A model for determining efficient portfolio cropping plans in organic farming

J.E. Trinidad Segovia, S. Cruz Rambaud, C. B. García García

Abstract


This paper proposes a model that helps organic growers choose crops that better adapt to their risk profile and expectations of profit. One of the main advantages of the model is its treatment of uncertainty in this market, in which historical information regarding prices and production is unavailable. The economic approach of this work is inspired in the classic theory of portfolio selection, which assumes that profitabilities follow a beta distribution. Finally, an example of the models use is reported, providing a viability analysis of these cultivation systems from a new point of view.

Keywords


Spain; Farms; Alternative agriculture; Planning; Risk; Profitability; Operations research; Mathematical models

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DOI: 10.5424/sjar/2005032-136