University of Wisconsin Center for Cooperatives
Journal of Cooperatives

Title A Portfolio Approach to Cooperative Price Risk Management
Author(s) Ole Gjolberg and Marie Steen
Series Volume 14
Issue Date 1999
Abstract Agricultural producers face significant price risk. For some products, farmers may hedge this risk in well-functioning futures markets. For several pruducts, however, no such risk management instrument is readily available. We suggest that farmers reduce price risk by organizing cooperatives where members diversify by creating "accounting" portfolios. The approach is illustrated with data from the Dutch flower market, and some practical problems connected to such a cooperative risk pooling in agriculture are addressed.

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