Determining the Optimal Cropping Pattern with Emphasis on Income Risk: A Case study of Roshanabad Subdistrict of Gorgan County in Iran

The changing environment of agricultural activities face farmers to a variety of risks and uncertainties that influence the decisions of production, sustainability and profitability of these activities. Income risk as a result of both price and crop yield risks is one of the most important risks for farmers. In this study, optimal cropping pattern of crops as a tool for managing income risk was determined using diversification-consistent Data Envelopment Analysis (DEA) model based on directional-distance measures. For this purpose, the expected profit and the conditional value at risk at different probability levels were used as return and risk measures. The results showed that in the optimal cropping pattern, the share of wheat decreased and the share of more profitable crops such as medium rice grain with high-quality increased; in addition, crops such as soybeans and cotton with less profit and more risk were eliminated from the optimal cropping pattern. Based on the study results, it is suggested to use tools such as income insurance, compensating payments and a revenue stabilization fund for the development of rice cultivation in the region.