Each year, ranchers in Colorado and the Mountain West face difficult decisions regarding drought: Should they ration water now at the expense of higher short-term profit? Invest in more cattle? Or scale back and play it safe?
The likelihood of longer, more severe droughts in the coming decades and the difficulty of making long-term decisions with incomplete information only make the calculus harder.
This year, scientists from the Western Water Assessment (WWA), an interdisciplinary research group led by CU Boulder and the National Oceanic and Atmospheric Administration (NOAA), set out to get a better understanding of how ranchers actually use climate information to make crucial choices that could make or break their agricultural futures.
“We wanted to explore these questions through a social science lens,” said Trisha Shrum, a WWA research scientist. “How do ranchers respond to drought? Does a drought one year make them more risk averse the next? How long does it take them to invest again?”
In collaboration with NOAA and CU’s Earth Lab, the researchers created a dynamic decision analysis model and coded it into a computer app. The app takes the form of a “choose your own adventure” game in which players are given a set of conditions (including herd size, acreage and rainfall) and asked to guide their virtual farms through 10 simulated years of unpredictable weather conditions.
The app also considers another powerful factor: insurance. Many ranchers already carry some in the event of catastrophic losses, but in recent years, the U.S. Department of Agriculture has begun piloting a supplemental rainfall insurance program that pays out based on rainfall. In especially dry seasons, ranchers with this coverage would receive a check in the mail.
“That changes the incentives versus normal insurance, so we built that into our model to see if it might have side effects,” Shrum said.
During the game, every player goes without rainfall insurance the first two simulated years. Over the next six years, half of the players (selected at random) are granted rainfall insurance and half go without. Over the final two years, every player gets to decide whether to opt in.
The researchers recruited hundreds of ranchers for an initial test over the summer, with results still pending. By working directly with the people who stand to benefit the most, the scientists hope to create a robust decision analysis database that could eventually help Colorado ranchers make cost-effective choices or invest in adaptations that mitigate their exposure to risk.
“This data could provide an important way to inform policy,” Shrum said. “It could also make ranchers more resilient to drought.”