An economic-risk analysis of alternative rotations by stochastic simulation in Fars province

ABSTRACT - Cultivation of legumes in crop rotations results in atmosphere nitrogen fixation. After harvesting, part of this external nitrogen remains in soil and is used by subsequent crops. This implies that producers would gain from lowering the amount of nitrogen fertilizer in their fields. In this study, stochastic simulation is used to generate probability distributions of net present value for alternative rotations by Simetar software. Moreover, the alternative rotations were ranked applying stochastic dominance with respect to function (SDRF) and stochastic efficiency with respect to function (SERF). The results of both procedures showed that cereals-oilseed with onion and legume rotation is most preferred for risk-neutral decision makers and cereals–oilseed with legumes rotation is most preferred for risk-averse decision makers. Therefore, including a legumes crop in the rotation can reduce nitrogen required by a subsequent crop and so increase the net present income associated with that rotation.

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Keywords: ، Stochastic budgeting ، Stochastic dominance ، Stochastic efficiency ، Stochastic simulation