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Application of forward contract and crop insurance as risk management tools of agriculture: A case study in Bangladesh

Asian Economic and Financial Review, ISSN: 2222-6737, Vol: 8, Issue: 12, Page: 1394-1405
2018
  • 3
    Citations
  • 0
    Usage
  • 41
    Captures
  • 0
    Mentions
  • 0
    Social Media
Metric Options:   Counts1 Year3 Year

Metrics Details

  • Citations
    3
    • Citation Indexes
      3
  • Captures
    41

Article Description

The principal aim of the study is to find out a way to effectively manage the agricultural risks like price volatility, weather risks, and fund shortage. To hedge price volatility, farmers sometimes make contracts with agro-traders but fail to protect themselves effectively due to not having the legal framework for such contracts. The study extensively reviews existing literature and find evidence that the majority studies either deal with price volatility or weather risks. If we could address these risks through a single model, it would be more useful to both the farmers and traders. Intrinsically, the authors endeavor in this regard, and the key contribution of this study lies in it. Initially, we conduct a small survey aspiring to identify the shortcomings of existing contracts. Later, we propose a model encompassing forward and insurance contracts together where the forward contract will be used to hedge price volatility and insurance contract will be used to protect weather risks.

Bibliographic Details

Md. Bokhtiar Hasan; Md. Delowar Hossain; Abu N.M Wahid

Asian Economic and Social Society

Business, Management and Accounting; Social Sciences; Economics, Econometrics and Finance

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