Identifying risk-efficient strategies using stochastic frontier analysis and simulation: An application to irrigated cropping in Australia

In irrigated cropping, as with any other industry, profit and risk are inter-dependent. An increase in profit would normally coincide with an increase in risk, and this means that risk can be traded for profit. It is desirable to manage a farm so that it achieves the maximum possible profit for the desired level of risk. This paper identifies risk-efficient cropping strategies that allocate land and water between crop enterprises for a case study of an irrigated farm in Southern Queensland, Australia. This is achieved by applying stochastic frontier analysis to the output of a simulation experiment. The simulation experiment involved changes to the levels of business risk by systematically varying the crop sowing rules in a bioeconomic model of the case study farm. This model utilises the multi-field capability of the process based Agricultural Production System Simulator (APSIM) and is parameterised using data collected from interviews with a collaborating farmer. We found sowing rules that increased the farm area sown to cotton caused the greatest increase in risk-efficiency. Increasing maize area also improved risk-efficiency but to a lesser extent than cotton. Sowing rules that increased the areas sown to wheat reduced the risk-efficiency of the farm business. Sowing rules were identified that had the potential to improve the expected farm profit by ca. $50,000 Annually, without significantly increasing risk. The concept of the shadow price of risk is discussed and an expression is derived from the estimated frontier equation that quantifies the trade-off between profit and risk.

APSIM – Evolution towards a new generation of agricultural systems simulation

Agricultural systems models worldwide are increasingly being used to explore options and solutions for the food security, climate change adaptation and mitigation and carbon trading problem domains. APSIM (Agricultural Production Systems sIMulator) is one such model that continues to be applied and adapted to this challenging research agenda. From its inception twenty years ago, APSIM has evolved into a framework containing many of the key models required to explore changes in agricultural landscapes with capability ranging from simulation of gene expression through to multi-field farms and beyond. Keating et al. (2003) described many of the fundamental attributes of APSIM in detail. Much has changed in the last decade, and the APSIM community has been exploring novel scientific domains and utilising software developments in social media, web and mobile applications to provide simulation tools adapted to new demands. This paper updates the earlier work by Keating et al. (2003) and chronicles the changing external challenges and opportunities being placed on APSIM during the last decade. It also explores and discusses how APSIM has been evolving to a “next generation” framework with improved features and capabilities that allow its use in many diverse topics.

Resting pastures to improve land condition in northern Australia: guidelines based on the literature and simulation modelling

Pasture rest is a possible strategy for improving land condition in the extensive grazing lands of northern Australia. If pastures currently in poor condition could be improved, then overall animal productivity and the sustainability of grazing could be increased. The scientific literature is examined to assess the strength of the experimental information to support and guide the use of pasture rest, and simulation modelling is undertaken to extend this information to a broader range of resting practices, growing conditions and initial pasture condition. From this, guidelines are developed that can be applied in the management of northern Australia’s grazing lands and also serve as hypotheses for further field experiments. The literature on pasture rest is diverse but there is a paucity of data from much of northern Australia as most experiments have been conducted in southern and central parts of Queensland. Despite this, the limited experimental information and the results from modelling were used to formulate the following guidelines. Rest during the growing season gives the most rapid improvement in the proportion of perennial grasses in pastures; rest during the dormant winter period is ineffective in increasing perennial grasses in a pasture but may have other benefits. Appropriate stocking rates are essential to gain the greatest benefit from rest: if stocking rates are too high, then pasture rest will not lead to improvement; if stocking rates are low, pastures will tend to improve without rest. The lower the initial percentage of perennial grasses, the more frequent the rests should be to give a major improvement within a reasonable management timeframe. Conditions during the growing season also have an impact on responses with the greatest improvement likely to be in years of good growing conditions. The duration and frequency of rest periods can be combined into a single value expressed as the proportion of time during which resting occurs; when this is done the modelling suggests the greater the proportion of time that a pasture is rested, the greater is the improvement but this needs to be tested experimentally. These guidelines should assist land managers to use pasture resting but the challenge remains to integrate pasture rest with other pasture and animal management practices at the whole-property scale.

