Abstract
Agricultural and food production is fundamentally different than other forms of production in the economy, and the differences require alternate methods of risk management. This chapter reviews the primary tools available to producers for the management of price and quantity risk, including insurance, government programs, and market-based instruments. Each of these tools is explained in both historical context and for how it impacts on market function. Current controversies in policy and markets and marketing are then discussed, as are recent research findings and proposed solutions. Some of the controversies addressed are the impact of speculation, packer ownership of cattle, and planting restrictions for decoupled payments.
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
References
Chen G, Roberts MC, Thraen CS (2006) Managing Dairy Profit Risk Using Weather Derivatives. J Agr and Resour Econ 31(3):653-666
DeGorter H, Just DR (2009) The Welfare Economics of a Biofuels Tax Credit and the Interaction Effects with Price Contingent Farm Subsidies. Am J of Agr Econ 91(2):477-488
Informa Economics (2010) An Estimate of the Economic Impact of GIPSA’s Proposed Rules. Report prepared for National Meat Association. Memphis, TN
Garcia P, Irwin SH, Smith AD (2011) Futures Market Failure. Proceedings of the NCCC-134 Conference on Applied Commodity Price Analysis, Forecasting, and Market Risk Management
Gorton GB, Rouwenhorst KG (2006) Facts and Fantasies about Commodity Futures. Fin Anal J 62:47-68
Hamilton JD (2009) Causes and Consequences of the Oil Shock of 2007–08. Brookings Papers on Economic Activity 2009.1:215-261
Hertel TW, Beckman J (2010) Commodity Price Volatility in the Biofuel Era: An Examination of the Linkage between Energy and Agricultural Markets. Selected Paper, 2010 AAEA Annual Meeting, Denver, CO
Irwin SH, Garcia P, Good DL, Kunda EL (2009) Poor Convergence Performance of CBOT Corn, Soybean and Wheat Futures Contracts: Causes and Solutions. Marketing and Outlook Research Report 2009-02, Department of Agricultural and Consumer Economics, University of Illinois at Urbana-Champaign
Irwin SH, Sanders DR, Merrin RP (2009) Devil or Angel? The Role of Speculation in the Recent Commodity Price Boom (and Bust) J Agr and Appl Econ 41(2): 377—391
Johnson D, Hoffman L, Krissoff B, Lucier G, Young E, Breneman V (2006) Eliminating Fruit and Vegetable Planting Restrictions: How Would Markets Be Affected? USDA Economic Research Report Number 30
Koontz SR, Lawrence JD (2010) Impacts of Alternative Market Agreement Cattle Procurement on Cattle Costs, Gross Margins, and Profits: Evidence from Plant-Level Profit and Loss Data. Agribus: An International J 26:1-24
Lawrence JD, Schroeder TC, and Hayenga ML (2001) Evolving Producers-Packer-Customer Linkages in the Beef and Pork Industries. Rev of Agr Econ 23:370-385
Masters MW, White AK (2011) The Accidental Hunt Brothers: How Institutional Investors are Driving Up Food and Energy Prices. Accessed 16 January 2011 from http://accidentalhuntbrothers.com
O’Donoghue EJ, Effland AB, Cooper JC, You C (2011) Identifying Overlap in the Farm Safety Net. United States Department of Agriculture Economic Research Service, Economic Information Bulletin 87
Robles M, Torero M, von Braun J (2009) When Speculation Matters. International Food Policy Research Institute Issue Brief 57
Sanders DR, Irwin SH, Merrin RP, (2010) The Adequacy of Speculation in Agricultural Futures Markets: Too Much of a Good Thing? App Econ Persp and Policy 32(1):77-94
Turvey CG (2001) Weather Derivatives for Specific Event Risks in Agriculture. App Econ Persp and Policy 23(2):333-351
Tyner W, Taheripour F (2008) Policy Options for Integrated Energy and Agricultural Markets. App Econ Persp and Policy 30(3):387—396
United States Department of Agriculture (2010) USDA Announces Proposed Rule to Increase Fairness in the Marketing of Livestock and Poultry. USDA News Release 0326.10
Vedenov DV, Barnett BJ (2004) Efficiency of Weather Derivatives as Primary Crop Insurance Instruments. J Agr and Resour Econ 29(3):387-403
Author information
Authors and Affiliations
Corresponding author
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 2013 Springer Science+Business Media New York
About this chapter
Cite this chapter
Roberts, M.C. (2013). The Policy of Risk Management. In: Armbruster, W., Knutson, R. (eds) US Programs Affecting Food and Agricultural Marketing. Natural Resource Management and Policy, vol 38. Springer, New York, NY. https://doi.org/10.1007/978-1-4614-4930-0_15
Download citation
DOI: https://doi.org/10.1007/978-1-4614-4930-0_15
Published:
Publisher Name: Springer, New York, NY
Print ISBN: 978-1-4614-4929-4
Online ISBN: 978-1-4614-4930-0
eBook Packages: Business and EconomicsEconomics and Finance (R0)