Do Income Support Programs Impact Producer Hedging Decisions? Evidence from a Cross-Country Comparative
This article provides a unique perspective to why U.S. producers' hedging practices are not consistent with the price-risk management literature. We conduct a formal test of income support program impacts with survey data from South Africa and the United States, which have different producer income support policies. We find that producing in a supported environment (U.S.) decreases hedging for preplanting and preharvest expected yields by 30.39% and 20.03%, respectively. This study raises issues for further inquiry regarding both comparative agricultural lending practices and the relative costs of price-risk management tools. Copyright 2009 Agricultural and Applied Economics Association
Year of publication: |
2009
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Authors: | Woolverton, Andrea E. ; Sykuta, Michael E. |
Published in: |
Review of Agricultural Economics. - Agricultural and Applied Economics Association - AAEA, ISSN 2040-5790. - Vol. 31.2009, 4, p. 834-852
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Publisher: |
Agricultural and Applied Economics Association - AAEA |
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