REDUCTION IN REVENUE VOLATILITY IN MAIZE PRODUCTION APPLYING THE INDIRECT-INDEX INSURANCE
Keywords:
indirect index insurance, maize, revenue, volatility, family farms.Abstract
This paper is aimed at providing the basic theoretical postulates of indirect-index insurance and by its application at quantifying the effect of the reduction in risk using a stochastic simulation. The paper uses data on maize yield gathered from family farm in the central part of Srem, and weather data were acquired from the nearest referential meteorological station. For the purpose of achieving a stated aim, two situations were analysed: maize production value by using the indirect-index insurance and by using no indirect-index insurance. In the case of applying this type of insurance, a farmer can decrease the risk by 8,816 RSD/ha (r=1.0), 4,116 RSD/ha if the correlation coefficient is 0.8, that is 2,598 RSD/ha (r=0.6). Therefore, it is possible to conclude that there is a significant effect of the reduction in risk by applying indirect-index insurance.
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References
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3. Bertelsmeier, M. (2000): Flächenbezogener Informationsbedarf der landwirtschaftlichen Versicherungswirtschaft in Deutschland. Abschlussarbeit, Humboldt Universität zu Berlin.
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5. Brandes, W., Odening, M. (1992): Investition, Finanzierung und Wachstum in der Landwirtschaft. Ulmer Verlag, Stuttgart.
6. Chambers, R. G., Quiggin, J. (2001): Optimal Producer Behaviour in the Presence of Area-Yield Crop Insurance. American Journal of Agricultural Economics, 84(2), pp. 327.
7. Ebneth, O. J. (2003): Mehrgefahrenversicherung als Risiko-Management-Instrument für die deutsche Landwirtschaft. Masterarbeit, Georg-August-Universität Göttingen, Fakultät für Agrarwissenschaften, Göttingen, pp. 41-42.
8. Hartung, Ј. (2005): Statistik: Lehr- und Handbuch der angewandten Statistik, 15. Auflage, Oldenbourg Wissenschaftsverlag, Oldenbourg.
9. Ivanović, S., Todorović, S., Nastić, L. (2012): Impact of energy prices on income of labour on field crop operations. Economics of Agriculture, Institute of Agricultural Economics Belgrade, vol. 59(2), pp. 195-206.
10.Jain, G., Foster, D. (2000): Come rain, come shine. Energy and Power Risk Management – Weather Risk Special Report, 5(5), pp. 16-17.
11.Marković, T. (2010): Vremenski derivati kao finansijski instrument u osiguranju useva i plodova. Doktorska disertacija, Poljoprivredni fakultet, Novi Sad.
12.Marković, T., Jovanović, M. (2011a): Influence of Rainfall on Wheat and Corn Yield as a Production-Related Basis Risk. Rat Pov/Field Veg Crop Res., vol. 48(1), pp. 207-212.
13.Marković, T., Jovanović, M. (2011b): Rainfall insurance in wheat production with weather derivatives. Economics of Agriculture, Institute of Agricultural Economics Belgrade, vol. 58(2), pp. 179-189.
14.Meyer, N. (2001): Risikomanagement von Wetterrisiken. Diplomarbeit, Universität Karlsruhe.
15.Miranda, M. J. (1991): Area-Yield Crop Insurance Reconsidered. American Journal of Agricultural Economics, vol. 73(2), pp. 242.
16.Mladenović, Z., Petrović, P. (2007): Uvod u ekonometriju, Ekonomski fakultet, Beograd. 17.Schlieper, P. (1997): Ertragsausfallversicherung und Intensität pflanzlicher Produktion. Gabler, Wiesbaden.
18.Schmitz, B. (2007): Wetterderivate als Instrument im Risikomanagement landwirtschaftlicher Betriebe. Doktorarbeit im wissenschaftlichen Studiengang Agrarwissenschaften an der Rheinischen Friedrich-Wilhelms-Universität zu Bonn, Institut für Lebensmittel- und Ressourcenökonomik, Bonn.
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Published
2013-09-30
How to Cite
Marković, T., Ivanović, S., & Todorović, S. (2013). REDUCTION IN REVENUE VOLATILITY IN MAIZE PRODUCTION APPLYING THE INDIRECT-INDEX INSURANCE. Economics of Agriculture, 60(3), 445–454. Retrieved from https://ea.bg.ac.rs/index.php/EA/article/view/439
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