Income Risk Management in Agriculture [electronic resource] /
Organisation for Economic Co-operation and Development.
Organisation for Economic Co-operation and DevelopmentContent Provider
Organisation for Economic Co operation and DevelopmentContent Provider
OECD Workshop on Income Risk Management(2000 :Paris, France),author.
Paris : OECD Publishing,
2000.
Various risks affect the income and the welfare of farm households. A large number of strategies are available to deal specifically with income risk. They exist against a general background of widespread government intervention that modifies the risks faced by farmers. In the context of agricultural policy reform, a challenge for policy makers is to better define the role of public policy versus market-based mechanisms to deal with income risk in agriculture. The OECD workshop examined the various strategies used by farm households, in particular those attracting renewed interest such as diversification of income sources, vertical co-ordination, hedging on futures markets, insurance coverage and public safety-nets. It allowed participants from Member countries’ governments and private industries to share their experience. One of the main conclusions was that farmers, as managers, have the primary responsibility for risk management and that the optimal mix of tools and instruments depends on specific conditions. Government intervention in risk management, coming as a response to an identified market failure, should be in line with general reform principles shared by OECD Ministers for Agriculture, which include increasing the market orientation of agriculture and addressing legitimate domestic interests in ways that do not distort production and trade.
""FOREWORD""; ""ACKNOWLEDGEMENTS""; ""TABLE OF CONTENTS""; ""AGENDA OF THE WORKSHOP AND LIST OF SPEAKERS Paris, France, 15-16 May 2000""; ""Monday, 15 May""; ""Opening statement""; ""Session 1. Overview""; ""Session 2. Transfer of risk along the food chain""; ""Session 3. Reduction of risk using futures markets""; ""Tuesday, 16 May""; ""Session 4. From risk pooling to safety-nets""; ""A. Insurance systems""; ""B. Agricultural, fiscal and social safety nets""; ""Session 5. Policy implications and recommendations""; ""SUMMARY AND CONCLUSIONS""
""Part I. APPROACHES TO INCOME RISK MANAGEMENT IN OECD COUNTRIES""""OVERVIEW OF FARM HOUSEHOLDS STRATEGIES AND GOVERNMENT INTERVENTION""; ""Introduction""; ""Types of risk""; ""Risk management process""; ""Box 1.  Definition of terms""; ""Policy issues""; ""Objectives""; ""Income risk management strategies at the farm household level""; ""Identification, analysis and assessment of risk""; ""Financial mechanisms: capital and debt management""; ""Figure 1.  Percentage share of property income in total income of farm households""
""Figure 2.  Percentage share of debts in total assets in EU Member countries, 1995""""Table 1.  Share of debts in total assets, by farm size""; ""Diversification of income sources""; ""Diversification of productions/varieties""; ""Diversification of non-farm income sources""; ""Figure 3.  Percentage share of farm income in total income of farm households""; ""Production techniques""; ""Figure 4.  Percentage share of irrigated land in total land area (A) and crop and permanent crop area (B)""; ""Marketing techniques""; ""Spreading sales""; ""Pooling of risk""
""Supply management (public or private)""""Transfer of risk along the food chain""; ""Table 2.  Percentage share of US farm production coordinated by vertical integration""; ""Table 3.  Percentage share of the value of selected commodities produced under production contracts in the United States, ""; ""Table 4.  Percentage share of the value of selected commodities produced under marketing contracts in the United States, ...""; ""Box 2.  Transfer of risk along the food chain""; ""Market risk management: Futures markets""
""Table 5.  Main exchanges trading commodity futures contracts and options""""Box 3.  Reduction of risk using futures markets""; ""Insurance (risk pooling)""; ""Farm householdsâ€? use of government programmes in income risk management""; ""Government intervention in income risk management strategies used by farmers""; ""Why does government intervene in risk management?""; ""Where and how does government intervene to modify risk to farmers?""; ""Figure 5.  Evolution of the structure of support to producers""; ""General economic and regulatory function""; ""Agricultural policy""
""Figure 6.  Producer Support Estimates as a percentage of the total value of agricultural production, 1997-99""
Papers presented at the OECD Workshop on Income Risk Management held in Paris on May 15-16, 2000.
Includes bibliographical references.
Various risks affect the income and the welfare of farm households. A large number of strategies are available to deal specifically with income risk. They exist against a general background of widespread government intervention that modifies the risks faced by farmers. In the context of agricultural policy reform, a challenge for policy makers is to better define the role of public policy versus market-based mechanisms to deal with income risk in agriculture. The OECD workshop examined the various strategies used by farm households, in particular those attracting renewed interest such as diversification of income sources, vertical co-ordination, hedging on futures markets, insurance coverage and public safety-nets. It allowed participants from Member countries’ governments and private industries to share their experience. One of the main conclusions was that farmers, as managers, have the primary responsibility for risk management and that the optimal mix of tools and instruments depends on specific conditions. Government intervention in risk management, coming as a response to an identified market failure, should be in line with general reform principles shared by OECD Ministers for Agriculture, which include increasing the market orientation of agriculture and addressing legitimate domestic interests in ways that do not distort production and trade.
Agriculture
Agriculture
Farm income
Farm risks
Agricultural insurance
Agriculture and state