Advanced Search
MyIDEAS: Login to save this paper or follow this series

Risk Reduction In Corn Production With Weather Put Option

Contents:

Author Info

  • Markovic, Todor
  • Martinovska-Stojcheska, Aleksandra
  • Ivanovic, Sanjin
Registered author(s):

    Abstract

    Since the late 1990s scientists have discussed the use of weather derivatives to hedge weather conditioned yield volatility in the agricultural sector. The hedging efficiency is depending on the contract design (Weather-Index, Strike-Level, Tick-Size). The basis risk consisting of the basis risk of production and the basis geographical risk, however, remain with the farmer. In this paper we quantify the risk reducing effect of rainfall put-options by applying a stochastic simulation. For this simulation we analyzed the yield data we obtained from corn producing farm located in the central part of Srem, Serbia. A nearby weather station contributed the meteorological data.

    Download Info

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
    File URL: http://purl.umn.edu/139496
    Download Restriction: no

    Bibliographic Info

    Paper provided by European Association of Agricultural Economists in its series 132nd Seminar, October 25-27, 2012, Skopje, Republic of Macedonia with number 139496.

    as in new window
    Length:
    Date of creation: 25 Oct 2012
    Date of revision:
    Handle: RePEc:ags:eaa132:139496

    Contact details of provider:
    Email:
    Web page: http://www.eaae.org
    More information through EDIRC

    Related research

    Keywords: Basis risk of production; corn; geographical basis risk; revenue; weather put option; Farm Management;

    This paper has been announced in the following NEP Reports:

    References

    References listed on IDEAS
    Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
    as in new window
    1. Vedenov, Dmitry V. & Barnett, Barry J., 2004. "Efficiency of Weather Derivatives as Primary Crop Insurance Instruments," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 29(03), December.
    2. Musshoff, Oliver & Odening, Martin & Xu, Wei, 2005. "Zur Bewertung von Wetterderivaten als innovative Risikomanagementinstrumente in der Landwirtschaft," German Journal of Agricultural Economics, Humboldt-Universitaet zu Berlin, Department for Agricultural Economics, vol. 54(4).
    Full references (including those not matched with items on IDEAS)

    Citations

    Lists

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    Statistics

    Access and download statistics

    Corrections

    When requesting a correction, please mention this item's handle: RePEc:ags:eaa132:139496. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (AgEcon Search).

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.