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Agricultural risks will tend to increase in the future, but risk management instruments and techniques at the disposal of wine companies are relatively limited. This paper aims to present an original risk protection mechanism implemented by the federation of Côte du Rhône (Inter‐Rhône) wine producers to build up a wine stock, or “reserve”, so as to protect their incomes against fluctuation in prices and production.

Using the VaR (value‐at‐risk) methodology, the stock level that will protect producers against a fall in their incomes is determined. More specifically, the probability that a given producer's current income falls lower than a target minimum income must be inferior or equal to a given (small) wine stock level. An agricultural income depends on price and production, so the reserve amount is expressed according to price and production quantity risk (measured by standard deviation), and the correlation between the two. The wine stock reserve is compared with a reserve invested in financial assets.

A static comparative analysis is made using simulations of the two types of reserves (wine stock and financial assets) according to the various explanatory variables. Empirical study makes it possible to calculate reserve amounts for each category of wine managed by Inter‐Rhône. The study reveals a strong disparity in the amount of reserves of each wine.

The reserve system is considered by some to give to the producer federation the power to control supply below the equilibrium level in order to receive monopoly rents. To avoid this occurring the constitution of a mutual fund is recommended. This solution allows producers to profit from diversification gains and greater managerial flexibility.

Since the recent global financial crisis began in 2008–2009, there has been strong decline in financial markets and investment, huge losses and bankruptcies that have led to a major financial downturn, and a significant economic recession for most developed and emerging economies. Some economists and financial analysts now consider this crisis to be more harmful in some ways than the Great Depression of 1929. Those economists and analysts point to a number of technical issues and limitations associated with the present financial systems, monetary institution rules, accounting and rating formulas, and investment strategies and choices. To try to overcome the financial downturn and, at the same time, to protect the banking systems and financial markets and to reassure investors, central banks have attempted various solutions, governments have introduced new plans (e.g., the Paulson plan), policymakers have included these topic in their political programs, and several conferences and political summits have been organized to discuss the issues. There have been two prevailing lines of thought. According to one line of thought, the extreme risk associated with speculation in sophisticated financial products, the nature of the credit-banking economic system, the gap between real and financial economies, and the strategic errors of monetary institutions constitute the main sources of the financial crisis.¹ On the other hand, it is now argued that this trend needs to be altered. According to that view, monetary institutions, banking and trading systems, rating agencies, and asset pricing modeling need to be reassessed (Barnett, 2012).

Since Thomas Kuhn (1962), a historian of science who gave ‘paradigm’ its contemporary meaning, the term ‘paradigm’ has been widely used in science and social sciences to refer to a theoretical framework or thought pattern in any given discipline, or broadly, a set of experiences, beliefs and values that affect individual perceptions of a reality and their subsequent reactions. A dominant paradigm is the widely held system of thought in a society at a particular period of time. For Kuhn, a dominant paradigm can be changed and replaced by a new one, which often occurs in a revolutionary manner in science. In social sciences, ‘paradigm shift’ implies the changing ways of understanding and organising a social reality.