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.

The Myrtle Rust pathogen has arrived - and South African Myrtales are at risk : green news - plant disease alert

For many years Australian forest pathologists and other scientists have dreaded the arrival of the rust fungus, Puccinia psidii, commonly known as Myrtle Rust, in Australia. This pathogen eventually did arrive in that country and was first detected in New South Wales in 2010 on Willow Myrtle (Agonis flexuosa). It is generally accepted that it entered the country on an ornamental Myrtales* host brought in by a private nursery. Despite efforts to eradicate the invasive rust, it has already spread widely, now occurring along the east coast of Australia, from temperate areas in Victoria and southern North South Wales to tropical areas in north Queensland.

Flying-Fox Species Density-A Spatial Risk Factor for Hendra Virus Infection in Horses in Eastern Australia

Hendra virus causes sporadic but typically fatal infection in horses and humans in eastern Australia. Fruit-bats of the genus Pteropus (commonly known as flying-foxes) are the natural host of the virus, and the putative source of infection in horses; infected horses are the source of human infection. Effective treatment is lacking in both horses and humans, and notwithstanding the recent availability of a vaccine for horses, exposure risk mitigation remains an important infection control strategy. This study sought to inform risk mitigation by identifying spatial and environmental risk factors for equine infection using multiple analytical approaches to investigate the relationship between plausible variables and reported Hendra virus infection in horses. Spatial autocorrelation (Global Moran’s I) showed significant clustering of equine cases at a distance of 40 km, a distance consistent with the foraging ‘footprint’ of a flying-fox roost, suggesting the latter as a biologically plausible basis for the clustering. Getis-Ord Gi* analysis identified multiple equine infection hot spots along the eastern Australia coast from far north Queensland to central New South Wales, with the largest extending for nearly 300 km from southern Queensland to northern New South Wales. Geographically weighted regression (GWR) showed the density of P. alecto and P. conspicillatus to have the strongest positive correlation with equine case locations, suggesting these species are more likely a source of infection of Hendra virus for horses than P. poliocephalus or P. scapulatus. The density of horses, climate variables and vegetation variables were not found to be a significant risk factors, but the residuals from the GWR suggest that additional unidentified risk factors exist at the property level. Further investigations and comparisons between case and control properties are needed to identify these local risk factors.

Is Aldi’s move to woo cashed-up shoppers a risk?

While Aldi’s launch of their new “trial” stores may seem to be an attempt to capture middle income shoppers, it may end in disaster. Aldi’s four new trial stores located in Queensland, NSW, ACT and Victoria, will offer improved lighting, larger layouts and an expanded offering of fresh food including extending produce ranges, in-house bakeries and premium brands. Employing Nielsen’s 2014 Homescan Report, Aldi have determined that only 30% of their customers were now considered “low-income shoppers”. Some 34.4% were from middle-income households and the remaining 35.6% now had household incomes greater than AUD$90,000 a year - a segment which has grown by 6.7% since 2011. So this probably the reason for Aldi’s foray into new stores and ranges. However, such a move is considered risky.

Human health risk of toxic chemical pollutants generated from traffic and land use activities

The research project developed a quantitative approach to assess the risk to human health from heavy metals and polycyclic aromatic hydrocarbons in urban stormwater based on traffic and land use factors. The research outcomes are expected to strengthen the scientifically robust management and reuse of urban stormwater. The innovative methodology developed can be applied to evaluate human health risk in relation to toxic chemical pollutants in urban stormwater runoff and for the development of effective risk mitigation strategies.

Integration of natural hazards, risk and climate change into spatial planning practices

Most countries of Europe, as well as many countries in other parts of the world, are experiencing an increased impact of natural hazards. It is often speculated, but not yet proven, that climate change might influence the frequency and magnitude of certain hydro-meteorological natural hazards. What has certainly been observed is a sharp increase in financial losses caused by natural hazards worldwide. Eventhough Europe appears to be a space that is not affected by natural hazards to such catastrophic extents as other parts of the world are, the damages experienced here are certainly increasing too. Natural hazards, climate change and, in particular, risks have therefore recently been put high on the political agenda of the EU. In the search for appropriate instruments for mitigating impacts of natural hazards and climate change, as well as risks, the integration of these factors into spatial planning practices is constantly receiving higher attention. The focus of most approaches lies on single hazards and climate change mitigation strategies. The current paradigm shift of climate change mitigation to adaptation is used as a basis to draw conclusions and recommendations on what concepts could be further incorporated into spatial planning practices. Especially multi-hazard approaches are discussed as an important approach that should be developed further. One focal point is the definition and applicability of the terms natural hazard, vulnerability and risk in spatial planning practices. Especially vulnerability and risk concepts are so many-fold and complicated that their application in spatial planning has to be analysed most carefully. The PhD thesis is based on six published articles that describe the results of European research projects, which have elaborated strategies and tools for integrated communication and assessment practices on natural hazards and climate change impacts. The papers describe approaches on local, regional and European level, both from theoretical and practical perspectives. Based on these, passed, current and future potential spatial planning applications are reviewed and discussed. In conclusion it is recommended to shift from single hazard assessments to multi-hazard approaches, integrating potential climate change impacts. Vulnerability concepts should play a stronger role than present, and adaptation to natural hazards and climate change should be more emphasized in relation to mitigation. It is outlined that the integration of risk concepts in planning is rather complicated and would need very careful assessment to ensure applicability. Future spatial planning practices should also consider to be more interdisciplinary, i.e. to integrate as many stakeholders and experts as possible to ensure the sustainability of investments.

