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

Ashok K. Mishra, Hisham S. El-Osta

Research output: Contribution to journalArticlepeer-review

18 Scopus citations

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
DOIs
StatePublished - Nov 1 2002

Keywords

  • Crop insurance
  • Education
  • Hedging
  • Risk management

ASJC Scopus subject areas

  • Agricultural and Biological Sciences (miscellaneous)
  • Economics, Econometrics and Finance (miscellaneous)

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