In this paper we price a precipitation option based on empirical weather data from Germany using different pricing methods, among them Burn Analysis, Index Value Simulation and Daily Simulation. For that purpose we develop a daily precipitation model. Moreover, a decorrelation analysis is...

We analyse area yield insurance contracts and weather index insurance contracts in terms of risk reduction for wheat farms in Kazakhstan over the period 1980-2002. We combine the common mean-variance approach with a stochastic dominance approach to ensure the consistency of the empirical results...

Recent academic discussion regarding crop insurance in developing and transition countries has focused on weather index insurance. But empirical analyses of such schemes based on farm level data cannot be found in the literature, though this insurance type shows clear advantages compared to...

This paper analyzed Chinese small-scale farmer's response to agricultural risks by using MOTAD model. Based on the household's data from the two villages Wangjia and Damao in Zhejiang province, we established "representative rural household" for each of the sampling villages. The results show...

Recent and presumable future developments tend to increase the risk associated with farming activities. This causes an increasing importance of risk management. Farmers have a wide variety of possibilities to influence the risk exposure of their operations. Among them are the choice of the...

Weather constitutes the major source for production risk in agriculture. Weather index can be used construct crop insurance that demand less information and can avoid moral hazard and adverse selection problems. Based on mean-variance model, theoretical results on the optimal insurance coverage...

Fieldwork for this paper was conducted under the Pastoral Risk Management (PARIMA) project of the Global Livestock Collaborative Research Support Program (GL CRSP), funded by the Office of Agriculture and Food Security, Global Bureau, USAID, under grant number DAN-1328-G-00-0046-00, and analysis...

Under the Mac Sharry and Agenda 2000 reforms, direct payments comprised a significant portion of farmers' income in the EU. Farmers had to engage in production to receive these payments but the payments were relatively risk-free and therefore risk may not have played an important role in the...

Smallholder cattle farming is an important livelihood strategy in most developing countries like Kenya. However, tropical diseases in Africa often wipe out these valuable assets. This paper focuses on mitigation of cattle disease risks through a hypothetical insurance scheme. The study is based...

Insuring against crop yield risk is an important task in rural microfinance because such an insurance may improve access to capital for smallholders by substituting for collaterals. However, agricultural crop yield risk is even hard to mitigate in developed countries due to problems of...