Dose-response method in the calculation of impacts on profits with irrigated rice production in the micro-region of Formoso do Araguaia in Tocantins, Brazil

Abstract

Current research calculated the impact on the profit of irrigated rice production of the micro-region of Formoso do Araguaia TO Brazil if changes in water availability occurred. An optimist and a pessimist scenarios were simulated, with the variables planted area, selling price, constant price costs. Water availability varied. The variable water availability in the optimist scenario was defined as 1554 tons, whereas it was reduced to 353 tons in the pessimist scenario. Monte Carlo method with 10,000 interactions was employed. After simulation, the optimist scenario revealed a mean profit of R$ 159.6 million and in the pessimist scenario estimated mean profit was approximately R$ 36.1 million. Mean profit decrease was approximately 77%. Simulation results showed that the variable water was not sufficient to explain profit decrease in irrigated rice production of the Formoso do Araguaia region. Other variables had to be used and oscillated within the proposed model. Further studies should be undertaken to verify which variables might affect profit decrease or increase profit by irrigated rice production in the micro-region Formoso do Araguaia, besides water availability.