Assessing the economic value of seasonal climate forecasts for corn-based farming systems in Leyte, Philippines

Canesio Predo, Peter Hayman, Jason Crean, John Mullen, Kevin Parton, Flaviana Hilario, Rosalina de Guzman, Edna Juanillo, C. M. Reyes, E. Monte, J. Liguton

Research output: Book chapter/Published conference paperConference paperpeer-review

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A forecast has value if the 'with forecast' scenario leads to different decisions and improved outcomes over the decisions and outcomes of the 'without forecast' scenario. Results show that SCF is valuable particular forecast types at certain periods of the year. The average return for particular forecast types was higher when averaged over the years of forecast period than using entire climatology. This suggests that corn farmers can gain additional benefits from skillful climate forecasts in corn production for particular cropping decision. Policy implications and recommendations were discussed.Corn is considered the most important crop next to rice in the Philippines. It is highly valued as human food, animal feed, and as raw materials for industry. While corn is an important commodity for the Philippine economy, corn farming still remains a risky investment largely because it is dependent on a highly variable climate. Like in many parts of the world, climate variability is one of the main sources of uncertainty and risk in many agricultural systems in the Philippines. Agriculture has been described as the most weather-dependent of human activities, and for this reason there is a need for this factor to be considered directly or indirectly in most production decisions.The application of seasonal climate forecast (SCF) provides rainfed corn farmers greater ability to manage climatic risk. This study estimates the economic value of SCF for corn-based farming in Leyte, Philippines. Specifically, it aims to: (i) present a brief description of dominant cropping patterns and corn production practices in the study area; (ii) review and present a valuation framework for estimating the economic benefits of SCFs information under various assumptions of risks and uncertainty; (iii) quantity the potential economic value of SCF information to corn farmers; and (iv) draw policy implications on the usefulness of SCF to corn farmers in the Philippines.The CERES-Maize model within DSSAT V4 is used to estimate the consequences of meteorological differences of different ENSO (EL Niño Southern Oscillation) phases on crop yield. The value of seasonal climate forecasts is determined as the difference in economic returns from optimal decisions based on ENSO ('with forecast') and optimal decisions based on historic climatology ('without forecasts').
Original languageEnglish
Title of host publication6th ASAE International Conference
Subtitle of host publicationThe Asian economic renaissance: What is in it for agriculture
Place of PublicationPhilippines
Number of pages12
Publication statusPublished - 2008
EventAsian Society of Agricultural Economics (ASAE) International Conference - Makati City, Philippines, Philippines
Duration: 28 Aug 200830 Aug 2008


ConferenceAsian Society of Agricultural Economics (ASAE) International Conference


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