Search results

1 – 10 of over 5000
To view the access options for this content please click here
Article
Publication date: 3 April 2018

Adam Wąs and Pawel Kobus

The purpose of this paper is to identify the factors that determine demand for crop insurance in Poland.

Abstract

Purpose

The purpose of this paper is to identify the factors that determine demand for crop insurance in Poland.

Design/methodology/approach

To examine the determinants of decisions regarding crop insurance, the authors used logistic regression. The base source of data for the analysis was the 2013 FADN sample. The scale of yield losses, the indemnities received and the Arrow-Pratt risk aversion coefficient were examined in a representative sample of farms in consecutive years in the period 2004-2013.

Findings

Losses are the major determinants of crop insurance uptake. Additionally, it was observed that the economic determinants are in line with the expected utility theory, while contrary to expectations, farmer’s characteristics such as education level, age or even risk aversion did not prove to have any influence on crop insurance uptake.

Research limitations/implications

The FADN sample is representative as regards the type of farming, economic size of farm and location of the farm. Every farm in the sample represents a specific number of similar farms in the population. However, it must be emphasised that the representativeness of the sample with respect to other determinants, e.g., yield losses in previous years, using crop insurance or the farmers’ age and education has not been verified due to lack of data characterizing the general population with regard to these factors.

Practical implications

It could be argued that the system of crop insurance subsidies should be targeted to encourage the farmers who previously had not used insurance to join the system.

Originality/value

The paper presents the analysis of crop insurance uptake in a country with a strongly polarised agriculture. The Polish farm sector consists of 1.4 million farms with sizes ranging from 1 ha to over a few thousands hectares. The research is based on a data set of 5,202 farms which contains data from ten years (2004-2013). The novelty of the methodological approach is that it includes information on the number of farms represented by every farm in the FADN sample in the Horvitz-Thompson estimator in order to achieve results which are valid for the general population of Polish farms.

Details

Agricultural Finance Review, vol. 78 no. 2
Type: Research Article
ISSN: 0002-1466

Keywords

To view the access options for this content please click here
Article
Publication date: 21 November 2016

Krishna Reddy Kakumanu, Palanisami Kuppanan, C.R. Ranganathan, Kumar Shalander and Haileslassie Amare

Changing climate has increasingly become a challenge for smallholder farmers. Identification of technical, institutional and policy interventions as coping and adaptation…

Abstract

Purpose

Changing climate has increasingly become a challenge for smallholder farmers. Identification of technical, institutional and policy interventions as coping and adaptation strategies and exploring risks of their adoption for smallholder farms are the important areas to consider. The aim of the present study was to carry out an in-depth analysis of adaptation strategies followed and the associated risk premium in technology adoption.

Design/methodology/approach

The study was carried out in the dryland systems of three Indian states – Andhra Pradesh, Karnataka and Rajasthan – and was based on a survey of 1,019 households in 2013. The flexible moment-based approach was used for estimating the stochastic production function, which allowed estimation of the relative risk premium that farmers are willing to pay while adopting the technologies to avoid crop production risks.

Findings

In all the three states, the risk premium (INR ha−1) was higher for farm mechanization compared to supplemental irrigation, except in the case of Andhra Pradesh. The higher the level of technology adoption, the higher the risk premium that households have to pay. This can be estimated by the higher investment needed to build infrastructure for farm mechanization and supplemental irrigation in the regions. The key determinants of technology adoption in the context of smallholder farmers were climatic shocks, investment in farm infrastructure, location of the farm, farm size, household health status, level of education, married years, expected profit and livestock ownership.

Originality/value

Quantification of the risk premium in technology adoption and conducting associated awareness programs for farmers and decision-makers are important to strengthen evidence-based adoption decisions in the dryland systems of India.

Details

International Journal of Climate Change Strategies and Management, vol. 8 no. 5
Type: Research Article
ISSN: 1756-8692

Keywords

To view the access options for this content please click here
Article
Publication date: 21 August 2017

Nguyen Thi Lan Huong, Yao Shun Bo and Shah Fahad

This study aims to examine the extent to which farmers are aware of climate change and how they have modified their growing practices in response to perceived climate changes.

