Enabling Productive but   Asset-Poor Farmers to Succeed : A Risk Financing Framework

Gurenko, Eugene; Mahul, Olivier

Enabling Productive but Asset-Poor Farmers to Succeed : A Risk Financing Framework

2004

Gurenko, Eugene | Mahul, Olivier

This paper examines how market-based risk financing instruments could enable asset-poor but productive farmers exposed to production shocks to engage in riskier but higher-return agricultural activities. The financing of these exogenous shocks is addressed in a conceptual framework based on an optimal allocation of capital where the farm is viewed as a business unit. The approach allows for (1) testing the business viability of a specified crop by assessing the minimum business capital required to ensure the continuity of the business after the occurrence of an adverse production shock; and (2) designing an optimal risk financing program to finance the minimum capital requirements using a combination of instruments (insurance, savings, and borrowing). The authors provide numerical and graphical examples to illustrate the relevance of this financial approach to the specific issues of agricultural risk management.

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Mots clés AGROVOC

agricultural economics agricultural insurance agricultural production agriculture bananas credit crop insurance crop rotation crop yield crops debt deforestation disasters economic consequences fao farm income farmer farmers farming farms feasibility studies fertilizers government intervention herbicides income insurance interest rates liquid assets liquidity pollution poverty production costs productivity profitability risk management risk transfer savings social safety nets transaction costs value added

Informations bibliographiques

Editeur

World Bank, Washington, D.C.

D'autres materias

Wealth; Financial structure; Catastrophic risks; Producers; Catastrophe coverage; Price risk; Profit margin; Commodity; Average yields; Contractual savings; Insurers; Cdf; Agricultural management; Exchange rates; Food & agriculture organisation actuarial science; Financial sector; Crop yields; Moral hazard; Cocoa; Interest rate; Reserves; Capital markets; Farm; Agricultural activities; Capital requirements; Financial instruments; Insurance products; Insurance premiums; Market risk; Programs; Marginal productivity; Government subsidies; Operating losses; Analytical approach; Financial risk; Agricultural business; Insurability; Adverse selection; Crop; Catastrophes; Reinsurance; Risk management policies; Expected return; Coverage; Financial performance; Poor farmers; Insurance companies; Insurance markets; Systemic risk; Conceptual framework

Licence

Policy Research Working Paper;No.3211http://creativecommons.org/licenses/by/3.0/World BankCC BY 3.0 Unported

Source

Policy Research Working Paper;No.3211

Sur AGRIS depuis: 2014-09-15

Format: AGRIS AP

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Cette notice bibliographique a été fournie par World Bank

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Liens

http://hdl.handle.net/10986/14743

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Enabling Productive but Asset-Poor Farmers to Succeed : A Risk Financing Framework

2004

Mots clés AGROVOC

Informations bibliographiques