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PRODUCERS’ BEHAVIOR TOWARDS CLIMATE AND PRICE RISKS: THE CASE OF POULTRY IN NORTHERN MINDANAO, PHILIPPINES Raquel M. Balanay (Ph.D.) Caraga State University, Philippines Harold Glenn A. Valera International Rice Research Institute, Philippines ABSTRACT The study investigates the presence of climate and price risks in the poultry industry of Northern Mindanao, Philippines, specifically the effects of these risks on producers’ behavior. The empirical analysis uses autoregressive conditionally heteroscedastic (ARCH) approach in determining the significance of risks due to volatile price and climate oscillation with the use of monthly price data and monthly rainfall and mean temperature data from 1994-2011. Error-corrected supply response model was used to determine producers’ behavior towards the said risks as represented by expected variance values in the model for policy interventions towards strengthening industry competitiveness and adaptive capacity. Over the period of 1994-2011, the significance of risks due to price volatility and unpredictable changes in rainfall and mean temperature was detected in the poultry industry of Northern Mindanao in the Philippines. This indicates that poultry producers and consumers would have some difficulty in making decisions for their benefit. Among these risks, the risk due to changes in climatic parameters (rainfall and mean temperature) is found to be stronger than the risk due to changes in prices. Poultry producers have the possibility to develop risk aversion due to unpredictable climatic condition, particularly in the production of dressed chicken and chicken eggs. Science and technology-based interventions to include efficient decision-support systems for economic and climate monitoring, genetic upgrading to improve poultry breeds, production insurance, product processing and efficient storage and post-production systems are recommended to enable the poultry industry to sustain its economic benefits and competitiveness. |