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Farm Risk Management Between Normal Business Risk and Climatic/Market Shocks

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  • Cordier, Jean

Abstract

Farm risk management for income stabilization is on-going issue. An applied work has been performed to measure farm risk using a stochastic model. Risk management tools, with symmetric as well as asymmetric impacts, are then tested and compared through ad hoc statistics. Normal farm business risk can be efficiently managed using a precautionary saving provision. Farm revenue insurance is found as the most efficient asymmetric tool for dealing with climatic and market shocks. The linkage between these complementary tools can be adjusted upon market environment.

Suggested Citation

  • Cordier, Jean, 2008. "Farm Risk Management Between Normal Business Risk and Climatic/Market Shocks," 108th Seminar, February 8-9, 2008, Warsaw, Poland 48105, European Association of Agricultural Economists.
    • Handle: RePEc:ags:eaa108:48105
    DOI: 10.22004/ag.econ.48105
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    References listed on IDEAS

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    1. Gollier, Christian, 2007. "The Determinants of the Insurance Demand by Firms," IDEI Working Papers 468, Institut d'Économie Industrielle (IDEI), Toulouse.
    2. 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.
    3. Anderson, Ronald W & Danthine, Jean-Pierre, 1980. "Hedging and Joint Production: Theory and Illustrations," Journal of Finance, American Finance Association, vol. 35(2), pages 487-498, May.
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