Observatorio de I+D+i UPM

Memorias de investigación
Research Publications in journals:
Finding optimal price risk management instruments: The case of Spanish Potato Sector
Year:2007
Research Areas
  • Agricultural policy,
  • Applied economics
Information
Abstract
This article offers a comprehensive analysis of the problem of choosing between alternative market risk management instruments. We model farmers¿ behavior to optimize the certainty equivalent, formulated by a mean¿variance model, by combining instruments with and without basis risk. Results are expressed as the demands for hedging with futures, forward contracts and insurance. Theoretical results are applied to a selection of Spanish producers of fresh potatoes, a sector that is exposed to significant market risks. Amsterdam¿s Euronext provides potato futures prices, and the recently launched revenue insurance in Spain provides the example for price insurance. Three conclusions summarize the article¿s main findings. First, we show that Spanish potato revenue insurance subsidies are a factor that determines the instrument rankings and choice. Second,the efficiency of insurance subsidies is generally low. Finally, the Amsterdam potato futures market does not provide a cost-effective means to manage price risks for Spanish fresh potato growers.
International
Si
JCR
Si
Title
AGR ECON-BLACKWELL
ISBN
0169-5150
Impact factor JCR
0,603
Impact info
Volume
36
Journal number
1
From page
67
To page
78
Month
SIN MES
Ranking
Participants
  • autor: María Bielza-Díaz (JRC - Italia)
  • Autor: Alberto Garrido Colmenero (UPM)
  • Autor: Jose Maria Sumpsi Viñas (UPM)
Research Group, Departaments and Institutes related
  • Creador: Grupo de Investigación: Economía Agraria y Gestión de los Recursos Naturales
  • Departamento: Economía y Ciencias Sociales Agrarias
S2i 2020 Observatorio de investigación @ UPM con la colaboración del Consejo Social UPM
Cofinanciación del MINECO en el marco del Programa INNCIDE 2011 (OTR-2011-0236)
Cofinanciación del MINECO en el marco del Programa INNPACTO (IPT-020000-2010-22)