FINANCIAL BENEFITS OF USING CLIMATE FORECASTING: A CASE STUDY

While seasonal climate forecasts can potentially assist decisions in the sugar industry, there has been a lack of studies of the extent of their benefits. In a case study to quantify the benefits of using climate forecasts, data were derived by a focus group of farmers and millers from the Herbert region. Two scenarios were considered for the timing and management of a harvest season using climate forecasts: (1) the hypothetical case of having a perfect forecast before the calamitous 1998 season in time to mitigate the impact of adverse conditions, to calculate an indicative value for the potential maximum amount of benefits, and (2) the use of forecasts to an extent that reflects stakeholders’ perceptions of the dependability of probabilistic climate forecasting. These scenarios were compared to the situation where decisions are made without considering climate forecasts. Region-wide benefits of a perfect forecast would have been approximately $19 m. Estimated benefits of the probabilistic seasonal climate forecasts amount to $1.7 m for the Herbert region.