Risk Analysis of Tillage Alternatives with Government Programs

Stochastic dominance analysis of two tillage systems, conventional tillage and no-tillage, for five crop rotations, wheat-fallow, grain sorghum-fallow, continuous wheat, continuous grain sorghum, and wheat-grain sorghum-fallow, shows that risk-averse managers prefer a conventional tillage wheat-sorghum-fallow system. Small changes in production costs or yields lead to indifference between this system and the no-tillage wheat-sorghum-fallow and no-till and conventional wheat-fallow systems. Participation in the basic government commodity program generally increases average net returns and lowers variation of returns. Government commodity program payments calculated under a variety of scenarios do not generally encourage the use of no-till practices for grain sorghum and wheat in the central Great Plains.