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Abstract
The value of a climate forecasting system based on phases of the Southern
Oscillation was estimated for a representative dryland wheat grower in the
vicinity of Goondiwindi. In particular the effects on this estimate of risk attitude
and planting conditions were examined. A recursive stochastic programming
approach was used to identify the grower's utility-maximising action set in the
event of each of the climate patterns over the period 1894-1991 recurring in the
imminent season. The approach was repeated with and without use of the
forecasts. The choices examined were. at planting, nitrogen application rate and
cultivar and, later in the season. choices of proceeding with or abandoning each
wheat activity. The value of the forecasting system was estimated as the
maximum amount the grower could afford to pay for its use without expected
utility being lowered relative to its non-use.