Policies on Managing Risk in Agricultural Markets

Over the past dozen years, policymakers have largely abandoned long-standing popular approaches for addressing risk in agriculture without fully resolving the question of how best to manage the negative consequences of volatile agricultural markets...

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Bibliographic Details
Main Authors:	Larson, Donald F., Anderson, Jock R., Varangis, Panos
Format:	Journal Article
Language:	English en_US
Published:	World Bank 2013
Subjects:	ADVERSE EFFECTS ADVERSE SELECTION AGGREGATE DEMAND AGRICULTURAL COMMODITIES AGRICULTURAL ECONOMICS AGRICULTURAL INSURANCE AGRICULTURAL SHOCKS ASYMMETRIC INFORMATION AVERAGE PRICE BANKRUPTCY BENEFICIARIES BENEFICIARY BOND BONDS BORROWING CAPITAL MARKETS CENTRAL BANKS CERTIFICATE OF DEPOSIT CLIMATE COMMERCIAL INSURANCE COMMODITY COMMODITY EXPORTS COMMODITY MARKETS COMMODITY PRICE COMMODITY PRICES COMMODITY RISK MANAGEMENT CONSUMPTION SMOOTHING CONTRACT DESIGN CONTRACT DESIGNS CONTRACT ENFORCEMENT CREDIT ASSOCIATIONS CREDIT MARKETS CREDIT SYSTEMS CRISES CROP INSURANCE CROP LOSSES CURRENCY DEBT MANAGEMENT DEFAULTS DEPOSITS DEVELOPING COUNTRIES DEVELOPING COUNTRY DEVELOPING ECONOMIES DEVELOPMENT ECONOMICS DEVELOPMENT FINANCE DEVELOPMENT INSTITUTIONS DISASTER INSURANCE DOMESTIC BANK DOMESTIC CREDIT DOMESTIC MARKET DOMESTIC MARKETS DOMESTIC PRICES DROUGHT INSURANCE ECONOMIC ACTIVITY ECONOMIC ANALYSIS ECONOMIC DEVELOPMENT ECONOMIC GROWTH ECONOMIC SYSTEMS ECONOMICS EFFICIENT MARKETS EMPLOYMENT ENFORCEMENT MECHANISMS EXCHANGE RATE EXCHANGE RATES EXPENDITURES EXPORTERS EXTERNAL DEBT EXTERNAL SHOCKS FARMING HOUSEHOLDS FEASIBILITY FINANCIAL INSTITUTIONS FINANCIAL INSTRUMENTS FINANCIAL MARKETS FINANCING FACILITY FIXED COSTS FORWARD MARKETS FUTURES FUTURES MARKET FUTURES MARKETS GOVERNMENT DEBT GOVERNMENT FINANCING GOVERNMENT INTERVENTION GOVERNMENT POLICIES GOVERNMENT REVENUES GOVERNMENT SUBSIDIES GROSS DOMESTIC PRODUCT HEDGE RATIO HOLDING HUMAN CAPITAL ILLIQUID MARKETS IMPORTS INCOME INCOME SHOCKS INCOME VOLATILITY INCOMPLETE MARKETS INDEMNITY PAYMENT INDEMNITY PAYMENTS INFLATION INSTRUMENT INSURANCE ARRANGEMENTS INSURANCE CONTRACT INSURANCE CONTRACTS INSURANCE INSTRUMENTS INSURANCE MARKETS INSURANCE MECHANISMS INSURANCE POLICIES INSURANCE PRODUCT INSURANCE SCHEME INSURANCE SCHEMES INSURANCE SYSTEMS INTERNATIONAL BANK INTERNATIONAL DEVELOPMENT INTERNATIONAL FINANCE INTERNATIONAL MARKETS INTERNATIONAL TRADING INVENTORIES INVENTORY INVENTORY COLLATERAL INVESTING ISLAND ECONOMIES JOBS LABOR MARKETS LABOR SUPPLY LAND REFORM LIEN LINES OF CREDIT LIQUIDITY LIVESTOCK INSURANCE LIVING STANDARDS LOAN LOCAL CURRENCIES LOCAL ECONOMY LOCAL GOVERNMENTS MACROECONOMIC INSTABILITY MACROECONOMIC POLICY MACROECONOMIC STABILIZATION MARKET ECONOMY MARKET INSTRUMENTS MARKET REFORM MARKET REFORMS MARKET VOLATILITY MINIMUM PRICE MONETARY FUND MONITORING COSTS MONOPOLIES MORAL HAZARD MULTILATERAL LENDERS MULTIPLE PERIL CROP INSURANCE MUTUAL INSURANCE NATIONAL INCOME NATURAL DISASTER NATURAL DISASTERS OPEN ECONOMIES OPTIMAL CONTRACT OPTIONS MARKETS OUTPUTS PARTIAL GUARANTEES PERFORMANCE RISKS PERMANENT INCOME HYPOTHESIS POLITICAL ECONOMY PORTFOLIO PORTFOLIOS PRICE INDEX PRICE INSURANCE PRICE MOVEMENTS PRICE POLICIES PRICE RISK PRICE RISKS PRICE STABILITY PRICE UNCERTAINTY PRICE VOLATILITY PRIMARY MARKETS PRIVATE INVESTMENT PRIVATE INVESTORS PROPERTY RIGHTS PUBLIC INVESTMENTS RELATIVE PRICES REMITTANCES RESERVES RESOURCE ALLOCATION RESOURCE ECONOMICS RETIREMENT RETURN RISK AVERSION RISK EXPOSURE RISK MANAGEMENT RISK MANAGEMENT STRATEGIES RISK MANAGEMENT TOOL RISK MARKETS RISK SHARING RURAL CREDIT RURAL CREDIT MARKET RURAL FINANCE RURAL FINANCE INSTITUTIONS SAFETY SAFETY NET SAFETY NETS SAVINGS SETTLEMENT SEVERE WEATHER SEVERE WEATHER EVENTS SHORT-TERM INSTRUMENTS SMALL BUSINESSES SOCIAL CONFLICT SOCIAL DEVELOPMENT STATE ENTERPRISES STOCKS SUBSISTENCE FARMERS SUPPLY SIDE TRANSACTION TRANSACTION COSTS TRANSITION ECONOMIES TREATIES WAREHOUSE WAREHOUSE RECEIPT WAREHOUSE RECEIPT SYSTEMS WAREHOUSE RECEIPTS WAREHOUSES WEATHER DERIVATIVES WEATHER INSURANCE
Online Access:	http://documents.worldbank.org/curated/en/2004/09/17559751/policies-managing-risk-agricultural-markets http://hdl.handle.net/10986/16411

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Summary:	Over the past dozen years, policymakers have largely abandoned long-standing popular approaches for addressing risk in agriculture without fully resolving the question of how best to manage the negative consequences of volatile agricultural markets. The article reviews the transition from past policies and describes current approaches that distinguish between the trade-related fiscal consequences of commodity market volatility and the consequences of price and production risks for vulnerable rural households and communities. Current policies rely more heavily on markets, even though markets for risk are incomplete in numerous ways. The benefits and limitations of market-based instruments are examined in the context of risk management strategies, and innovative approaches to extend the reach of risk markets are discussed.

Policies on Managing Risk in Agricultural Markets

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