Modelling the manager: Representing rule-based management in farming systems simulation models

We trace the evolution of the representation of management in cropping and grazing systems models, from fixed annual schedules of identical actions in single paddocks toward flexible scripts of rules. Attempts to define higher-level organizing concepts in management policies, and to analyse them to identify optimal plans, have focussed on questions relating to grazing management owing to its inherent complexity. “Rule templates” assist the re-use of complex management scripts by bundling commonly-used collections of rules with an interface through which key parameters can be input by a simulation builder. Standard issues relating to parameter estimation and uncertainty apply to management sub-models and need to be addressed. Techniques for embodying farmers' expectations and plans for the future within modelling analyses need to be further developed, especially better linking planning- and rule-based approaches to farm management and analysing the ways that managers can learn.

Efficient simulation of unsaturated flow in heterogeneous soils using an exponential integrator

- Provided a practical variable-stepsize implementation of the exponential Euler method (EEM). - Introduced a new second-order variant of the scheme that enables the local error to be estimated at the cost of a single additional function evaluation. - New EEM implementation outperformed sophisticated implementations of the backward differentiation formulae (BDF) of order 2 and was competitive with BDF of order 5 for moderate to high tolerances.

Boosting the productivity and profitability of northern Australian beef enterprises: Exploring innovation options using simulation modelling and systems analysis

The financial health of beef cattle enterprises in northern Australia has declined markedly over the last decade due to an escalation in production and marketing costs and a real decline in beef prices. Historically, gains in animal productivity have offset the effect of declining terms of trade on farm incomes. This raises the question of whether future productivity improvements can remain a key path for lifting enterprise profitability sufficient to ensure that the industry remains economically viable over the longer term. The key objective of this study was to assess the production and financial implications for north Australian beef enterprises of a range of technology interventions (development scenarios), including genetic gain in cattle, nutrient supplementation, and alteration of the feed base through introduced pastures and forage crops, across a variety of natural environments. To achieve this objective a beef systems model was developed that is capable of simulating livestock production at the enterprise level, including reproduction, growth and mortality, based on energy and protein supply from natural C4 pastures that are subject to high inter-annual climate variability. Comparisons between simulation outputs and enterprise performance data in three case study regions suggested that the simulation model (the Northern Australia Beef Systems Analyser) can adequately represent the performance beef cattle enterprises in northern Australia. Testing of a range of development scenarios suggested that the application of individual technologies can substantially lift productivity and profitability, especially where the entire feedbase was altered through legume augmentation. The simultaneous implementation of multiple technologies that provide benefits to different aspects of animal productivity resulted in the greatest increases in cattle productivity and enterprise profitability, with projected weaning rates increasing by 25%, liveweight gain by 40% and net profit by 150% above current baseline levels, although gains of this magnitude might not necessarily be realised in practice. While there were slight increases in total methane output from these development scenarios, the methane emissions per kg of beef produced were reduced by 20% in scenarios with higher productivity gain. Combinations of technologies or innovative practices applied in a systematic and integrated fashion thus offer scope for providing the productivity and profitability gains necessary to maintain viable beef enterprises in northern Australia into the future.

Hybrid Simulation of Queuing-System Dynamics

This paper presents a simple hybrid computer technique to study the transient behaviour of queueing systems. This method is superior to stand-alone analog or digital solution because the hardware requirement is excessive for analog technique whereas computation time is appreciable in the latter case. By using a hybrid computer one can share the analog hardware thus requiring fewer integrators. The digital processor can store the values, play them back at required time instants and change the coefficients of differential equations. By speeding up the integration on the analog computer it is feasible to solve a large number of these equations very fast. Hybrid simulation is even superior to the analytic technique because in the latter case it is difficult to solve time-varying differential equations.

An improved simulation model to predict pre-harvest aflatoxin risk in maize

Aflatoxin is a potent carcinogen produced by Aspergillus flavus, which frequently contaminates maize (Zea mays L.) in the field between 40° north and 40° south latitudes. A mechanistic model to predict risk of pre-harvest contamination could assist in management of this very harmful mycotoxin. In this study we describe an aflatoxin risk prediction model which is integrated with the Agricultural Production Systems Simulator (APSIM) modelling framework. The model computes a temperature function for A. flavus growth and aflatoxin production using a set of three cardinal temperatures determined in the laboratory using culture medium and intact grains. These cardinal temperatures were 11.5 °C as base, 32.5 °C as optimum and 42.5 °C as maximum. The model used a low (≤0.2) crop water supply to demand ratio—an index of drought during the grain filling stage to simulate maize crop's susceptibility to A. flavus growth and aflatoxin production. When this low threshold of the index was reached the model converted the temperature function into an aflatoxin risk index (ARI) to represent the risk of aflatoxin contamination. The model was applied to simulate ARI for two commercial maize hybrids, H513 and H614D, grown in five multi-location field trials in Kenya using site specific agronomy, weather and soil parameters. The observed mean aflatoxin contamination in these trials varied from <1 to 7143 ppb. ARI simulated by the model explained 99% of the variation (p ≤ 0.001) in a linear relationship with the mean observed aflatoxin contamination. The strong relationship between ARI and aflatoxin contamination suggests that the model could be applied to map risk prone areas and to monitor in-season risk for genotypes and soils parameterized for APSIM.

