Farm level dynamic economic modelling of crop rotation with adaptation practices

Heikki Sakari Lehtonen, Xing Liu, Tuomo Purola, Reimund Rötter, Taru Palosuo


Agriculture is facing increasing challenges under volatile commodity markets, on-going climate change with more frequent extreme weather events and tightened environmental constraints. Crop rotation is considered essential and may even gain more importance for sustainable farming in the context of climate change challenges while monocropping is expected to become increasingly problematic. This is, among others, because of increasing plant protection challenges due to warmer climate which is expected to result in severe droughts, heavy rainfall and waterlogging in northern latitudes more frequently. Such changes require improved soil structure and water retention, also aided by crop rotations, to avoid yield losses. Our objective is to build and apply a dynamic optimization model of farm level crop rotation on many field parcels over 30-40 years. The model takes into account various adaptation management methods such as fungicide treatment, soil improvements such as liming, and nitrogen fertilization, simultaneously with dynamic crop rotation choices. However, these management options come along with costs. Using the model, outcomes of crop growth simulation modeling can be included into economic analysis. Simulated new cultivars, suited for a longer growing season, can be defined as alternatives to current cultivars, both having specific nutrient and other input requirements such as water, labor or pesticides. The model is used in evaluating the value of future cultivars and other management practices in climate and socio-economic scenarios. The first results show that expected market prices have major impacts on the management choices, the resulting yield levels, production and income over time.

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Purola, T. (2013). Taudinkestävien ja tautialttiiden ohralajikkeiden taloudellinen vertailu. Master thesis. University of Helsinki. Department of economics and management.

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