A methodological way of evaluating innovative cropping systems integrating risk beliefs and risk preferences

In the paper, we propose a methodological way of leading an economical assessment of innovative cropping systems (ICSs). The originality lies in the integration of the crop management flexibility and the farmers’ risk perception and risk preferences. Two conventional cropping systems have been studied (continuous irrigated maize and wheat/sunflower rotation). For each of them, an innovative long rotation has been co-designed by farmers to reach various objectives, notably reduce the pressure on natural resources. The methodological protocol is tested thought a sample of 23 specialized cash crop farmers of Southwestern France is surveyed: subjective probabilities linked to climatic risk perceived are assessed and farmers’ risk aversion is elicited through experimental lotteries. Without risk consideration, the adoption of ICSs should be discouraged, given the 2010-2011 crop price situation (mean gross margin loss of about 15 %). Accounting for the farmers’ risk perception and risk aversion, and using a risk criteria analysis the results are more mitigated. An adoption premium, computed for each farmer, shows that although all farmers are almost equally risk averse, the levels of adoption premiums are heterogeneous, due to different individual risk perceptions. Finally the paper proposes a method to account for risk preferences and subjective beliefs that raise heterogeneity in the attitude towards innovative cropping systems…