Some considerations regarding weather and natural disasters risk management in agriculture sector

Authors

  • Mirela Matei, PhD Petroleum-Gas University of Ploieşti, Faculty of Economic Sciences, Ploieşti
  • Ioan Done, PhD Petroleum-Gas University of Ploieşti, Faculty of Economic Sciences, Ploieşti

Keywords:

weather, natural disaster, agriculture, risk, management

Abstract

The literature offers multiple examples regarding the failure of traditional insurance schemes to provide affordable and comprehensible crop insurance (Vedenov, Barnett, 2004). For this reason, in that paper, we have analyzed the development of new financial instruments that permit the securitization of weather and catastrophe risk and erase the limitations of traditional insurance products. The weather derivatives and cat-linked securities are new instruments that determine the transfer of weather and natural disasters risk to a country to international capital market. The interest of individual and institutional investors for these securities is high because of the low correlation with other financial instruments. The development of weather risk market is important for farmers and companies from developing countries but also for investors from developed countries that can diversificate their portfolios.

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References

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2. Panos Varangis, Jerry Skeed, Barry Barnett, 2002, Weather indexes and developing countries, in the book Climate risk and weather market, Haymarket House, London, http://www.globalagrisk.com/pubs/2002%20Weather%20Indexes%20for%20Developing%20Countries,%20Varangis,%20Skees,%20and%20Barnett.pdf
3. Dimitry V. Vedenov and Barry J. Barnett, 2004, Effciency of Weather, Derivatives as Primary Crop Insurance Instruments, Journal of Agricultural and Resource Economics 29(3):387-403 http://ageconsearch.umn.edu/bitstream/30916/1/29030387.pdf
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Published

2010-12-03

How to Cite

Matei, M., & Done, I. (2010). Some considerations regarding weather and natural disasters risk management in agriculture sector. Ekonomika Poljoprivrede, 57(Spec.num.2), 201–207. Retrieved from https://ea.bg.ac.rs/index.php/EA/article/view/992

Issue

Vol. 57 No. Spec.num.2 (2010): EA 57 Special number 2 Book 1

Section

I SECTION