ABSTRACT
Producers have been faced with greater needs for risk protection since the passage of the 1996 FAIR Act. This paper will illustrate how a rainfall option contract might be used as a tool to manage producer risk at cotton harvest. While there are forms of weather options available for non-agricultural purposes, rainfall options for agricultural purposes are not yet widely available. In the event that they do become available, it is hoped that this paper will be a useful guide in determining how they fit into a total risk management package.
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