BIOECONOMIC MODEL FOR DECISION-MAKING ON STAYING IN BUSINESS FOR COLOMBIAN OIL PALM CROPS ATTACKED BY LETHAL WILT

Abstract

In addition to bud rot, lethal wilt (LW) can also be considered as one of the most challenging diseases for the Colombian oil palm agro-industry. In fact, in December 2020, 7693 ha out of 560 000 ha planted with oil palm trees in Colombia were eliminated due to LW. This study provides an economic model intended to help growers deciding the moment at which oil palm business ceases to being profitable due to LW epidemic breakthrough. The developed model ultimately proposes an interaction between the incidence of LW disease and, the expected net cash flow for oil palm operations. Its purpose is to determine when the disease incidence is so high that revenue is not attained. This model allows for testing different alternatives of disease control, such as planting LW resistant cultivars, as opposed to planting susceptible cultivars, which is the case presented here. Results indicate that if one has planted LW susceptible cultivars and the LW attack occurs before the 10 th year of the crop, the decision should be to exit business. On the other hand, if there are cultivars with some degree of resistance to LW, then LW may attack in any year and although the profitability of the business decreases, it is possible to coexist with the LW. This model resulted in a powerful tool for growers to consider their choice on cultivars when planning an oil palm plantation in Colombia.