Seminar: Crop Planning in Sustainable Agriculture: Dynamic Farmland Allocation in the Presence of Crop Rotation Benefits

Friday, June 2, 2017 12:00 pm - 1:00 pm EDT (GMT -04:00)

Onur Boyabatli

Associate Professor
Operations Management, Singapore Management University


This paper examines crop planning decision in sustainable agriculture---that is, how to allocate farmland among multiple crops in each growing season when the crops have rotation benefits across growing seasons. We consider a farmer who periodically allocates the farmland between two crops in the presence of revenue uncertainty where revenue is stochastically larger and farming cost is lower when a crop is grown on rotated farmland (where the other crop was grown in the previous season). We characterize the optimal dynamic farmland allocation policy. Using a calibration based on a typical farmer growing corn and soybean in Iowa we provide rules of thumb for the effect of revenue uncertainty. In particular, we show that the farmer always benefits from a higher corn revenue volatility but benefits from a higher soybean revenue volatility only when this volatility is high; otherwise a lower soybean volatility is beneficial. We also show that growing only one crop over the entire planning horizon, as employed in industrial agriculture, leads to a considerable profit loss---that is, making crop planning based on principles of sustainable agriculture has substantial value. We propose a simple sustainable heuristic allocation policy and characterize the periodic allocation decision of this policy in closed form. Using our model calibration we show that the proposed policy not only outperforms the commonly suggested heuristic policies in the literature, but also provides a near-optimal performance.

Biographical Sketch

Onur Boyabatli is Associate Professor of Operations Management at the Lee Kong Chian School of Business, Singapore Management University. He holds a Ph.D. in Technology and Operations Management from INSEAD, France, M.S. and B.S. degrees in Industrial Engineering from Bilkent University, Turkey.

His research interests are in the area of integrated risk management in supply chains. His first research stream, operational decision making in commoditized industries with a special focus on agribusiness, primarily focuses on the integration of input risk management (through sourcing decisions) with output risk management (through processing and pricing decisions) in agricultural industries, and studies several operational problems (such as capacity and farnland management, procurement, farm-yield management, product pricing) of supply chain agents (such as farmers and processors) in this setting. His second research stream, technology and capacity management including integration with financing and financial risk management, studies technology and capacity management under financing frictions in capital-intensive industries (such as automotive); and operational and financial hedging in global supply chains.

His research papers have been published in Management Science and Manufacturing & Services Operations Management (M&SOM). He is the co-editor of “Handbook of Integrated Risk Management in Global Supply Chains.” He has served as the Associate Editor for the M&SOM journal’s special issue on Interface of Finance Operations and Risk Management (iFORM). He was awarded the Management Science Distinguished Service Award in 2012 and Meritorious Service Award in 2014. He co-organized the iFORM SIG (Special Interest Group) conference in 2012 and 2014, the 5th Mini-conference on Integrated Risk Management in Operations and Global Supply Chains in 2008. He served as the cluster chair for iFORM at the INFORMS conferences in 2012, 2013 and 2015.

He teaches courses related to Operations Management (e.g., Decision Analysis, Risk Management in Global Supply Chains, Interdisciplinary Research Topics in Operations Management) at various---executive, graduate (MBA and PhD) and undergraduate---levels.

Light refreshments will be served at 12pm