IDEAS home Printed from https://ideas.repec.org/a/cha/ysa001/v5y2012i1p131-151.html
   My bibliography  Save this article

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

Author

Listed:
  • 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.

Suggested Citation

  • Robert Finger & Nadja El Benni, 2012. "A Note on Price Risks in Swiss Crop Production – Empirical Results and Comparisons with other Countries," Journal of Socio-Economics in Agriculture (Until 2015: Yearbook of Socioeconomics in Agriculture), Swiss Society for Agricultural Economics and Rural Sociology, vol. 5(1), pages 131-151.
  • Handle: RePEc:cha:ysa001:v:5:y:2012:i:1:p:131-151
    as

    Download full text from publisher

    File URL: http://archive.jsagr.org/v5/YSA2012_Finger.pdf
    Download Restriction: no

    References listed on IDEAS

    as
    1. Harwood, Joy L. & Heifner, Richard G. & Coble, Keith H. & Perry, Janet E. & Somwaru, Agapi, 1999. "Managing Risk in Farming: Concepts, Research, and Analysis," Agricultural Economics Reports 34081, United States Department of Agriculture, Economic Research Service.
    2. Nadja El Benni & Robert Finger, 2014. "Where is the risk? Price, yield and cost risk in Swiss crop production," Review of Agricultural and Environmental Studies - Revue d'Etudes en Agriculture et Environnement, INRA Department of Economics, vol. 95(3), pages 299-326.
    3. Moschini, Giancarlo & Hennessy, David A., 2001. "Uncertainty, risk aversion, and risk management for agricultural producers," Handbook of Agricultural Economics,in: B. L. Gardner & G. C. Rausser (ed.), Handbook of Agricultural Economics, edition 1, volume 1, chapter 2, pages 88-153 Elsevier.
    4. Olivier Mahul & Brian D. Wright, 2003. "Designing Optimal Crop Revenue Insurance," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 85(3), pages 580-589.
    5. 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.
    6. Artavia, Marco & Deppermann, Andre & Filler, Gunther & Grethe, Harald & Haeger, Astrid & Kirschke, Dieter & Odening, Martin, 2010. "Ertrags- Und Preisinstabilität Auf Agrarmärkten In Deutschland Und Der Eu," 50st Annual Conference, Braunschweig, Germany, September 29-October 1, 2010 93956, German Association of Agricultural Economists (GEWISOLA).
    7. Nganje, William E. & Stoltman, Gwen, 2000. "Price Variability And Financial Risk For Sugar Beet Growers," 2000 Annual Meeting, June 29-July 1, 2000, Vancouver, British Columbia 36493, Western Agricultural Economics Association.
    8. Poulton, Colin & Kydd, Jonathan & Wiggins, Steve & Dorward, Andrew, 2006. "State intervention for food price stabilisation in Africa: Can it work?," Food Policy, Elsevier, vol. 31(4), pages 342-356, August.
    9. Carlo Cafiero & Fabian Capitanio & Antonio Cioffi & Adele Coppola, 2007. "Risk and Crisis Management in the Reformed European Agricultural Policy," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 55(4), pages 419-441, December.
    10. 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.
    11. Lehmann, Niklaus & Finger, Robert, 2012. "Optimizing whole-farm management considering price and climate risks," 123rd Seminar, February 23-24, 2012, Dublin, Ireland 122533, European Association of Agricultural Economists.
    12. Sarris, Alexander H., 2000. "Has world cereal market instability increased?," Food Policy, Elsevier, vol. 25(3), pages 337-350, June.
    13. Robert Finger & Niklaus Lehmann, 2012. "The influence of direct payments on farmers’ hail insurance decisions," Agricultural Economics, International Association of Agricultural Economists, vol. 43(3), pages 343-354, May.
    14. Robert Finger, 2010. "Revisiting the Evaluation of Robust Regression Techniques for Crop Yield Data Detrending," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 92(1), pages 205-211.
    15. Anton, Jesus & Kimura, Shingo, 2009. "Farm Level Analysis of Risk, and Risk Management Strategies and Policies: Evidence from German Crop Farms," 2009 Conference, August 16-22, 2009, Beijing, China 51729, International Association of Agricultural Economists.
    16. Briner, Simon & Finger, Robert, 2012. "Bio-economic modelling of decisions under yield and price risk for suckler cow farms," 123rd Seminar, February 23-24, 2012, Dublin, Ireland 122547, European Association of Agricultural Economists.
    17. Calm G. Turvey, 1992. "An Economic Analysis of Alternative Farm Revenue Insurance Policies," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 40(3), pages 403-426, November.
    18. Meuwissen, Miranda P.M. & Van Asseldonk, Marcel A.P.M. & Pietola, Kyosti & Hardaker, J. Brian & Huirne, Ruud B.M., 2011. "Income insurance as a risk management tool after 2013 CAP reforms?," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 114649, European Association of Agricultural Economists.
    19. María Bielza & Alberto Garrido & José M. Sumpsi, 2007. "Feasibility of a cash forward contract: An application to the French and Spanish potato sectors," Agribusiness, John Wiley & Sons, Ltd., vol. 23(2), pages 245-261.
    20. Oliver Musshoff & Norbert Hirschauer, 2009. "Optimizing Production Decisions Using a Hybrid Simulation-Genetic Algorithm Approach," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 57(1), pages 35-54, March.
    21. Elam, Emmett W., 1992. "Cash Forward Contracting Versus Hedging Of Fed Cattle, And The Impact Of Cash Contracting On Cash Prices," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 17(01), July.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

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

    JEL classification:

    • Q1 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture
    • E3 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cha:ysa001:v:5:y:2012:i:1:p:131-151. 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: (Simon Briner). General contact details of provider: http://jsagr.org .

    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 CitEc recognized a reference but did not link an item in RePEc 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 RePEc Author Service 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.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.