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ACIAR Project: Bridging the gaps between SCFs and decision makers in agriculture Assessing the Potential Economic Value of Seasonal Climate Forecasts for

Dec 27, 2015

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  • Slide 1
  • ACIAR Project: Bridging the gaps between SCFs and decision makers in agriculture Assessing the Potential Economic Value of Seasonal Climate Forecasts for Corn-based Farming Systems in the Philippines Canesio Predo 1, Peter Hayman 2, Jason Crean 2, John Mullen 2, Kevin Parton 2,Celia Reyes 3, Eva Monte 1,and Ian Mina 3 1/ LSU team; 2/ Australian team; 2/ PIDS team Malaybalay, Bukidnon Dec 1, 2005
  • Slide 2
  • Location of Farm Level Case Study Areas Leyte Cebu Bukidnon ACIAR Project: Bridging the gaps between SCFs and decision makers in agriculture Isabela
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  • ACIAR Project: Bridging the gaps between SCFs and decision makers The Philippine Climate Classification (Modified Coronas) Type III Climate Type IV Climate Rainfall more or less evenly distributed throughout the year. Type III Climate Seasons not very pronounced; relatively dry from Dec to Apr & wet during the rest of the year. Avg annual rainfall: l,777 mm 2,556.3mm Seasons not very pronounced; relatively dry from Dec to Apr & wet during the rest of the year.
  • Slide 4
  • ACIAR Project: Bridging the gaps between SCFs and decision makers Background Information Importance and Uses of Corn In the Phil. corn is most important crop next to rice Highly valued as human food, animal feed, and raw materials for industry 1.7 million corn growers covering 2.7 M ha (1991) 41% of grower in Mindanao (53% of the area) 27% in Visayas (18% of the area) P27 billion corn industry employs about 30% of farmers 20% of popn depends on corn as staple food, especially in Visayas, Cagayan Valley and Mindanao 27% of corn production used as staple food (white corn); 70% as feed (yellow corn) Corn also used in the manufacture of starch, gluten and alcohol
  • Slide 5
  • ACIAR Project: Bridging the gaps between SCFs and decision makers Impacts of Climate Variability Agriculture sector (e.g., corn) Occurrence of El Nio-induced drought (1997/98) greatly reduced corn yield and production (PCARRD 2000) Implications of Climate Variability Corn production always remains at risk to climate variability associated with ENSO events Corn farming is a risky investment decision
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  • ACIAR Project: Bridging the gaps between SCFs and decision makers Impacts of Climate Variability Corn productivity constraints associated with climatic extremes flooding during wet season cropping, especially for low lying areas drought during dry season cropping drought at any stage of crop development affects production, but maximum damage when it occurs around flowering stage replanting if drought occurs at planting stage mitigation is irrigation only at flowing stage Skillful seasonal climate forecasts information important to corn farmers production decision
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  • ACIAR Project: Bridging the gaps between SCFs and decision makers Application of SCF to Cope Climate Variability Crop choice Timing of cropping periods Levels of input use
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  • ACIAR Project: Bridging the gaps between SCFs and decision makers Objectives General: To estimate the potential economic value of seasonal climate forecasts (SCF) for the corn-based farming systems in the Philippines. Specific: To present a brief description of dominant cropping patterns and corn production practices in the study areas; To review and present a valuation framework for estimating the economic benefits of SCFs information under various assumptions of risks and uncertainty; To quantity the potential economic value of SCF to corn farmers in the Philippines; and To conduct policy analysis and draw policy implications on the usefulness of SCF to corn farmers and determine when and where it can be best ignored.
