Insights into the value of seasonal climate forecasts to agriculture

Darbyshire, Rebecca and Crean, Jason and Cashen, Michael and Anwar, Muhuddin Rajin and Broadfoot, Kim and Simpson, Marja and Cobon, David and Pudmenzky, Christa and Kouadio, Louis ORCID: https://orcid.org/0000-0001-9669-7807 and Kodur, Shreevatsa (2020) Insights into the value of seasonal climate forecasts to agriculture. Australian Journal of Agricultural and Resource Economics, 64. pp. 1034-1058. ISSN 1364-985X


Abstract

Seasonal climate forecasts (forecasts) aim to reduce climate-related productivity risk by helping farmers make decisions that minimise losses in poor years and maximise profits in good years. Most Australian forecast valuations have focused on fertiliser decisions to wheat operations, and few assessments have evaluated the benefit of incremental improvements of forecast skill. These gaps have limited our understanding of forecast value to the broader agriculture sector and the benefit of investments to improve forecast skill. To address these gaps, we consistently assessed forecast value for seven Australian case studies (southern grains, northern grains, southern beef, northern beef, lamb, cotton, and sugar). We implemented a three-stage methodology which consisted of engagement with industry practitioners; modelling production under different climatic and environmental conditions; and economic modelling to evaluate forecast value for eleven levels of forecast skill. Our results show that forecast value was often low and highly variable. Value was found to vary based on forecast attributes (forecast skill, resolution and state), industry application and prevailing conditions (environmental and market). This is the first Australian valuation study where the same methodological approach was applied across multiple industries, incremental improvements in skill were valued, and prevailing conditions were explicitly evaluated for impact on value.


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Item Type: Article (Commonwealth Reporting Category C)
Refereed: Yes
Item Status: Live Archive
Faculty/School / Institute/Centre: Current - Institute for Life Sciences and the Environment - Centre for Applied Climate Sciences (1 Aug 2018 -)
Faculty/School / Institute/Centre: Current - Institute for Life Sciences and the Environment - Centre for Applied Climate Sciences (1 Aug 2018 -)
Date Deposited: 21 Aug 2020 00:03
Last Modified: 23 Apr 2021 00:02
Uncontrolled Keywords: Australia, beef, cattle, cotton, grains, lamb, seasonal forecast, sheep, sugar
Fields of Research (2008): 14 Economics > 1402 Applied Economics > 140201 Agricultural Economics
14 Economics > 1402 Applied Economics > 140205 Environment and Resource Economics
07 Agricultural and Veterinary Sciences > 0701 Agriculture, Land and Farm Management > 070107 Farming Systems Research
Socio-Economic Objectives (2008): D Environment > 96 Environment > 9603 Climate and Climate Change > 960302 Climate Change Mitigation Strategies
D Environment > 96 Environment > 9603 Climate and Climate Change > 960303 Climate Change Models
D Environment > 96 Environment > 9603 Climate and Climate Change > 960304 Climate Variability (excl. Social Impacts)
Identification Number or DOI: https://doi.org/10.1111/1467-8489.12389
URI: http://eprints.usq.edu.au/id/eprint/39236

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