POTENTIAL ECONOMIC BENEFITS OF ADJUSTING COTTON DRYLAND PRACTICES BASED ON SEASONAL RAINFALL EXPECTATIONS Naveen Musunuru, Eduardo Segarra, S.J. Mass, and R.E. McDonald Texas Tech University Lubbock, TX W.L. Harman Blackland Research and Extension Center Temple, TX Abstract Cotton (Gossypium hirsutum L.) is a major rainfed field crop grown in the semiarid regions of the Texas High Plains. Fre- quent droughts along with high climatic variability account for the low cotton yields obtained in this region. Cropping prac- tices that might be used to take advantage of seasonal rainfall conditions include crop choice, planting density, planting date and fertilization practices. At present very little or no information is available to encourage High Plains dryland cotton farm- ers to modify cropping practices to take advantage of weather information in good years or reduce losses in poor years. CroPMan simulation model was used to evaluate the economic benefits of using alternative management practices for dry- land cotton. The potential economic benefits of tailoring dryland cotton production practices to seasonal rainfall expectations was found to be from $17 to $21 million per year for the Texas High Plains. Results from this study reveal that dryland cot- ton farmers could benefit from modifying cropping practices based on seasonal rainfall expectations. Introduction Climate variability in terms of temperature or precipitation anomalies brings uncertainty to agriculture and often results in decreased revenues through lost production. El Niño/ Southern Oscillation (ENSO) phenomenon is considered to be the main source for interannual climate variability in many parts of the world (Baethgen, 1998). ENSO brings changes in sea surface temperatures and creates unusual weather events like excessively wet or hot dry conditions on earth surface. As a conse- quence, positive rainfall anomalies prevail in El Niño years, and negative rainfall anomalies exist in La Niña years. For gen- eral understanding on ENSO mechanism and its effects, the readers are encouraged to refer the works of McCreary and Anderson (1991), and Cane (2000). The influence of ENSO phenomenon on crop yields and the subsequent economic impact on US farmers is well documented in the economic literature (Chen et al., 2002; Jochec et al., 2001; Mjelde and Penson, 2000; Jones et al., 2000; Hill et al., 2000,1999; Solow et al., 1998; and Mjelde et al., 1997). Progress in understanding the ocean atmosphere interactions and technological advances played a vital role in making sea- sonal (3 month) climate forecasts a reality (Hunt and Hirst 2000; and Nicholls et al., 2000). Seasonal Climate Outlook from Climate Prediction Center and International Research Institute for Climate Prediction regularly offers updates and discussion on seasonal forecast information. Climate information of expected seasonal rainfall (normal, below or above normal rainfall season) can help in managing intraseasonal crop management and reduces the vulnerability to climate risks (Russel, 1991). If the forecast for the next season reveal a possible drought, then the best possible way to reduce losses is to decrease an input use and increase the cost savings. Thus, climate information can support farmers in reducing risk by allowing them to alter their production strategies by taking advantage of opportunities in good years and reduce losses in poor years (Arthur, 2001). Realizing these opportunities, however, is not straightforward and thorough examination of dryland cropping practices need to be analyzed for assessing potential economic benefits. Hence the objectives of this paper are to (i) select the appropriate cotton management practices (planting dates, plant densities and fertilization quantities) that can enhance the profitabil- ity/reduce losses under conditions of climate change, and (ii) identify the potential value of adjusting management of High Plains cotton to seasonal rainfall expectations Study Area Importance Dryland agriculture is a major enterprise for the High Plains of Texas. The Texas High Plains is classified as a semiarid area with an annual rainfall of 450 mm and evapotranspiration ratio of less than 0.25. The uncertainty related with weather vari- ability is a big challenge for farmers and millions of dollars are lost annually in this region due to temperature and moisture stress effects (Middleton et al., 1996). Droughts lasting six months occur more frequently in West Texas, while longer droughts are found most often in the Northern part of Texas (TWRI). Out of 18.48 million acres of land devoted to field crops in Texas, twelve million acres are rainfed. Of these 12 million acres, 4.8 million acres are located in the High Plains of Texas. Cotton is one of the primary dryland crops in this area with an average yield of 260 pounds/acre. This yield level represents less than half of its irrigated counterpart yield of 653 pounds/acre (TASS, 2001). Hockley County, the largest dry- land cotton-producing county in 2001 for the Texas High Plains area was purposefully selected for analyzing the potential economic benefits of adjusting cotton management practices to seasonal rainfall expectations.