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ARS Home » Southeast Area » Booneville, Arkansas » Dale Bumpers Small Farms Research Center » Research » Publications at this Location » Publication #354851

Title: A risk-return model for rice cultivar selection with weather, soil, and tillage constraints

item SHEW, AARON - Orise Fellow
item TALLEY, LANIER - University Of Arkansas
item Owens, Phillip

Submitted to: Meeting Abstract
Publication Type: Abstract Only
Publication Acceptance Date: 3/15/2018
Publication Date: N/A
Citation: N/A

Interpretive Summary:

Technical Abstract: Rice farmers in the mid-southern United States select cultivars and crop rotations based on a number of complex factors with the overall aim of maximizing profits. Previous studies evaluate cultivar adoption decisions based on maximizing profitability via risks and returns under the framework of portfolio theory, but fail to consider spatially explicit constraints for soils, tillage, and water management. Other related studies have also estimated methane emissions and water use efficiency by cultivar for rice production in the mid-south, but have not connected these estimates to economic tradeoffs between cultivar selection, tillage, and soil texture. Given the rapid reductions in water availability in the Mississippi River Delta (MRD) and the large methane emissions footprint associated with flooded rice production, there are increasing pressures on the American rice industry to improve resource-use efficiency. Currently no study has investigated how management decisions such as cultivar selection and locational constraints such as soil texture could be optimized to (1) maintain current profitability while (2) minimizing methane emissions and water usage. Therefore, the objective of this study is to identify a portfolio of rice cultivars based on profit risks and returns, while minimizing methane emissions and water usage, respectively, at the county/parish level in the MRD. In doing so, we estimate the level at which methane emissions and water usage could be reduced at current levels of profitability per acre. We use data from university rice performance trials in Arkansas, Louisiana, and Mississippi from 2005 through 2014, as well as actual rice production data at the county/parish level throughout the MRD for 2015-2017. Soils data included in the study were collected from the National Resources Conservation Service SSURGO Database. To understand optimal profit decisions, we create an efficiency frontier based on estimates of profit and variance for each cultivar, combined with varietal pairwise covariances. We combine our results with average county-level rice production data from 2015-2017 to generate improved risk-return efficiencies for rice production assuming farmers adopt cultivar portfolios on the efficient frontier in order to maintain profits while (1) minimizing methane emissions and (2) minimizing water usage. By doing so we will estimate how much methane emissions and water usage could be reduced via cultivar selection across soil textures at the county level throughout the MRD. We will discuss the tradeoffs among management and locational factors based on these results, which could have significant implications for sustainability in the rice industry throughout the MRD. Based on the findings in this study, we can provide the rice industry recommendations which can maintain profits while reducing their environmental impacts. This information could be particularly important for policy makers as water management and climate change policies are constantly evolving at the state and federal levels. Moreover, this could provide a platform for best management practices in rice production, which the rice industry could potentially use as a metric in marketing sustainable rice.