| Laotian rice producers in upland areas experience highly fluctuating yields and production and producers in wet season rice areas in the southern region face high price risk. This paper examines the exposure to risk of producers in both regions facing changes in water supplies. A supply and demand model of rice in Laos, considering water supply changes, is developed and stochastic elements are added to the model to represent uncertainty in climatic variables. Furthermore, the risks associated with price and production fluctuation are evaluated by using the differences between market and certainty equivalent prices. The results show that the coefficient of variation of production is higher in upland rice than wet and dry season rice, i.e., 0.3226, and if... |
