@article{Kingwell:173075,
      recid = {173075},
      author = {Kingwell, Ross S. and Pannell, David J. and Robinson,  Stephen D.},
      title = {Tactical responses to seasonal conditions in whole-farm  planning in Western Australia},
      journal = {Agricultural Economics: The Journal of the International  Association of Agricultural Economists},
      address = {1993-03},
      number = {968-2016-75839},
      pages = {16},
      year = {1993},
      abstract = {In dryland agricultural systems, efficient farm management  requires a degree of flexibility
according to variations in  climate from year to year. Tactical adjustments to the mix  of
farm enterprises can capitalize on good growing  conditions and minimise losses under poor
growing  conditions. In this paper, a discrete stochastic  programming model of dryland
wheat-sheep farms in Western  Australia is used to identify optimal tactical adjustments  to
climate and to calculate the value of these tactical  adjustments. The model, MUDAS,
includes nine discrete  season types with a wide range of options for tactical  adjustments in
each. In the standard model, optimal  tactical responses increase expected net cash surplus
by  approximately 22% relative to a fixed or inflexible  strategy. In most season types, changes
to the long term  farm strategy are made on less than 10% of the farm area,  although in
some seasons over 25% of the farm can require  adjustments to the enterprise selected. The
benefits of  flexibility are not evenly distributed across different  season types but occur
predominantly in the best and worst  seasons. The magnitude of benefits is affected
differently  by different commodity prices. Benefits of flexibility are  due to capitalizing on
knowledge about the greater  volatility of profits from cropping than from livestock  production.
Deterministic models and even stochastic models  which don't include activities for
tactical adjustments  miss this key feature of the system.},
      url = {http://ageconsearch.umn.edu/record/173075},
      doi = {https://doi.org/10.22004/ag.econ.173075},
}