Factors Affecting Farmers' Utilization of Agricultural Risk Management Tools: The Case of Crop Insurance, Forward Contracting, and Spreading Sales

Velandia, Margarita; Rejesus, Roderick M.; Knight, Thomas O.; Sherrick, Bruce J.

doi:10.1017/s1074070800002583

Cited by 199 publications

(171 citation statements)

References 15 publications

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“…This model was similarly applied to analyse the determinants affecting the choice of household adaptation strategies to deal with extreme events (Francisco et al 2011), factors affecting farmers' choice of agricultural risk-management tools (Velandia et al 2009), and crop choices (Kurukulasuriya et al 2006;Deressa et al 2009).…”

Section: Social Capital and Choice Of Adaptation Measures By Farmersmentioning

confidence: 99%

Can Social Capital influence Smallholder Farmers’ Climate-Change Adaptation Decisions? Evidence from Three Semi-Arid Communities in Burkina Faso, West Africa

2018

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This study examines the influence of farmers' social capital on their decisions to deal with climate change and climate variability in Burkina Faso. The study is based on a household survey conducted among 450 households, randomly selected from three communities in Burkina Faso. Two indexes were constructed to capture farmers' structural and cognitive social capital; and using generalized Poisson regression (GPR) and a multivariate probit model, the study probes the effect of farmers' social capital on their choice of adaptation alternatives, the number of adaptation practices used, and the extent to which adaptation measures were applied. The results indicated that the effect of social capital depends on the type of indicator used and on the type of adaptation strategies necessary. Farmers' cognitive social capital was significantly and positively related to their choice of soil and water conservation techniques (SWCT), and techniques such as agroforestry and irrigation. Structural social capital, on the other hand, was positively associated with the adoption of new varieties and conservation tillage strategies and negatively associated with the use of a crop-diversification strategy. The results also highlighted that socio-economic, institutional and agro-ecological variables determine farmers' decisions to adapt to climate change.

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Section: Social Capital and Choice Of Adaptation Measures By Farmersmentioning

confidence: 99%

Can Social Capital influence Smallholder Farmers’ Climate-Change Adaptation Decisions? Evidence from Three Semi-Arid Communities in Burkina Faso, West Africa

2018

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“…However, grower beliefs regarding the four climate change statements are likely related (e.g., producers who believe that climate change has been scientifically proven would also probably tend to believe that human activities are causing climate change), implying correlation among producer responses. Ignoring this correlation and separately estimating equation (1) for each climate change perception, question j can lead to biased estimates and incorrect standard errors (Kiefer, 1982;Velandia et al, 2009).…”

Section: Producer Characteristics and Climate Change Perceptions: Estmentioning

confidence: 99%

U.S. Agricultural Producer Perceptions of Climate Change

Rejesus

Mutuc-Hensley

Mitchell

et al. 2013

J. Agric. Appl. Econ.

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This study examines U.S. crop producers' perceptions of climate change, its effects on crop agriculture, and likely ways farmers would adapt to weather extremes. Based on a survey of crop producers in four states, we find that a significant proportion of farmers do not perceive that climate change has been scientifically proven and do not believe that it will adversely affect average crop yields and yield variability. Farmers are likely to diversify crops, buy crop insurance, modify lease arrangements, and exit farming in response to extreme weather caused by climate change.

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“…For example, income, wealth, age, off-farm income, and the debt-to-asset ratio are often used as proxies for risk aversion (Huffman and Just, 2004;Mishra and El-Osta, 2002;Allen and Lueck, 1999;Lajili et al, 1997;Smith and Baquet, 1996), while education and experience are commonly used proxies for risk-aversion (Velandia et al, 2009;Sherrick et al, 2004) and farm-level productivity (Lockheed et al, 1980). Succinctly, the problem with estimating (3) by means of standard methods (e.g., OLS) is that the coefficients are biased if agents endogenously match with activities and/or principals.…”

Section: Methodology and Datamentioning

confidence: 99%

An Empirical Analysis of the Determinants of Marketing Contract Structures for Corn and Soybeans

Paulson¹,

Katchova²,

Lence³

2010

Journal of Agricultural &Amp; Food Industrial Organization

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Contracts serve as coordination mechanisms which allocate value, risk, and decision rights across buyers and sellers. The use of marketing contracts in agriculture, specifically for crop production, has been increasing over the past decade. This study investigates the determinants of agricultural marketing contract design employing data from the USDA's Agricultural Resource Management Survey. Models are estimated to analyze the association between producer and contractor characteristics, the decision to produce under contract, and the types of contract structures observed in practice, while controlling for the potential for endogenous matching between contracting parties. Results indicate that while certain producer characteristics are significantly associated with the decision to produce corn or soybeans under contract, there is no significant association between those characteristics and specific contract attributes. AbstractContracts serve as coordination mechanisms which allocate value, risk, and decision rights across buyers and sellers. The use of marketing contracts in agriculture, specifically for crop production, has been increasing over the past decade. This study investigates the determinants of agricultural marketing contract design employing data from the USDA's Agricultural Resource Management Survey. Models are estimated to analyze the association between producer and contractor characteristics, the decision to produce under contract, and the types of contract structures observed in practice, while controlling for the potential for endogenous matching between contracting parties. Results indicate that while certain producer characteristics are significantly associated with the decision to produce corn or soybeans under contract, there is no significant association between those characteristics and specific contract attributes.

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Factors Affecting Farmers' Utilization of Agricultural Risk Management Tools: The Case of Crop Insurance, Forward Contracting, and Spreading Sales

Cited by 199 publications

References 15 publications

Can Social Capital influence Smallholder Farmers’ Climate-Change Adaptation Decisions? Evidence from Three Semi-Arid Communities in Burkina Faso, West Africa

Can Social Capital influence Smallholder Farmers’ Climate-Change Adaptation Decisions? Evidence from Three Semi-Arid Communities in Burkina Faso, West Africa

U.S. Agricultural Producer Perceptions of Climate Change

An Empirical Analysis of the Determinants of Marketing Contract Structures for Corn and Soybeans

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