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
Abstract
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