Castro, L.M.; Calvas, B. & Knoke, T. (2015): <b>Ecuadorian Banana Farms Should Consider Organic Banana with Low Price Risks in Their Land-Use Portfolios</b>. <i>PlOS one</i> <b>10</b>(3), e0120384.
Resource Description
Title:
Ecuadorian Banana Farms Should Consider Organic Banana with Low Price Risks in Their Land-Use Portfolios
FOR816dw ID:
1334
Publication Date:
2015-03-01
License and Usage Rights:
PAK 823-825 data user agreement. (www.tropicalmountainforest.org/dataagreementp3.do)
Resource Owner(s):
Individual:
Luz Maria Castro
Contact:
email:
luces_c <at> yahoo.es
Ecuador
Individual:
Baltazar Calvas
Contact:
email:
bcalvas <at> utpl.edu.ec
Hans-Carl-von- Carlowitz-Platz 2
Fachgebiet für Waldinventur und nachhaltige Nutzung
85354, Freising
85354 Freising
Germany
Individual:
Thomas Knoke
Contact:
email:
knoke <at> forst.tu-muenchen.de
Center of Life and Food Science Weihenstephan
Institute of Forest Management
Technische Universität München
Hans-Carl-von-Carlowitz-Platz 2
85354 Freising
Germany
Abstract:
Organic farming is a more environmentally friendly form of land use than conventional agriculture. However, recent studies point out production tradeoffs that often prevent the adoption of such practices by farmers. Our study shows with the example of organic banana production in Ecuador that economic tradeoffs depend much on the approach of the analysis. We test, if organic banana should be included in economic land-use portfolios, which indicate how much of the land is provided for which type of land-use. We use time series data for productivity and prices over 30 years to compute the economic return (as annualized net present value) and its volatility (with standard deviation as risk measure) for eight crops to derive land-use portfolios for different levels of risk, which maximize economic return. We find that organic banana is included in land-use portfolios for almost every level of accepted risk with proportions from 1% to maximally 32%, even if the same high uncertainty as for conventional banana is simulated for organic banana. A more realistic, lower simulated price risk increased the proportion of organic banana substantially to up to 57% and increased annual economic returns by up to US$ 187 per ha. Under an assumed integration of both markets, for organic and conventional banana, simulated by an increased coefficient of correlation of economic return from organic and conventional banana (? up to +0.7), organic banana holds significant portions in the land-use portfolios tested only, if a low price risk of organic banana is considered. We conclude that uncertainty is a key issue for the adoption of organic banana. As historic data support a low price risk for organic banana compared to conventional banana, Ecuadorian farmers should consider organic banana as an advantageous land-use option in their land-use portfolios.
Keywords:
| land diversification | agriculture | land use modeling |
Literature type specific fields:
ARTICLE
Journal:
PlOS one
Volume:
10
Issue:
3
Page Range:
e0120384
Metadata Provider:
Individual:
Carola Paul
Contact:
email:
carola.paul <at> tum.de
Center of Life and Food Sciences Weihenstephan
Institute of Forest Management
Technische Universität München
Hans-Carl-von-Carlowitz-Platz 2
85354 Freising
Germany