Abstract

Purpose

This study aims to examine the extent to which farmers are aware of climate change and how they have modified their growing practices in response to perceived climate changes.

Design/methodology/approach

A logit model was used to explore farmers’ awareness and a binary logistic model was used to analyze their adaptive responses. Data from 335 farm households were collected from three provinces of Northwest Vietnam with different climate change vulnerability.

Findings

Farmers’ awareness of climate change was related significantly to household and farm characteristics. Farm experience, education level, location, tenancy status, soil fertility, access to credit, climate information, agricultural extension services, farmer groups, non-agriculture income, distance to market and house and climate change experience influence adaptation measure choices.

Research limitations/implications

These findings suggest that investment strategies must promote adaptation to climate change by supporting technological and institutional methods, such as education, markets, credit and information.

Originality/value

This study is the first study that uses econometric models to analyze farmers’ perception effect and adaptation to climate change aspect in Northwest Vietnam

Details

International Journal of Climate Change Strategies and Management, vol. 9 no. 4
Type: Research Article
ISSN: 1756-8692

Keywords

To view the access options for this content please click here
Article
Publication date: 8 April 2014

Satit Aditto, Christopher Gan and Gilbert Nartea

The purpose of this paper is to investigate farmers’ risk aversion using the equally likely certainty equivalent approach and the negative exponential utility function to…

Abstract

Purpose

The purpose of this paper is to investigate farmers’ risk aversion using the equally likely certainty equivalent approach and the negative exponential utility function to identify risk preference classification.

Design/methodology/approach

Stochastic efficiency with respect to a function is applied to determine the risk efficient farming systems for the farmers in central and north-east regions of Thailand.

Findings

The study results showed that maize followed by sorghum is the most risk efficient farming system for the extremely risk averse rain-fed farmers in the central region of Thailand. Intensive planting of wet rice and dry rice cultivation is preferred by the extremely risk averse central region irrigated farmers. Wet rice and cassava together with raising small herd of cattle is the most economically viable farming system for the extremely risk averse rain-fed farmers in the north-east region, while two rice crops with raising cattle is preferred by the extremely risk averse north-east irrigated farmers of Thailand.

Originality/value

The findings of this study provide useful information to reinforce the empirical basis for risk analysis for Thai farmers. The results will provide more accurate information regarding risk at the farm level to policy makers and researchers.

Details

International Journal of Social Economics, vol. 41 no. 4
Type: Research Article
ISSN: 0306-8293

Keywords

To view the access options for this content please click here
Article
Publication date: 8 May 2009

William Wilson, Cole Gustafson and Bruce Dahl

Malting barley is an important specialty crop in the Northern Plains and growers mitigate risk with federally subsidized crop insurance and production contracts. The…

Abstract

Purpose

Malting barley is an important specialty crop in the Northern Plains and growers mitigate risk with federally subsidized crop insurance and production contracts. The purpose of this paper is to quantify risks growers face due to “coverage gaps” in crop insurance that result in uncertain indemnity payments when their crop does not meet contract specifications.

Design/methodology/approach

A stochastic dominance model is developed to evaluate alternative strategies for growers with differing risk attitudes and production practices (irrigation vs dryland).

Findings

The results illustrate how alternative crop insurance provisions affect efficient choice sets for growers. Risk premiums for irrigated growers all point to valuations favoring more coverage, contracts, and malting option B. As the crop insurance industry matures in the functions it performs, it will become increasingly more important to address quality attributes.

Originality/value

This paper addresses quality issues and coverage gaps in crop insurance provisions.

Details

Agricultural Finance Review, vol. 69 no. 1
Type: Research Article
ISSN: 0002-1466

Keywords

To view the access options for this content please click here
Article
Publication date: 26 July 2013

Matthias Buchholz and Oliver Musshoff

Increasing environmental concerns have placed the need for an enhanced water resources management on the policy agenda. In this context, a restrictive regulation of water…

Abstract

Purpose

Increasing environmental concerns have placed the need for an enhanced water resources management on the policy agenda. In this context, a restrictive regulation of water withdrawals for irrigation has gained in importance. The purpose of this paper is to investigate how a reduction in water quotas and increased water prices affect risk‐efficient crop choices and the related economic implications for northern German farmers.

