Theme and Background
It is well known that weather is an important production factor in agriculture. Unfortunately, this production factor can hardly be controlled. In fact, weather risks are a major source of uncertainty in agriculture. This issue is not only important for farm managers but also for policy makers, since income stabilization in agriculture is frequently considered as a governmental task.
The purpose of the seminar is to discuss the state of the art in the area of analysis and management of weather-related risks in agriculture. Weather risk is a traditional theme in agricultural economics, but it seems promising to have a new look at it. On the one hand due to global climate changes the volatility of weather and the occurrence of extreme weather events increases. This leads to destabilization of farm incomes in particular in developing countries. In the EU a reduction of production risk is likewise desirable since price volatility is expected to increase due to recent policy reforms. On the other hand with the emergence of international weather markets new opportunities arise to handle these risks. The understanding of weather markets, the traded instruments and their relation to traditional weather insurance is a challenging task for agricultural economists from a theoretical as well as from an applied perspective. Thus, the principal objectives of the seminar will be: to quantify the impact of weather on agricultural production and the agribusiness, to analyze available instruments that allow reducing or sharing weather-related risks, to assess the demand and supply on weather markets, to explore risk management strategies of the farm level, to define the role of governments in risk sharing, to enhance the theory of risk management and to exchange practical experiences with the different types of weather insurance.