers and Impacts of Selling Soil for Brick Making in Bangladesh

“…For example, rice remained planted in both the areas, but cultivation of other crops like jute, vegetables and lentil decreased. In Bangladesh, return generated from rice cultivation did not support improving livelihood of the farmers due to the low profitability of rice compared to other profitable crops such as jute and vegetables previously reported (Hossain et al 2002 ). In addition, movement of soil particles during transportation of raw materials for brick production also causes serious problems to human health (Pimentel et al 2007 ).…”

Farm/crop portfolio simulations under variable risk: a case study from Italy

“…In this section, we examine the stochastic production frontier obtained with the efficient programming method (Hanoch and Levy 1970;Hardaker et al 1991;Ghodake and Hardaker 1981;Meyer 1977;Lee et al 1985;Kaiser and Apland 1989;Hossain et al 2002;Lien and Hardaker 2001;Park et al 2004). The efficient set of portfolio solutions is obtained with a formulation of appropriate objective function to modulate risk, and the MOTAD method is used to linearize the function to obtain an efficient set of portfolio plans.…”