Multiyear versus single‐year drought: a comment on Peck and Adams

The importance of evaluating the effects of droughts that last for prolonged periods is well recognised in a recent paper by Peck and Adams (P&A) (2010, this Journal). However, in my view, the procedure followed in that paper does not yield an adequate measure of the difference between the economic effects of multiyear and single-year droughts. The purpose of this note is to further the debate on how to measure that difference. There are two major points of concern with P&A’s paper. First, P&A assume that farmers are bound to strictly follow a set of prespecified ‘agronomic rules’. This assumption is a crucial driver of the intertemporal decisions in the presented optimisation model. Second, the general argument put forward by the paper is sensitive to the choice of comparison points from simulations that are used to establish the difference between the effects of singleyear and multiyear droughts. These two concerns are somewhat related, as the simulation runs are subject to the constraining ‘agronomic rules’. I will elaborate further on these two issues, which will be followed by suggestions on avenues for further research. The assumption made in P&A’s paper that farmers have to follow a stringent set of ‘agronomic rules’ is, in my view, problematic. These ‘agronomic rules’ mainly consist of agronomic recommendations that reflect the susceptibility of certain crops to pests, diseases, nutrient deficiency and weeds. For example, P&A state that onions can only be grown once every 6 years, and maize (corn) cannot be grown in monoculture for more than 2 years. One could expect that the ‘agronomic rules’ implicitly reflect the superior profitability of rotating crops in the light of the cost of controlling pests, diseases and weeds, compared with growing crops in monoculture. This is the main reason why farmers would ever take-up those rules/recommendations. However, in the case of water shortages, trade-offs have to be considered between the susceptibility to pests, diseases and weeds and the associated costs embodied in the ‘agronomic rules’, and the profitability – or lack thereof because of inadequate water availability – of planting other crops. For example, despite agronomic rules saying that a certain crop cannot be grown on the same field for more than 2 years, in the light of expected water shortage, it might be optimal to grow it for the third consecutive year and incur the cost of treating pests, diseases and weeds, rather than planting some other crop that is likely