Financial Tools For Mitigating Price Risk In Agriculture

This project examines how farmers manage agricultural price risk using market-based financial instruments such as forward contracts, futures and options, and price insurances. While these tools can substantially reduce income volatility, drivers of uptake decisions remains misunderstood. This project first analyzes the psychological and behavioral drivers behind farmers’ adoption decisions. Second, it identifies how existing risk management tools can be redesigned to better align with farmers’ preferences. Finally, it evaluates the effects of adoption on farm-level resilience and long-term sustainability. By linking behavioral insights with economic impact assessment, the research aims to inform more effective policy design and financial products that support a more resilient and sustainable agricultural sector.