Integrated optimization of farmland cultivation and fertilizer application: Implications for farm management and food security

Motivated by the fresh produce industry, this paper studies a farmer's joint cultivation and fertilizer (a representative farm input) application decisions facing uncertainties in crop's open market price, harvesting cost, and farm yield, where yield is stochastically increasing in the fer...

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Main Authors: BOYABATLI, Onur, SHAO, Lusheng, ZHOU, Yangfang (Helen)
Format: text
Language:English
Published: Institutional Knowledge at Singapore Management University 2021
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Online Access:https://ink.library.smu.edu.sg/lkcsb_research/6620
https://ink.library.smu.edu.sg/context/lkcsb_research/article/7619/viewcontent/boyabatli_shao_zhou_R1_31may2023.pdf
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Institution: Singapore Management University
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spelling sg-smu-ink.lkcsb_research-76192023-06-01T03:16:49Z Integrated optimization of farmland cultivation and fertilizer application: Implications for farm management and food security BOYABATLI, Onur SHAO, Lusheng ZHOU, Yangfang (Helen) Motivated by the fresh produce industry, this paper studies a farmer's joint cultivation and fertilizer (a representative farm input) application decisions facing uncertainties in crop's open market price, harvesting cost, and farm yield, where yield is stochastically increasing in the fertilizer application rate. We develop a two-stage stochastic program that captures the trade offs facing a farmer growing a commodity crop in a single season to maximize the expected profit. We then use the model to evaluate the expected optimal harvest volume (a measure of food security). Our analytical analysis is complemented with numerical experiments calibrated to data. We characterize how the farmer's optimal decisions, profitability as well as the expected optimal harvest volume are affected by fertilizer and cultivation costs and farm yield uncertainty. We find that these effects can be counterintuitive and significantly different from those when only cultivation decision is optimized (as considered in the extant literature); specifically when these eects induce the farmer to change the two decisions in opposite directions. For example, an increase in fertilizer cost may incent the farmer to cultivate more farmland. Another example is that a reduction in cultivation cost or yield variability may decrease the expected optimal harvest volume. This result is useful for policymakers as it demonstrates that commonly used policies in practice, such as distributing discount vouchers for seed procurement (which reduces the cultivation cost) or increasing the availability of disease-resistant seeds (which reduces yield variability) that have been devised for increasing crop production level may backfire. 2021-06-01T07:00:00Z text application/pdf https://ink.library.smu.edu.sg/lkcsb_research/6620 https://ink.library.smu.edu.sg/context/lkcsb_research/article/7619/viewcontent/boyabatli_shao_zhou_R1_31may2023.pdf http://creativecommons.org/licenses/by-nc-nd/4.0/ Research Collection Lee Kong Chian School Of Business eng Institutional Knowledge at Singapore Management University Farm planning agriculture integrated optimization fertilizer yield uncertainty margin uncertainty fresh produce food security Operations and Supply Chain Management
institution Singapore Management University
building SMU Libraries
continent Asia
country Singapore
Singapore
content_provider SMU Libraries
collection InK@SMU
language English
topic Farm planning
agriculture
integrated optimization
fertilizer
yield uncertainty
margin uncertainty
fresh produce
food security
Operations and Supply Chain Management
spellingShingle Farm planning
agriculture
integrated optimization
fertilizer
yield uncertainty
margin uncertainty
fresh produce
food security
Operations and Supply Chain Management
BOYABATLI, Onur
SHAO, Lusheng
ZHOU, Yangfang (Helen)
Integrated optimization of farmland cultivation and fertilizer application: Implications for farm management and food security
description Motivated by the fresh produce industry, this paper studies a farmer's joint cultivation and fertilizer (a representative farm input) application decisions facing uncertainties in crop's open market price, harvesting cost, and farm yield, where yield is stochastically increasing in the fertilizer application rate. We develop a two-stage stochastic program that captures the trade offs facing a farmer growing a commodity crop in a single season to maximize the expected profit. We then use the model to evaluate the expected optimal harvest volume (a measure of food security). Our analytical analysis is complemented with numerical experiments calibrated to data. We characterize how the farmer's optimal decisions, profitability as well as the expected optimal harvest volume are affected by fertilizer and cultivation costs and farm yield uncertainty. We find that these effects can be counterintuitive and significantly different from those when only cultivation decision is optimized (as considered in the extant literature); specifically when these eects induce the farmer to change the two decisions in opposite directions. For example, an increase in fertilizer cost may incent the farmer to cultivate more farmland. Another example is that a reduction in cultivation cost or yield variability may decrease the expected optimal harvest volume. This result is useful for policymakers as it demonstrates that commonly used policies in practice, such as distributing discount vouchers for seed procurement (which reduces the cultivation cost) or increasing the availability of disease-resistant seeds (which reduces yield variability) that have been devised for increasing crop production level may backfire.
format text
author BOYABATLI, Onur
SHAO, Lusheng
ZHOU, Yangfang (Helen)
author_facet BOYABATLI, Onur
SHAO, Lusheng
ZHOU, Yangfang (Helen)
author_sort BOYABATLI, Onur
title Integrated optimization of farmland cultivation and fertilizer application: Implications for farm management and food security
title_short Integrated optimization of farmland cultivation and fertilizer application: Implications for farm management and food security
title_full Integrated optimization of farmland cultivation and fertilizer application: Implications for farm management and food security
title_fullStr Integrated optimization of farmland cultivation and fertilizer application: Implications for farm management and food security
title_full_unstemmed Integrated optimization of farmland cultivation and fertilizer application: Implications for farm management and food security
title_sort integrated optimization of farmland cultivation and fertilizer application: implications for farm management and food security
publisher Institutional Knowledge at Singapore Management University
publishDate 2021
url https://ink.library.smu.edu.sg/lkcsb_research/6620
https://ink.library.smu.edu.sg/context/lkcsb_research/article/7619/viewcontent/boyabatli_shao_zhou_R1_31may2023.pdf
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