Policy Making Using Analytical Tools: A Case Study of InnovaAg – Educated Decision Making Incorporating @RISK

Farmers with limited resources require optimal decisions so that they can feed their families and avoid failure. A paradox exists – the corporate world has resources for the use of sophisticated decision-making technologies under uncertainty while subsistence farmers do not. However, the results of poor decision making at the farm level can have a profound impact on the ability of farmers to survive while corporate entities can more easily survive incidents of poor judgment.

Policy makers, as well, have limited resources. Unfortunately, most government decision makers do not possess expertise in sophisticated analytical techniques and view farmer problems and their solutions as simple and linear when in fact the components of these farming systems are more simultaneous, interdependent, and involve varying levels of risk. These decision makers often throw up their hands and opt for a costly and inefficient back of the envelope approach when these problems seemingly become too complex.

Sound decision analysis is critical for the success of small farmers. We are all awash in huge amounts of information and the problems and decisions facing farmers are complex. Surprisingly, cutting-edge methods such as Monte Carlo simulation and optimization under uncertainty - employed routinely throughout the corporate world - are not being applied to solve small farmer problems. Without the benefit of these tools to assess and manage risk, small farmers face conditions that add significantly to their risk and reduce their likelihood of success, sustainability and profitability.

In this free live webcast we will see how InnovaAg develops farm plans that include decisions that minimize risk taking into account weather conditions, commodity price fluctuations, input price changes, cultural characteristics, etc. These plans give the farmer the greatest chance of success (maximizing the certainty of achieving a particular goal), and provide incomes that are greater and more stable from season to season. Minimizing the fluctuations or volatility in farm income help farmers avoid catastrophic failure and allow them to remain on the land and continue farming.

Check out a 30 second YouTube video on the InnovaAg Approach http://www.youtube.com/watch?v=KTRbibIl3YY