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Risk and Risk Transfer in Agriculture: Facilitating Food Security and Poor Farmer Participation

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Publication date
13/01/2010
Number of Pages
42
Language:
English
Type of Publication:
Studies
Focus Region:
Global
Focus Topic:
Market / Trade
Type of Risk:
Market-related
Policy & institutional
Type of Risk Managment Option:
Risk assessment
Risk reduction/mitigation
Commodity:
Crops
Fisheries & Aquaculture
Livestock
Author
Leander Schneider
Organization
OxFam America

This paper discusses the current food crisis having manifested itself in high prices of most major food crops, posing the risk of serious hardship for consumers, and especially the most vulnerable poor. One perspective suggests that the current situation is the result of the globe running up against the limits of its capacity to supply food. This paper focuses on the second perspective, which does not focus directly on physical or production technology capacity constraints, but instead sees the current crisis at least in part as the product of the risky nature of agricultural production. Viewed from this perspective, the current crisis is a particular manifestation of the tendency of agricultural markets to occasionally produce supply/demand imbalances that can cause pronounced spikes, as well as collapses, in prices.