Land allocation conditioned on El Niño-Southern Oscillation phases in the Pampas of Argentina

The El Niño-Southern Oscillation (ENSO) contributes to the vulnerability of crop production to climate variability in the Pampas region of Argentina. Predictability of regional climate anomalies associated with ENSO may provide opportunities to tailor decisions to expected climate, either to mitigate expected adverse conditions or to take advantage of favorable conditions. Model analysis was used to explore the potential for tailoring land allocation among crops to ENSO phases at the farm scale in two sub-regions of the Pampas. The model identifies as a function of risk preferences and initial wealth the crop mix that maximizes expected utility of wealth at the end of a 1-year decision period based on current costs and prices, and crop yields simulated for each year of historical weather. The model reproduced recent land allocation patterns at the district scale under moderate risk aversion, and predicted increasing diversification with increasing risk aversion. Differences in land allocation among ENSO phases were consistent with known climate response to ENSO, and crop response to water availability. Tailoring land allocation to ENSO phase increased mean net farm income between US$5 and $15 ha⁻¹ year⁻¹ relative to optimizing the crop mixture for all years, depending on location, risk aversion and initial wealth. The relationship between potential value of ENSO information and risk aversion was not monotonic, and differed between locations. Crop mix and information value also varied with crop prices and initial soil moisture. There are potential financial benefits of applying this approach to tailoring decisions to ENSO phases.