Page 234 - Contributed Paper Session (CPS) - Volume 3

CPS2002 Atina A. et al.
Fig. 3 shows the estimation of yield-based agricultural losses. Based on the
result, the losses have occurred mostly in the early years. It might happen
because in the early years there was a lot of temperature decline which was
indicated by the temperature change graph that often declined (see Fig. 1).
The losses also occurred around the beginning of year 2000 and close to 2016.
The reason is similar with the previous indication. Therefore, it can be
concluded that the losses happen mostly when the temperature is low.
Furthermore, the estimation of value at risk is calculated based on the marginal
distribution of the rice production. Because it follows Weibull distribution, then
the value at risk is calculated by
1
ˆ
VaR ( Y) =  p =  ( log(− 1− p) ) ˆ (14)
p
k
The estimation of value at risk at confidence levels of 90%, 95%, and 99%
are 50740.83, 54230.45, and 60456.33 (in hg/ha), respectively. It means that
the farmers prepare to suffer losses at the level of 100  90 % at the rice
p
production value greater than 50000 hg/ha.

Figure 4. Value at Risk Estimation
4. Conclusion
The estimation of yield-based agricultural losses and value at risk in the
form of losses has been conducted using copula models. Overall, the result
shows that the losses might occurred mostly when the temperature decline. It
indicates that rice production has quite strong dependency with the weather
risk, in this case is temperature change. Furthermore, by using value at risk,
the farmers can estimate when to prepare for losses.

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