Publication Type

Journal Article

Version

publishedVersion

Publication Date

3-2019

Abstract

This chapter develops a theoretical basis for understanding the trade-offs facing a farmer for allocating his farmland among several crops over multiple growing seasons. Specifically, we focus on the farmland allocation among two cash crops (corn and soybeans) and letting the farmland lay fallow to rejuvenate the soil and increase the revenue for the crop grown on this farmland in the subsequent seasons. In each growing period, the farmer chooses the allocation in the presence of revenue uncertainty for each cash crop, and crop rotation benefits across periods, where revenue is stochastically larger and farming cost is lower when a cash crop is grown on a rotated farmland (where the same crop was not grown in the previous period). We solve for the optimal dynamic allocation policy.

Keywords

Cash crops, Optimal dynamics, Production management, Risk management, Supply chain finance

Discipline

Agribusiness | Operations and Supply Chain Management

Research Areas

Operations Management

Publication

Foundations and Trends in Technology, Information and Operations Management

Volume

12

Issue

2-3

First Page

280

Last Page

297

ISSN

1571-9545

Identifier

10.1561/0200000083

Publisher

Now Publishers

Embargo Period

3-31-2019

Copyright Owner and License

Authors

Additional URL

https://doi.org/10.1561/0200000083

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