A stochastic simulation model is used to simulate crop revenues net of farm policy and crop insurance costs. Certainty equivalent analysis is used to rank farm policy and crop insurance alternatives for varying levels of risk aversion.

This paper examines the effect of Canadian agricultural business risk management (BRM) programs on farm financial performance. Monte Carlo simulation is used to model stochastic prices and production for a representative Alberta cropping operation. Net present value (NPV) analysis is used to...