Coffee is the major export crop in Honduras, but the export price is relatively low. This paper investigates the potential role for a coffee price insurance product - based on the use of the coffee future market - to increasing producer welfare by reducing coffee price risk faced by individual farmers. By constructing a typology of six different types of coffee farmers and developing a forecasting model, the authors show that more risk-averse farmers would prefer to buy the insurance contract than those with lower risk aversion. The subjective assessments analysis also show that Honduran coffee producers have optimistic expectations for coffee prices and appear to underestimate the variability of coffee prices.
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Paper provided by American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association) in its series 2004 Annual meeting, August 1-4, Denver, CO with number
20347.
Length: Date of creation: 2004 Date of revision: Handle: RePEc:ags:aaea04:20347
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