Rental arrangements and risk mitigation of crop insurance and marketing

Paulson, Nicholas D.; Schnitkey, Gary; Sherrick, Bruce J.

doi:10.1108/00021461011088512

Cited by 5 publications

(4 citation statements)

References 27 publications

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“…Thus, while farm incomes have reached record levels, the potential for losses and the potential size of those losses have also increased considerably compared to the 1990s and early 2000s. The amount of downside risk protection offered to the tenant in a standard crop share agreement exceeds that which can be obtained under a comparable fixed cash rent agreement even when the tenant operator uses crop insurance (Paulson et al , 2010; Paulson, 2012).…”

Section: Trends In Lease Types and Rental Ratesmentioning

confidence: 99%

Farmland rental markets: trends in contract type, rates, and risk

Paulson

Schnitkey

2013

Agricultural Finance Review

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Purpose -This article aims to explore recent trends in farmland rental markets using data for the state of Illinois. Trends in the types of rental agreements used and the relationship between the rental rate for those contracts, land values, crop revenues, production costs, and farm returns are examined. Design/methodology/approach -Data from various sources and at different levels of aggregation for the state of Illinois are used to provide illustrations of historical trends in farmland rental agreements and rental rates, and how they are related to various market and industry factors. Focus is placed on the more recent period since 2005 characterized by high commodity price levels and volatility. Findings -The majority of farmland in the Midwest is controlled under rental agreements which are increasingly of the fixed cash rent type. Rental rates have increased, but at a slower rate than farm returns. Average rental and interest rates imply that land values are consistent with the current market environment. Aggregate rental rates mask considerable variation in farm-level rents, only a portion of which can be explained by differences in soil productivity. Given the current level of price volatility, the tenure position of a farm operation has a significant effect on downside risk exposure. Originality/value -The illustrations provided in this paper should be of interest to researchers working in the area of farmland values and rental agreements, as well as to practitioners including farmers, landowners, and professional farm managers. The findings should motivate additional research and recognition of the importance of tenure position to the performance and risk exposure of grain farms.

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Section: Trends In Lease Types and Rental Ratesmentioning

confidence: 99%

Farmland rental markets: trends in contract type, rates, and risk

Paulson

Schnitkey

2013

Agricultural Finance Review

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“…Any risk-mitigation tool used by an institution that suffers disaster losses is crucial (Fan and Davlasheridze, 2015). Disasters destroy and reduce business income (Paulson et al , 2010). Thus, MSMEs can buy any type of takaful policies based on their business model.…”

Section: Introductionmentioning

confidence: 99%

Business entrepreneurs’ intention towards takaful participation to mitigate risk: a study in Sri Lanka based on the theory of planned behaviour

Rifas

Rahman

Buang

et al. 2023

JIABR

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Purpose Takaful is a social security approach that guarantees business risks in light of shari’ah, thus playing a crucial role in human life and the economy. The purpose of this study is to examine the factors that influence the behavioural intention of micro, small and medium-sized enterprises (MSMEs) entrepreneurs to participate in takaful in Sri Lanka. Design/methodology/approach This study is designed quantitatively with deductive approach using the theory of planned behaviour. A total of 432 MSMEs in Sri Lanka were surveyed using convenience sampling to measure the intention to participate in takaful as a risk mitigation. The collected data were analysed through partial least square-structural equational modelling. Findings Attitude, subjective norm and perceived behavioural control variables positively influenced the intention, with t-values of 3.216, 3.813 and 3.859, respectively. The influence of these variables exhibits not much difference. Research limitations/implications This study only focuses on MSMEs and a general takaful scheme. Future researchers may consider family takaful involvement among Sri Lankan business entrepreneurs. Practical implications Takaful practitioners should gain from the entrepreneurs’ intention to participate in takaful. Findings from this study could help marketing managers to revamp their strategies to further attract the entrepreneurs and make them to understand risk they are facing and, subsequently, participate in the takaful scheme. Originality/value This paper focuses on the context of Muslim minority among pluralism, where there is no regulation for Islamic financial products and services, and under the Islamic financial market crisis. This unleashes how business owners feel about takaful system on different dimensions.

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“…On the other hand, some agricultural economists have noted the growth in cash leasing (e.g. Sotomayor et al ., ; Paulson et al ., ), but they have not connected this growth with conservation.…”

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confidence: 99%

Conservation Practices and the Growth of US Cash Rent Leases

Allen¹,

Borchers²

2016

J Agricultural Economics

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Over the past 20 years the ratio of cash rent to cropshare land leases across the US has more than doubled. We test different theories that might explain this, and conclude that the shift is mostly the result of revolutionary changes in cultivation practices. The switch from conventional to conservation tillage brought about by changes in herbicide technologies, genetically modified seeds, increased fuel costs, and knowledge of the benefits of soil micro‐organisms, has reduced a tenant‐farmer's ability to exploit a landowner's soil. This removes a major incentive to cropshare and makes cash renting more attractive. Using USDA field‐level data from across the US, we find strong support for this hypothesis, and some evidence that increased corporate structure also influences cash renting. Alternatively, we cannot find evidence that changes in risk, risk‐aversion or insurance coverage explain the growth in cash renting.

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Rental arrangements and risk mitigation of crop insurance and marketing

Cited by 5 publications

References 27 publications

Farmland rental markets: trends in contract type, rates, and risk

Farmland rental markets: trends in contract type, rates, and risk

Business entrepreneurs’ intention towards takaful participation to mitigate risk: a study in Sri Lanka based on the theory of planned behaviour

Conservation Practices and the Growth of US Cash Rent Leases

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