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Author(s): Michał Soliwoda, Joanna Pawłowska-Tyszko, Grzegorz Konat

Title: Weather Indices in the Profitability Calculations of Selected Crops at the Sectoral Level on the Example of Fodder Maize

Source: International Scientific Days 2018 :: Towards Productive, Sustainable and Resilient Global Agriculture and Food Systems :: Proceedings

ISBN: 978-80-7598-180-6


Publisher: Wolters Kluwer ČR, Prague

PY, pages: 2018, 1426-1439

Published on-line: 2018-11-09

Language: eng

Abstract: The objective of this paper is to use weather indices to estimate the cost of production risk in the profitability calculations of selected crops on the example of fodder maize. The source of data are GUS secondary data (concerning, among others, yields) and System of Collection of Data on Agricultural Products - Agrocosts (Agrokoszty) in the Agricultural Accountancy Department of IAFE-NRI. The indicator analysis method was used, taking into account measures and indicators used in the economics of agriculture. The methodical approach to estimating the cost of production risk that is proposed by authors is based on the use of so-called weather indexes (WI). Methodology for estimating the cost of production risk for fodder crops is based on the category of yield lost due to unfavourable weather conditions, as the difference between yields potentially achievable in optimal weather conditions and real yield. The cost of production risk corresponds to the monetary effects of the materialization of unfavourable weather phenomena. The weather index as a synthetic measure can take positive values. Green maize is the alternative (competitive feed) for clover and alfalfa forage. Taking into account the cost of risk in total production costs reduced the profitability index (including the cost of risk) of fodder maize only in 2014- 2015. The production of fodder maize was profitable in 2009-2013, which resulted from the favourable price of fodder barley on the market. In the calculation of costs, the cost of risk cannot be omitted because its omission leads to underestimation of economic and financial results, which in turn may lead to incorrect decisions at the micro level regarding, for example, agricultural crop portfolio, investment activities, and macro level too high support in the form of payments area (mainly, decoupled payment as remuneration for lost income.

Keywords: production risk, , profitability calculations, risk management, subsidies, weather index

JEL Classification: Q18, Q14

Rights:Open Access :: Creative Commons BY-NC-SA 4.0 International Licence
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Toto dielo je publikované pod/This work is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International Licence.