| The paper considers the benefit to agricultural producers from commodity price insurance that provides in every year, but in advance of the resolution of production and price uncertainty, a minimum price for a fixed or variable portion of production. Under the assumption that producers do not change their long term production and income diversification pattern, the theoretical framework suggested leads to explicit formulas for the benefit from providing this type of insurance. The theoretical framework is implemented for Ghana, using the GLSS data to specify various classes of cocoa producing households, and monthly price data for both domestic and international prices to formulate appropriate models for ascertaining price risks faced by producers.... |
