1887

n Agrekon - Weather derivatives : concept and application for their use in South Africa

Volume 43, Issue 4
  • ISSN : 0303-1853
  • E-ISSN: 2078-0400
  • Author J.M. Geyser
  • Source : Agrekon, Volume 43, Issue 4, Dec 2004, p. 444 - 464
  • Accreditation : Arts and Humanities Citation Index (Web of Science (WoS) Core Collection)
    The International Bibliography of Social Sciences (IBSS)
This article is unavailable for purchase outside of Africa

 

Abstract

Recent innovations in energy markets suggest the possibility of addressing agricultural risk factors by issuing derivatives on weather elements. Such instruments appear particularly attractive, as asymmetric information and loss adjustment issues do not affect them. This article first describes the concept, functioning and application of weather derivatives. It then examines the feasibility of rainfall derivatives to manage agricultural production risk in South Africa by evaluating the merits of rainfall options, and suggesting an option strategy, as a yield risk management tool. The use of rainfall derivatives in South Africa is likely to increase in future as capital markets, financial institutions, insurance companies, crop insurance companies and hedge funds collectively organize themselves to share and distribute weather risks.

Loading full text...

Full text loading...

Loading

Article metrics loading...

/content/agrekon/43/4/EJC18288
2004-12-01
2019-10-22

This is a required field
Please enter a valid email address
Approval was a Success
Invalid data
An Error Occurred
Approval was partially successful, following selected items could not be processed due to error