  • Slide 9
  • ACIAR Project: Bridging the gaps between SCFs and decision makers in agriculture Farm Level Case Study Areas Mahaplag and Matalom, Leyte (Visayas) Argao, Cebu (Visayas) Malaybalay/Manolo Fortich/Lantapan, Bukidnon (Mindanao) Isabela province (Luzon)
  • Slide 10
  • ACIAR Project: Bridging the gaps between SCFs and decision makers
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  • Table 1. Volume of corn production (000 MT) & % share of top 10 corn-producing provinces in the Philippines, 2004 Source: BAS
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  • ACIAR Project: Bridging the gaps between SCFs and decision makers ENSO Intensities: Weak La NiaWeak El Nio Moderate La NiaModerate El Nio Strong La NiaStrong El Nio Sources: Volume of corn production - BAS ENSO years - PAGASA Figure 1. Volume of Corn Production (in 000 MT), by type Bukidnon, 1970-2000
  • Slide 13
  • ACIAR Project: Bridging the gaps between SCFs and decision makers Climate and Cropping Pattern Climate: Type III classification: seasons not very pronounced, dry from Nov-April and wet during rest of the year Average annual rainfall: 2,556.3 mm Average temp = 23.9 o C
  • Slide 14
  • ACIAR Project: Bridging the gaps between SCFs and decision makers Climate and Cropping Pattern Farming Systems/Cropping Pattern Farming is the dominant activity Major crops: corn, sugarcane, pineapple, rice and bananas For most parts of Bukidnon: corn follows a twice-a-year planting pattern; in elevated areas sometimes 3x a year 1 st cropping: Feb/Mar and harvested in Jun/Jul 2 nd cropping: Jul/Aug and harvested in Nov/Dec 3 rd cropping in upland sloping, rolling to hilly envt: Nov/Dec and harvested in Feb/Mar/Apr (corn or legumes) Cropping pattern by elevation Lower elevationcorncorn Higher elevationcorncorn vegetablescorn 1 st crop 2 nd crop
  • Slide 15
  • ACIAR Project: Bridging the gaps between SCFs and decision makers Climate and Cropping Pattern Yield: Local variety (1.0 2.5 t/ha) OPVs (2.0 4.0 t/ha) Hybrid (3.0 6.0 t/ha)
  • Slide 16
  • ACIAR Project: Bridging the gaps between SCFs and decision makers Cropping Choice Decision Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan 1 st crop 2 nd crop Crop choice Corn Vegetable Fallow Corn Vegetable Fallow Crop choice Representation of the farmers cropping decision problem Corn Vegetable Fallow Crop choice Corn Vegetable Fallow Crop choice
  • Slide 17
  • ACIAR Project: Bridging the gaps between SCFs and decision makers Corn Native corn Hybrid corn (2) OPV (improved) (3) Sowing date (3) N fert rate (2) Cropping Choice Decision
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  • Slide 19
  • *Biophysical secondary data *Experts judgment *Observed farmers practice Seasonal Climate Forecasts *Amt of rainfall *Timing of rainfall events *Freq of rainfall Corn-based Farming Systems (DSSAT v4) Calibration *Material Input reqmts *Labor reqmts *Input/Output prices Input parameters CROP YIELD and CROP YIELD DISTN EXPECTED PAYOFFS/RETURNS (NPV) Cost-loss ratio analysis Stochastic dominance (FSD, SSD, TSD) Conceptual SCF Valuation Framework
  • Slide 20
  • ACIAR Project: Bridging the gaps between SCFs and decision makers Economic Valuation Framework Opportunity Cost Approach (With and Without Seasonal Climate Forecast Information) Outcomes: rainfall, yield and gross margin or payoff (NPV terms) VCF = NR (wc) - NR (woc) where: NR (wc) = net returns with climate forecast NR (woc) = net returns without climate forecast Methods of Assessment Cost-loss ratio model Stochastic dominance analysis
  • Slide 21
  • ACIAR Project: Bridging the gaps between SCFs and decision makers Data Sources Secondary data (published and unpublished) Experts judgement Personal communication Observed farmers practice (focus group) DSSAT simulation output
  • Slide 22
  • ACIAR Project: Bridging the gaps between SCFs and decision makers Preliminary Results Relationship of Seasonal Climate Forecasts and Rainfall (using Rainman)
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  • Slide 26
  • Chance of Rainfall in Malaybalay Source: Rainman Analysis of historical data (1919 to 2004) using SST Phase forecast in Sep for Rainfall period: Oct to Dec (leadtime of 0 months). The SST phases/rainfall relationship for this season is statistically significant Because KW test is above 0.9 and Skill Score (13.3) is above 7.6 (p=0.97).
  • Slide 27
  • ACIAR Project: Bridging the gaps between SCFs and decision makers Thank you for your attention!!!
  • Slide 28
  • The Leyte State University URL: http://www.lsu-visca.edu.ph http://www.lsu-visca.edu.ph
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