Design/methodology/approach

The authors apply a whole‐farm risk programming approach to a typical arable farm in northern Germany. By using irrigation field trials, production activities with varying irrigation intensities and inherently incorporated crop yield uncertainty are defined.

Findings

In contrast to increased water prices, a reduction in water quotas leads to higher water savings and lower economic disadvantages for farmers. Due to an adjusted portfolio crop choice, as well as irrigation intensity, the reduction in the expected total gross margin is partially offset.

Research limitations/implications

This example ensures volumetric water monitoring at the farm level which, however, remains a major pitfall in many other countries. From a methodological perspective, the crop yield distribution choice might affect the findings. Likewise, the consideration of downside risk in an irrigation context appears to be interesting for future research.

Originality/value

This is the first paper to compare the implications of differentiated water quotas and water pricing schemes suggested by the European Water Framework Directive, while taking risk‐efficient crop portfolio considerations into account. This approach facilitates water reallocation not only between crops, but also in terms of the crop‐specific irrigation intensity. Crop yields are based on a unique panel of micro data rather than expert opinions or simulations.

To view the access options for this content please click here
Article
Publication date: 5 February 2018

Cory Walters and Richard Preston

At the beginning of the production year producers face a complex risk management decision environment given by risks specific to their operation, multiple crop insurance…

Abstract

Purpose

At the beginning of the production year producers face a complex risk management decision environment given by risks specific to their operation, multiple crop insurance contracts and hedging opportunities. The purpose of this paper is to provide a producer-level framework for risk management decision making, focusing on the interaction between crop insurance and hedging.

Design/methodology/approach

The authors develop a Monte Carlo simulation model that generates a producer’s net income (NI) distribution that incorporates historical producer risk, price-yield correlation via a copula, price risk, and production costs. The authors evaluate the NI distribution through a modified Modern Portfolio Theory (MPT) decision framework. The authors use the modified MPT decision framework to explore tradeoffs between expected NI and farm ruin (defined as 1 or 5 percent expected shortfall) from different crop insurance contracts and pre-harvest hedging options.

Findings

Only revenue protection and the highest two levels of coverage level exist on the efficient frontier. The level of hedging on the efficient frontier ranges from 0 to 55 percent of Actual Production History. The authors find that increasing coverage level 5 percent (from 80 to 85 percent) negatively impacts the optimal hedging amount by 26 percentage points (from 35 to 9 percent).

Originality/value

The model provides the precise identification of financial benefits from different risk management strategies by incorporating producer-level historical yield data, using a copula to capture yield-price dependency structure and producer production cost in generating the NI distribution. This model can be applied to any producer’s characteristics and data.

Details

Agricultural Finance Review, vol. 78 no. 1
Type: Research Article
ISSN: 0002-1466

Keywords

To view the access options for this content please click here
Article
Publication date: 9 April 2019

Morteza Yazdani, Ernesto D.R.S. Gonzalez and Prasenjit Chatterjee

The implementation of circular economy strategies is one of the central objectives of several governments seeking a transition toward a sustainable development. Circular…

Abstract

Purpose

The implementation of circular economy strategies is one of the central objectives of several governments seeking a transition toward a sustainable development. Circular economy in agriculture deals with the production of agricultural commodities making an efficient use of resources and avoiding unnecessary waste and carbon emission generation. Disruptions in the production and supply of critical agricultural products can have serious negative repercussions for firms and consumers of the food supply chain. In recent decades, disruptions generated by natural disasters such as hurricanes, thunderstorms and floods have greatly impacted social communities and industrial sectors. Supply chain risks approaches are seen to contribute key elements to address the impacts of natural disaster toward the implementation of circular economy in agriculture, helping to prevent collapses in the production and supply of food. The purpose of this paper is to study and identify flood risk drivers and their effects on the sustainability of an agriculture supply chain in connection with a circular economy strategy. By using an extended Step-wise Weight Assessment Ratio Analysis method combined with a multi-criteria decision analysis, the most essential flood drivers with a degree of importance are reported here. Then, the authors propose an Evaluation of Data based on average ASsessment method, to rank different agricultural projects that pretend to mitigate the flood risks and its impacts on crop areas. The application of this research lies within the framework of a real agricultural project founded by the European Commission Scientific Section, called RUC-APS.

