This paper presents a concept of a system allowing farmers to insure against price risk of inputs and products. The insurance existing in agriculture so far (against hail and drought) did not cover incomes. The basic insurance category, which also takes into account the prices of products and...

Farmers may use financial market instruments to hedge price risks. Moreover, various types of insurance products are on the market to protect against production losses. An insurance that covers losses of both input and output prices was recently introduced in the USA. We develop this concept...