Smoking behaviour modifies IL23r-associated disease risk in patients with Crohn's disease

Background and Aim The etiology of Crohn's disease (CD) implicates both genetic and environmental factors. Smoking behavior is one environmental risk factor to play a role in the development of CD. The study aimed to assess the contribution of the interleukin 23 receptor (IL23R) in determining disease susceptibility in two independent cohorts of CD, and to investigate the interactions between IL23R variants, smoking behavior, and CD-associated genes, NOD2 and ATG16L1. Methods Ten IL23R single-nucleotide polymorphisms (SNPs) were genotyped in 675 CD cases, and 1255 controls from Brisbane, Australia (dataset 1). Six of these SNPs were genotyped in 318 CD cases and 533 controls from Canterbury, New Zealand (dataset 2). Case–control analysis of genotype and allele frequencies, and haplotype analysis for all SNPs was conducted. Results We demonstrate a strong increased CD risk for smokers in both datasets (odds ratio 3.77, 95% confidence interval 2.88–4.94), and an additive interaction between IL23R SNPs and cigarette smoking. Ileal involvement was a consistent marker of strong SNP–CD association (P ≤ 0.001), while the lowest minor allele frequencies for location were found in those with colonic CD (L2). Three haplotype blocks were identified across the 10 IL23R SNPs conferring different risk of CD. Haplotypes conferred no further risk of CD when compared with single SNP analyses. Conclusion IL23R gene variants determine CD susceptibility in the Australian and New Zealand population, particularly ileal CD. A strong additive interaction exists between IL23R SNPs and smoking behavior resulting in a dramatic increase in disease risk depending upon specific genetic background.

A design approach to innovation in the Australian energy industry

Electricity businesses across Australia are facing many market disruptions, such as the increasing demand from the rapid uptake of domestic air conditioners and the contrasting problematic generation from solar power connections to the grid. In this context, the opportunity to proactively leverage forthcoming technological advances in battery storage and electric vehicles to address the steeply rising cost of electricity supply has emerged. This research explores a design approach to support a business to navigate such disruptions in the current market.This study examines a design-led approach to innovation conducted over a ten month action research study within a large, risk-averse firm in the Australian energy sector. This article presents results describing a current foresight gap within the business; the response of the business to using design-led innovation to address this issue; and the tools, approaches and processes used. The business responses indicate their perception of the value of qualitative customer engagement as a path to addressing, and potentially benefiting from, disruptive innovation. It is anticipated that these results will further business model development within the company, and assist in leveraging disruptive innovations for this industry participant, thus limiting future increases in the cost of electricity supply for customers in Australia.

Firm transformation: Advancing a Darwinian perspective

Purpose of the paper: The paper advocates a Darwinian explanation of the process of firm transformation. Existing, but generally opposing views related to the selection-adaptation debates are united to consider the dialogic nature of both approaches. It is argued that a Darwinian approach, as opposed to a neo-Darwinian or Lamarckian approach provides the means to scale the sides of a debate that has for too long divided scholars interested in firm and industry transformation. Approach: The paper addresses three specific issues to develop its Darwinian argument. Firstly, the various work of Geoff Hodgson that have for many years advanced Darwin's evolutionary ideas are used to argue the nature and application of Darwinism in the socio-economic domain. Secondly, the nature of what constitutes the elements of firm-environment interaction is considered to establish basic areas of focus through which the process of firm transformation is more understandable. Lastly, the construct absorptive capacity is likened to a mechanism of transmission through which the learning processes associated with the acquisition of favoured variations can be reconciled with the generic evolutionary processes of variation, selection, and retention. Findings: To understand the process of firm learning, the role of habits and routines must be outlined in specific detail. They cannot be assumed to perform interacting and replicating roles simultaneously. To do so, undermines the fundamental qualities of an evolutionary theory. What is the original/value of paper: The preliminary framework advanced takes us beyond the Darwinian - Lamarckian debate and provides elements of focus from which a greater understanding of the process of firm/industry transformation is possible.

An alternative view of small firm adaptation

Increasingly, small firms with a history tied to a specific geographic location are having their survival threatened by new and innovative web-based entrants. This paper considers the plight of such firms and proposes an alternative means to reflect on how they may or may not learn about such threats. Adopting an evolutionary perspective, the construct absorptive capacity is used to highlight the deficiencies of current market orientation theory to explain the process of firm learning. The conceptual model of evolutionary potential provides a framework through which both the firm and its owner/s' abilities to learn can be taken into account.