Design/methodology/approach

The authors use management science-based tools to address circular economy in agriculture. The authors propose a multi-criteria-based methodology to assess the risks of flooding in crops areas. To validate the proposed methodology, a case example from Spain is discussed to rank different agricultural projects that pretend to mitigate the flood risks and its impacts on crop areas.

Findings

The proposed multi-criteria methodology confirmed a successful application to rank different agricultural projects that pretend to mitigate the flood risks and its impacts on crop areas. Organizations and firms in the agricultural business can use the methodology to identify risks drivers and to detect the best projects to mitigate the highest impacts of flooding risks in crops areas.

Originality/value

The authors use supply chain risks approaches to address the impacts of natural disaster on the implementation of circular economy in agriculture. The authors propose a robust multi-criteria-based methodology to assess the risks of flooding in crops areas and we used to determine the best mitigating projects to face flooding risks on crop areas.

To view the access options for this content please click here
Article
Publication date: 9 November 2010

Nicholas D. Paulson, Gary D. Schnitkey and Bruce J. Sherrick

This study seeks to evaluate the impacts of land rental arrangements on crop insurance and grain marketing decisions.

Abstract

Purpose

This study seeks to evaluate the impacts of land rental arrangements on crop insurance and grain marketing decisions.

Design/methodology/approach

The analysis is conducted in an Illinois corn‐soybean setting in which optimal marketing and crop insurance decisions are estimated for a risk‐averse producer under typical cash rent and share rent agreements using numerical simulation methods.

Findings

Results indicate that the availability of crop insurance impacts the intensity of use of put options under both cash and share rent arrangements. Similar to previous work in this area, revenue insurance is found to cause a substitution away from marketing using put options, while yield insurance is complementary to price risk management alternatives. However, while insurance and marketing play a role under both types of land tenure arrangements, shifting from a cash rent to a share rent agreement provides a relatively greater degree of risk reduction.

Practical implications

The results suggest that additional research is needed to explain trends in land rental contracts. Crop insurance and other federal programs may provide incentives to switch from share leases to cash rent arrangements. Changes to the design of these programs could facilitate risk management for producers more efficiently.

Originality/value

The unique contribution of this study is the comparison of insurance and marketing decisions under both cash rent and share rent agreements for crop land.

Details

Agricultural Finance Review, vol. 70 no. 3
Type: Research Article
ISSN: 0002-1466

Keywords

To view the access options for this content please click here
Article
Publication date: 1 November 2002

Joseph W. Glauber, Keith J. Collins and Peter J. Barry

Since 1980, the principal form of crop loss assistance in the United States has been provided through the Federal Crop Insurance Program. The Federal Crop Insurance Act of…

Abstract

Since 1980, the principal form of crop loss assistance in the United States has been provided through the Federal Crop Insurance Program. The Federal Crop Insurance Act of 1980 was intended to replace disaster programs with a subsidized insurance program that farmers could depend on in the event of crop losses. Crop insurance was seen as preferable to disaster assistance because it was less costly and hence could be provided to more producers, was less likely to encourage moral hazard, and less likely to encourage producers to plant crops on marginal lands. Despite substantial growth in the program, the crop insurance program has failed to replace other disaster programs as the sole form of assistance. Over the past 20 years, producers received an estimated $15 billion in supplemental disaster payments in addition to $22 billion in crop insurance indemnities.

Details

Agricultural Finance Review, vol. 62 no. 2
Type: Research Article
ISSN: 0002-1466

Keywords

1 – 10 of over 5000