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European Association of Agricultural Economists >
2008 International Congress, August 26-29, 2008, Ghent, Belgium >
Please use this identifier to cite or link to this item:
http://purl.umn.edu/43972
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| Title: | Valuing the risk associated with willow and miscanthus relative to conventional agricultural systems |
| Authors: | Clancy, Daragh
Breen, James P.
Butler, Anne Marie
Thorne, Fiona S.
Wallace, Michael T. |
| Keywords: | Biomass
SERF
Risk Premium |
| Issue Date: | 2008 |
| Abstract: | The agronomic characteristics of willow
and miscanthus make these crops highly susceptible to
risk. This is particularly true in a country such as
Ireland which has limited experience in the production
of these crops. Issues such as soil and climate suitability
have as yet to be resolved. The lengthy production
lifespan of energy crops only serve to heighten the level
of risk that affects key variables. The uncertainty
surrounding the risk variables involved in producing
willow and miscanthus, such as the annual yield level
and the energy price, make it difficult to accurately
calculate the returns of such a project. The returns from
willow and miscanthus are compared with those of
conventional agricultural enterprises using Stochastic
Efficiency with Respect to a Function (SERF). A risk
premium is calculated which farmers would need to be
compensated with in order for them to be indifferent
between their current enterprise and switching to
biomass crop production. With the exception of spring
barley, a risk premium is required if farmers are to be
indifferent between their current enterprise and willow
or miscanthus. The value of the risk premium required
to entice farmers to switch to miscanthus production is
significantly less than that required for willow. This
suggests that a greater level of risk is associated with
willow than with miscanthus. |
| URI: | http://purl.umn.edu/43972 |
| Institution/Association: | European Association of Agricultural Economists>2008 International Congress, August 26-29, 2008, Ghent, Belgium |
| Total Pages: | 5 |
| Collections: | 2008 International Congress, August 26-29, 2008, Ghent, Belgium
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