Impacts of Harvesting Age and Pricing Schemes on Economic Sustainability of Cassava Farmers in Thailand under Market Uncertainty

Abstract

This paper involves an analysis to determine appropriate cassava harvest practices and choose a pricing scheme between farmers and factories, cassava yards, and collectors in Thailand. Harvest practices represent all activities from land preparation to harvest. A key decision that governs the amount of resources required during cassava life cycle is the cassava’s harvesting age. The harvesting age can be from eight to 18 months in two patterns: fixed age, e.g., harvest every 12 months, and variable age, e.g., harvest at an age between 10 and 14 months. After harvesting, there are two common pricing schemes to consider, which are weight-based and starch-content-based. Factors that affect the two decisions made by Thai farmers at a given time are the market price, which highly varies within a season and between seasons, and yields in terms of weight and starch content, both of which change with cassava’s age and/or harvest month. Economic sustainability measure for Thai farmers is the average monthly profit that the farmers gain over cassava harvest cycle under uncertain market price. To handle uncertainties, a simulation model is constructed to imitate cassava planting activities from cultivation to harvest. The purpose is to evaluate various harvesting ages and two pricing schemes under uncertain cassava market prices. Market prices in 15 seasons (2006–2021) are grouped using the k-mean clustering into four price scenarios. As cassava grows in the simulation, the required resources are consumed until the decisions on harvesting time and pricing scheme are made with estimated selling probability under different price scenarios and uncertainty in cassava yield. Through simulation, harvesting age and pricing scheme that are most profitable and robust-to-system-variation are determined. Finally, a guideline for Thai farmers to choose a pricing scheme is developed based on the sensitivity analysis of the simulation model.