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Climate variability and agricultural production in argentina: the role of risk-transfer mechanisms

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  • Marcos Gallacher

    (Universidad del CEMA)

  • Daniel Lema

    (Universidad del CEMA; Instituto de Economía, INTA)

  • Laura Gastaldi

    (EEA Rafaela, INTA)

  • Alejandro Galetto

    (Universidad Austral, Rosario; UTN Facultad Regional Rafaela)

Abstract

Research related to climate variability is particularly important in the current conditions faced by Argentine agriculture. These include (a) increased specialization in soybeans, with resulting reduced possibilities of risk-reduction through «portfolio» effects, (b) increased importance of crop production in argentine agriculture, (c) macroeconomic instability resulting in severe contraction and increased interest rates of credit and (d) upward trend in input use and per-acre production costs with consequent increase in break-even crop yields. This paper summarizes recent research related to production variability in Argentine agriculture, as well as the consequences of this variability on efficiency and resource allocation and presents an overview of strategies for coping with adverse climate events. We estimate willingness to pay (WTP) of agricultural producers for index-type insurance mechanisms, and outline the requirements for the development of a risk-transfer market for agricultural producers.

Suggested Citation

  • Marcos Gallacher & Daniel Lema & Laura Gastaldi & Alejandro Galetto, 2016. "Climate variability and agricultural production in argentina: the role of risk-transfer mechanisms," Ensayos de Política Económica, Departamento de Investigación Francisco Valsecchi, Facultad de Ciencias Económicas, Pontificia Universidad Católica Argentina., vol. 2(4), pages 11-38, Octubre.
    • Handle: RePEc:atw:epecon:v:2:y:2016:i:4:p:11-38
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    References listed on IDEAS

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    More about this item

    Keywords

    weather-based index insurance; crop production; demand for insurance; Argentina;
    All these keywords.

    JEL classification:

    • Q14 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Finance
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy; Animal Welfare Policy
    • G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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