Factors influencing hedging decision: evidence from Brazilian citrus growers

Carrer, Marcelo José; Silveira, Rodrigo Lanna Franco da; Filho, Hildo Meirelles de Souza

doi:10.1111/1467-8489.12282

Cited by 14 publications

(23 citation statements)

References 30 publications

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“…The variables with the greatest impact on insurance use were producer propensity to assume risk and the use of management tools. These findings support the empirical literature regarding the adoption of risk management tools among rural producers (Carrer et al, 2019;Fahad et al, 2018;Salazar et al, 2019;Santeramo, 2018;Silveira et al, 2012;Velandia et al, 2009;Was & Kobus, 2018;Zubor-Nemes et al, 2018).…”

Section: Discussionsupporting

confidence: 86%

“…insurance adoption we assume that economies of scale are present in the purchase of insurance as transaction costs are fixed (Salazar et al, 2019). Finally, we assume that larger farms have greater risk, which leads to the use of more complex risk management instruments (Carrer et al, 2019). Therefore, we hypothesize that Area has a positive effect on the probability of adopting rural insurance (H6).…”

Section: Agriculturalmentioning

confidence: 99%

“…The recent studies have evaluated the determinants of production insurance adoption in various countries, exploring how producer and business characteristics influence a producer's decision to use the risk management tool (Fahad et al, 2018;Hill, Hoddinott & Kumar, 2013;Salazar, Jaime, Pinto & Acuña, 2019;Santeramo, 2018;Velandia, Rejesus, Knight & Sherrick, 2009;Was & Kobus, 2018;Zubor-Nemes, Fogarasi, Molnár & Kemény, 2018). Similar studies have been performed in Brazil, with a focus on price risk management tools (Carrer, Silveira and Souza Filho, 2019;Carrer, Silveira, Souza Filho & Vinholis, 2013;Costa, Castro, Callegario, Andrade & Oliveira, 2015;Cruz, Irwin, Marques, Martines Filho and Bacchi, 2011;Silveira, Cruz & Saes, 2012;Silveira, Maia, Cruz & Saes, 2014) and farm operations management (Carrer, Souza Filho & Batalha, 2017;Vinholis, Souza Filho, Carrer & Chaddad, 2016).…”

Section: Introductionmentioning

confidence: 99%

“…Such producer characteristics (e.g. risk perception and management confidence) have been incorporated into research that investigates the decision-making of producers in different contexts involving, for example, the adoption of technology (Ward & Singh, 2015) and the use of risk management tools (Carrer et al, 2019; Fahad et al, 2018; Silveira et al, 2014).…”

Section: Introductionmentioning

confidence: 99%

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Determinants of agricultural insurance adoption: evidence from farmers in the state of São Paulo, Brazil

Carrer

Silveira

Vinholis

et al. 2020

RAUSP

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Purpose The purpose of this study is to investigate the determinants of agricultural insurance adoption by farmers of the state of São Paulo, Brazil. Design/methodology/approach Primary data from the 2015/2016 crop season was collected from a sample of 175 farmers. Logit econometric models were applied to identify the variables that affect the probability of agricultural insurance adoption. Findings The empirical results show that the education level, access to technical assistance, use of management tools and farm size positively affect the probability of adopting agricultural insurance. In addition, farmers who produce soybean and/or corn are more likely to use insurance. On the other hand, the higher the farmers’ propensity to take risk the lower the likelihood of using insurance. Research limitations/implications The empirical analysis is based on cross-sectional data of a sample of 175 farmers of the state of São Paulo. The use of panel data with a larger sample of farmers, considering a period of years, could provide additional information. Originality/value To the best of the knowledge, this is the first empirical analysis about determinants of agricultural insurance adoption by Brazilian farmers, considering behavioral factors. The findings provide useful insights for policymakers in formulating risk management programs in the Brazilian agricultural markets. A better understanding about the determinants of insurance adoption is also relevant for private companies that sell insurance to farmers. Therefore, the paper may contribute with the diffusion of rural insurance as risk management tool in Brazilian agriculture.

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Section: Discussionsupporting

confidence: 86%

Section: Agriculturalmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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Determinants of agricultural insurance adoption: evidence from farmers in the state of São Paulo, Brazil

Carrer

Silveira

Vinholis

et al. 2020

RAUSP

Self Cite

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“…For a comprehensive review of contract farming, see Bellemare and Novak (2017), Carrer et al . (2019), Bernard et al . (2019), Xia et al .…”

Section: Literature Reviewmentioning

confidence: 99%

Contract farming problems and games under yield uncertainty

Shi

Cao

2020

Aus J Agri & Res Econ

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This study investigates whether a group of independent agricultural producers willingly forms a coalition to jointly cope with yield uncertainty in contract farming. The agricultural producers' cooperative game problem in contract farming is formulated as a two-stage stochastic linear program. Using the strong duality theory of stochastic linear programs, we not only prove that the core of agricultural producers' cooperative game is nonempty but also provide a simple way to compute a profit allocation policy in the core. We establish the convexity of agricultural producers' cooperative game so that the game has population monotonicity, which gives agricultural producers an incentive to expand their current coalition. We then analyze the agricultural producers' cooperative game with a concave cost structure, which may exhibit economies of scale for production. Taking advantage of the proposed stochastic duality approach, the agricultural producers' cooperative game with a concave cost structure is also shown to have a nonempty core.

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