An improved simulation model to predict pre-harvest aflatoxin risk in maize

Aflatoxin is a potent carcinogen produced by Aspergillus flavus, which frequently contaminates maize (Zea mays L.) in the field between 40° north and 40° south latitudes. A mechanistic model to predict risk of pre-harvest contamination could assist in management of this very harmful mycotoxin. In this study we describe an aflatoxin risk prediction model which is integrated with the Agricultural Production Systems Simulator (APSIM) modelling framework. The model computes a temperature function for A. flavus growth and aflatoxin production using a set of three cardinal temperatures determined in the laboratory using culture medium and intact grains. These cardinal temperatures were 11.5 °C as base, 32.5 °C as optimum and 42.5 °C as maximum. The model used a low (≤0.2) crop water supply to demand ratio—an index of drought during the grain filling stage to simulate maize crop's susceptibility to A. flavus growth and aflatoxin production. When this low threshold of the index was reached the model converted the temperature function into an aflatoxin risk index (ARI) to represent the risk of aflatoxin contamination. The model was applied to simulate ARI for two commercial maize hybrids, H513 and H614D, grown in five multi-location field trials in Kenya using site specific agronomy, weather and soil parameters. The observed mean aflatoxin contamination in these trials varied from <1 to 7143 ppb. ARI simulated by the model explained 99% of the variation (p ≤ 0.001) in a linear relationship with the mean observed aflatoxin contamination. The strong relationship between ARI and aflatoxin contamination suggests that the model could be applied to map risk prone areas and to monitor in-season risk for genotypes and soils parameterized for APSIM.

Monte Carlo simulation of Ising chains showing several phase transitions

A Monte Carlo simulation of Ising chains with competing short-range and infiniterange interactions has been carried out. Results show that whenever the system does not enter a metastable state, variation of temperature brings about phase transitions in the Ising chain. These phase transitions, except for two sets of interaction strengths, are generally of higher order and involve changes in the long-range order while the short-range order remains unaffected.

Mathematical modelling and numerical simulation of phosphine flow during grain fumigation in leaky cylindrical silos

The phosphine distribution in a cylindrical silo containing grain is predicted. A three-dimensional mathematical model, which accounts for multicomponent gas phase transport and the sorption of phosphine into the grain kernel is developed. In addition, a simple model is presented to describe the death of insects within the grain as a function of their exposure to phosphine gas. The proposed model is solved using the commercially available computational fluid dynamics (CFD) software, FLUENT, together with our own C code to customize the solver in order to incorporate the models for sorption and insect extinction. Two types of fumigation delivery are studied, namely, fan- forced from the base of the silo and tablet from the top of the silo. An analysis of the predicted phosphine distribution shows that during fan forced fumigation, the position of the leaky area is very important to the development of the gas flow field and the phosphine distribution in the silo. If the leak is in the lower section of the silo, insects that exist near the top of the silo may not be eradicated. However, the position of a leak does not affect phosphine distribution during tablet fumigation. For such fumigation in a typical silo configuration, phosphine concentrations remain low near the base of the silo. Furthermore, we find that half-life pressure test readings are not an indicator of phosphine distribution during tablet fumigation.

A heterogeneous computing approach to simulation of the Heston Stochastic Volatility Model

Stochastic volatility models are of fundamental importance to the pricing of derivatives. One of the most commonly used models of stochastic volatility is the Heston Model in which the price and volatility of an asset evolve as a pair of coupled stochastic differential equations. The computation of asset prices and volatilities involves the simulation of many sample trajectories with conditioning. The problem is treated using the method of particle filtering. While the simulation of a shower of particles is computationally expensive, each particle behaves independently making such simulations ideal for massively parallel heterogeneous computing platforms. In this paper, we present our portable Opencl implementation of the Heston model and discuss its performance and efficiency characteristics on a range of architectures including Intel cpus, Nvidia gpus, and Intel Many-Integrated-Core (mic) accelerators.