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A Note on Price Risks in Swiss Crop Production – Empirical Results and Comparisons with other Countries

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  • Robert Finger

    (Wageningen University, Agricultural Economics and Rural Policy Group)

  • Nadja El Benni

    (ETH Zuerich, Agri-food & Agri-environmental Economics Group)

Abstract

The liberalization of Swiss agricultural markets will not only decrease crop price levels but is also expected to increase the volatility of prices. Even though these potential increases in price volatilities for Swiss producers are acknowledged as an important fact, no empirical estimates are available yet. To fill this gap, we estimate absolute and relative crop price volatilities of wheat, barley, maize, triticale, potato, rapeseed, and sugar beet applying autoregressive models using annual price data for the period 1991 – 2009. The results for Switzerland are compared with estimates for the USA, Germany, France, and the Netherlands. Relative price volatilities, expressed by the coefficient of variation, are found to be lower in Switzerland by a factor of 2 – 3 compared to the other considered countries. For some crops such as potatoes the differences are even higher. An increase in price volatilities of this magnitude due to market liberalization may become a threat to Swiss farmers. Thus, anticipatory actions of policy makers and producers with regard to the development of price risk management strategies might worth to be considered.

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Bibliographic Info

Article provided by Swiss Society for Agricultural Economics and Rural Sociology in its journal Yearbook of Socioeconomics in Agriculture.

Volume (Year): 5 (2012)
Issue (Month): 1 ()
Pages: 131-151

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Handle: RePEc:cha:ysa001:v:5:y:2012:i:1:p:131-151

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Web page: http://www.agrarsoziologie.ch
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Related research

Keywords: crop price volatility; time series analysis; agricultural markets; Switzerland;

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References

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  2. George Rapsomanikis & Alexander Sarris, 2008. "Market Integration and Uncertainty: The Impact of Domestic and International Commodity Price Variability on Rural Household Income and Welfare in Ghana and Peru," Journal of Development Studies, Taylor & Francis Journals, vol. 44(9), pages 1354-1381.
  3. Bokusheva, Raushan & Finger, Robert & Fischler, Martin & Berlin, Robert & Marin, Yuri & Perez, Francisco Jose & Paiz, Francisco, 2012. "Factors Determining the Adoption and Impact of a Postharvest Storage Technology," 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil 125138, International Association of Agricultural Economists.
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