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Farmers and farmers’ associations in developing countries and their use of modern financial instruments


  • Lamon Rutten



This paper starts with an overview of the current literature on the cost of price risk exposure to developing country farmers. It then discusses market-based price risk management instruments (such as futures and options) that can be used by farmers, as well as various mechanisms through which farmers' associations can facilitate farmers' access to price risk management tools as well as lower-cost financing (using warehouse receipt finance, repos and other structured financings). The experiences with use of such modern financial tools by farmers in several developing countries (Brazil, Colombia, Guatemala, India, Malaysia, Mexico, Philippines, Uganda) are described. The report concludes with a discussion of the practicalities of farmers' associations starting to use such financial instruments, including the potential of new technologies such as smart cards.

Suggested Citation

  • Lamon Rutten, 2003. "Farmers and farmers’ associations in developing countries and their use of modern financial instruments," Finance 0301001, EconWPA.
  • Handle: RePEc:wpa:wuwpfi:0301001
    Note: Type of Document - pdf; pages: 35; figures: included. pdf file

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    farmers structured finance warehouse receipts price risk management;

    JEL classification:

    • Q14 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Finance
    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General

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