Managing risk in agriculture through hedging and crop insurance: What does a national survey reveal?

Ashok Mishra, Hisham S. El-Osta

Research output: Contribution to journalArticle

16 Citations (Scopus)

Abstract

Crop insurance and hedging are two risk management strategies used by farmers to manage risk. Using a discrete choice model and farm-level data, this study investigates the factors influencing farmers’ use of hedging and crop insurance as risk management strategies. In the case of crop insurance, results indicate that level of education, participation in other risk management strategies (such as renting land, commodity programs, spreading sales over the year), and controlling debt are positively related to a farmer’s decision to purchase crop insurance. For the hedging model, results suggest education, off-farm income, forward contracting sales of crops and livestock, and computer use are positively related to a farmer’s participation in hedging/futures markets.

Original languageEnglish (US)
Pages (from-to)135-148
Number of pages14
JournalAgricultural Finance Review
Volume62
Issue number2
StatePublished - Nov 1 2002
Externally publishedYes

Fingerprint

crop insurance
national surveys
Insurance
Agriculture
risk management
Risk Management
farmers
agriculture
sales
commodity programs
futures trading
Education
leasing
debt
farm income
educational status
Livestock
education
livestock
farms

Keywords

  • Crop insurance
  • Education
  • Hedging
  • Risk management

ASJC Scopus subject areas

  • Finance
  • Economics and Econometrics
  • Agricultural and Biological Sciences (miscellaneous)
  • Strategy and Management

Cite this

Managing risk in agriculture through hedging and crop insurance : What does a national survey reveal? / Mishra, Ashok; El-Osta, Hisham S.

In: Agricultural Finance Review, Vol. 62, No. 2, 01.11.2002, p. 135-148.

Research output: Contribution to journalArticle

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