Developing Area-Triggered Whole-Farm Margin-based Safety Nets

• Author / Creator

  Iskander, Abram

• The objective of this project was to consider the feasibility of possible alternatives to the current Agri-Stability program. These alternatives consist of customizable area-based whole-farm program where payments are based on a regional trigger. Problems, associated with designing a simple index, based on revenues across relevant commodities in a region, are considered and alternative strategies to implement the alterative program are developed. The analysis is both conceptual and backed up with stochastic simulations that test alternative approaches and consider trade-offs. Results show that there is a relatively high false negative probability of payouts due to spatial, design, other covariate, and idiosyncratic basis risks. The persistence of basis risk means that the uptake of an area-triggered program will be limited. Reducing basis risk will improve uptake, but this requires addressing design risk and spatial basis risk.

• Subjects / Keywords

  • area based farm support

• Graduation date

  Spring 2022

• Type of Item

  Thesis

• Degree

  Master of Science

• DOI

  https://doi.org/10.7939/r3-yk3s-2997

• License

  This thesis is made available by the University of Alberta Libraries with permission of the copyright owner solely for non-commercial purposes. This thesis, or any portion thereof, may not otherwise be copied or reproduced without the written consent of the copyright owner, except to the extent permitted by Canadian copyright law.