Humboldt-Universität zu Berlin - Quarterly Journal of International Agriculture

Quarterly Journal of International Agriculture No. 2/09

Dynamic modeling of optimal papaya replanting decisions in the Philippines

Tiffany P. Laude
University of the Philippines Los Baños, Philippines

Gerald C. Nelson and Hayri Önal
University of Illinois at Urbana-Champaign, Urbana, IL, USA


The research question addressed in this paper is whether the standard papaya production practices in the Philippines maximize profits given the existing seasonality in prices. We use a dynamic simulation model to identify the profit-maximizing production cycle of the crop under varying price and crop yields for each variety, including a genetically modified version of the Solo papaya. Our simulation results show that if prices are constant throughout the year, the planting month is irrelevant, but the length of a production cycle affects the total net returns over a finite planning horizon. However, if seasonal prices vary significantly within a year, both the planting month and the cycle length do matter in terms of farmers’ net incomes.

Keywords: Philippine papaya varieties, dynamic simulation, optimal replanting decisions, genetically modified papaya

JEL: Q16

Vol. 48 (2009), No. 2: 155-170