Allocation of fertilizer among crops under risk: A quadratic programming approach

The main sources of risk and uncertainty in crop and livestock production are price of input and outputs and yield instability. The factors responsible for price fluctuation are unstable National and International commodity prices and shifts in Government policies. The E-V model was used to assess the impact of price uncertainty on land and fertilizer allocations among crops in Uttar Pradesh, India. The model resulted in an EV frontier that showed the trade-off between the expected income and the standard deviation of the income. The efficiency of frontier corresponding to a number of alternative policies, each of them reflecting a different risk aversion level of the policy makers. Uttar Pradesh state was selected for the study because the consumption of fertilizer for unit is also comparatively high in this state. The consumption of nitrogen fertilizer nutrient in the year 2008–09 was used as the availability of nitrogen fertilizer nutrient. The percentage estimate the flexibility coefficient was based on the yearly change in crop area during the past. A quadratic risk programming model was used for determine the optimal combination of crops for the state. The risk caused by price in stability resulting in variation in the income from the crop affected the allocation of land and fertilizer among the crops. Low risk crops associated with low level of fertilizer were in the optimal cropping plan in place of high risk crops.