The 2002 Farm Bill altered the peanut program. Peanut producers have indicated interest in a New Generation Shelling Cooperative (NGSC). This study simulates inherent risks and potential risk management strategies for a NGSC. These strategies are ranked using various metrics to understand their...

Index crop insurance products can eliminate the asymmetric information problem inherent in farm-level multiple peril crop insurance. Purchasers of index insurance products are, however, exposed to basis risk. This study examines the feasibility of various index insurance products for corn farms...

This article makes an initial attempt to design catastrophe (CAT) bond products for agriculture and examines the potential of these instruments as mechanisms for transferring agricultural risks from insurance companies to investors/speculators in the global capital market. The case of Georgia...

Risk management strategies (market and insurance based) are evaluated for selected small grain producers in the Pacific Northwest using expected utility maximization. Equivalent variation (EV) compares alternative risk management portfolios to cash sales under specified restrictions and...

This paper investigates the relationship between weather events and agricultural risks. Specific event risks are defined by outcomes related to a specific event such as low temperature and rainfall. Using Ontario data this paper describes specific events and shows how these specific events can...

Index crop insurance products can eliminate the asymmetric information problem inherent in farm-level multiple peril crop insurance. Purchasers of index insurance products are, however, exposed to basis risk. This study evaluates the efficiency of various index insurance products to reduce farm...

The theoretical foundation for risk pooling in insurance has heavily depend on the independence assumption of losses, which is severely violated in crop insurance. A weaker condition, asymptotic nonpositive correlation can also lead to risk pooling and is satisfied by yield losses. Therefore,...

The customizable area whole farm insurance (CAWFI) was designed and compared with no insurance program and currently available whole farm insurance based on farm level yield (CFWFI). The CAWFI yields higher certainty equivalents over no insurance program, but lower to CFWFI; CAWFI has fairly...

Economists who deal with time-series data usually take the unit root test as the ‘prerequisite’ test for a Brownian motion. It is typical for any researchers to apply a battery of well-known unit root tests to their models to confirm stationarity in the model specification. Nonetheless,...

Rankings of different risk management portfolios including Average Crop Revenue Election (ACRE), traditional government payment programs, crop insurance and hedging in futures; and optimal choices of insurance coverage levels and hedge ratios are evaluated for a representative central Indiana...