Original Research Article
Year: 2017 | Month: April | Volume: 4 | Issue: 4 | Pages: 1-8
Simulation Model of Risk Management in the Gezira Scheme, Sudan
Sara A.E. Ali1, Hashim A. Elobeid2, Ali A. Salih3, Abubakr I. Hussein4, Babiker O. Mahgoub5
1Department of Agricultural Economics and Rural Development, Faculty of Agriculture technology and Fish Sciences– University of Neelin – Khartoum – Sudan.
2Development Studies and Research Institute (DSRI), University of Khartoum, Sudan.
3Department of Agricultural Economics, Faculty of Agriculture - University of Khartoum, Sudan.
4Senior Expert at SMEs Center, Arab Planning Institute, Kuwait.
5Department of Agricultural Economics, Faculty of Agriculture and Natural Resources, University of Bakht Al Ruda, EL- Dueim, Sudan
Corresponding Author: Babiker O. Mahgoub
ABSTRACT
Studies involving risk analysis could be most useful in a wide range of production optimization problems. The results of such studies could be valuable to private and public decision makers. Gezira scheme has a high potential of building national food security and foreign exchange earnings in the economy of Sudan. Tenant in the Gezira scheme face unstable farm income due to uncontrollable weather conditions and unpredictable input and output prices. The quadratic risk programming model was developed and used in this study to simulate the scheme according to expected income by different risk attitude. Primary data were collected from a random sample of 150 farmers in the scheme; secondary data were collected from relevant formal sources. The results showed that Groundnut is the most risky crop in the scheme followed by Sorghum, Cotton and Wheat. Reducing risks need sacrifice of relatively little expected income, so achieving higher income means being more risky. Management of agricultural risks contributes substantially to farm income stability.
Key words: expected income, risk, quadratic risk programming model, Gezira scheme, Sudan.
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