Small firm internet adoption: opportunities forgone, a journey not begun

This paper explores the endeavours of five small firms to develop web-based commerce capabilities within their existing operations. The focus is upon the strategic acquisition and exploitation of knowledge which underpins new value creating activates related to web-based commerce. A normative web-based commerce adoption model developed from a review of the extant literature related to electronic marketing, entrepreneurship, and the diffusion of new innovations was empirically tested. A multiple case study design enabled the exploration of contemporary marketing and entrepreneurship issues within the real life context of five small firms. The model aimed to emphasis best-practice adoption methods emphasizing the value of a firm's market orientation and entrepreneurial capabilities. A preliminary test of the model's theoretical contentions lent support to its overall focus, but found that the firm's existing learning capabilities were diminished during the adoption of web-based commerce, and that a lack of vision and prior knowledge produced sub-optimal adoption outcomes.

Small firm internet adoption: A market oriented approach

Fundamental to the development of new customer value offerings via web-based commerce is a small firm's ability to strategically acquire and exploit knowledge. The focus of this paper is the empirical testing of a normative web-based commerce adoption model developed from a review of the extant literature related to electronic marketing, the Internet and the diffusion of new innovations. A preliminary test of the model's theoretical contentions lent support to its overall focus, but found that the firm's existing learning capabilities were diminished during the adoption of web-based commerce. Consequently, sub-optimal adoption outcomes were associated with insufficient knowledge development.

Gene flow from transgenic plant populations: models and applications for risk assessment

The future use of genetically modified (GM) plants in food, feed and biomass production requires a careful consideration of possible risks related to the unintended spread of trangenes into new habitats. This may occur via introgression of the transgene to conventional genotypes, due to cross-pollination, and via the invasion of GM plants to new habitats. Assessment of possible environmental impacts of GM plants requires estimation of the level of gene flow from a GM population. Furthermore, management measures for reducing gene flow from GM populations are needed in order to prevent possible unwanted effects of transgenes on ecosystems. This work develops modeling tools for estimating gene flow from GM plant populations in boreal environments and for investigating the mechanisms of the gene flow process. To describe spatial dimensions of the gene flow, dispersal models are developed for the local and regional scale spread of pollen grains and seeds, with special emphasis on wind dispersal. This study provides tools for describing cross-pollination between GM and conventional populations and for estimating the levels of transgenic contamination of the conventional crops. For perennial populations, a modeling framework describing the dynamics of plants and genotypes is developed, in order to estimate the gene flow process over a sequence of years. The dispersal of airborne pollen and seeds cannot be easily controlled, and small amounts of these particles are likely to disperse over long distances. Wind dispersal processes are highly stochastic due to variation in atmospheric conditions, so that there may be considerable variation between individual dispersal patterns. This, in turn, is reflected to the large amount of variation in annual levels of cross-pollination between GM and conventional populations. Even though land-use practices have effects on the average levels of cross-pollination between GM and conventional fields, the level of transgenic contamination of a conventional crop remains highly stochastic. The demographic effects of a transgene have impacts on the establishment of trangenic plants amongst conventional genotypes of the same species. If the transgene gives a plant a considerable fitness advantage in comparison to conventional genotypes, the spread of transgenes to conventional population can be strongly increased. In such cases, dominance of the transgene considerably increases gene flow from GM to conventional populations, due to the enhanced fitness of heterozygous hybrids. The fitness of GM plants in conventional populations can be reduced by linking the selectively favoured primary transgene to a disfavoured mitigation transgene. Recombination between these transgenes is a major risk related to this technique, especially because it tends to take place amongst the conventional genotypes and thus promotes the establishment of invasive transgenic plants in conventional populations.

Risk assessment for Puccinia psidii becoming established in South Africa

Puccinia psidii, the causal agent of myrtle rust, was first recorded from Latin America more than 100 years ago. It occurs on many native species of Myrtaceae in Latin America and also infects non-native plantation-grown Eucalyptus species in the region. The pathogen has gradually spread to new areas including Australia and most recently South Africa. The aim of this study was to consider the susceptibility of selected Eucalyptus genotypes, particularly those of interest to South African forestry, to infection by P. psidii. In addition, risk maps were compiled based on suitable climatic conditions and the occurrence of potential susceptible tree species. This made it possible to identify the season when P. psidii would be most likely to infect and to define the geographic areas where the rust disease would be most likely to establish in South Africa. As expected, variation in susceptibility was observed between eucalypt genotypes tested. Importantly, species commonly planted in South Africa show good potential for yielding disease-tolerant material for future planting. Myrtle rust is predicted to be more common in spring and summer. Coastal areas, as well as areas in South Africa with subtropical climates, are more conducive to outbreaks of the pathogen.

Re-use of chicken litter across broiler cycles – managing the food-borne pathogen risk

Thus the objectives of this study can be broadly categorised as follows:-  Evaluate current practices adopted (e.g. litter pile-up) prior to re-use of litter for subsequent chicken cycles  To establish pathogen die-off that occurs during currently adopted methods of in-shed treatment of litter  To establish simple physical parameters to monitor this pathogen reduction and create an understanding of such reduction strategies to aid in-shed management of re-use litter  To carry out studies to assess the potential of the re-used litter (once spread) to support pathogens during a typical chicken production cycle.  To provide background data for the development of a simple code of practice for an in-shed litter pile-up process