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DESCRIPTION:Jeanette Song\n\nFuqua School of Business\, Duke University\n\n
 Index-Based Yield Protection for Smallholder Farmer\n\nDate: Friday\, Febr
 uary 2\, 2024\n	Time: 10:00 - 11:00 am\n	Location: Bronfman Building\, Room 
 301\n\nPlease contact gina.ceolin [at] mcgill.ca (subject: MSRC%20Inquiry)
   (Gina Ceolin) for more details.\n\nGovernment subsidies are common in th
 e agricultural sector to protect farmers from unexpected losses. Two major
  forms of agricultural subsidies are price protection\, under which farmer
 s are subsidized when the market price is low\, and yield protection\, und
 er which farmers are subsidized when the crop yield is low. While price pr
 otection is popular in both developed and emerging economies\, implementin
 g yield protection in emerging economies is challenging due to the high co
 sts of yield assessment for small farms. This research examines the design
  of a recently emerged index-based yield protection policy\, which trigger
 s subsidies when a pre-determined index\, such as rainfall\, predicts a lo
 w yield\, thereby avoiding costly yield assessment. Our analysis generates
  several intriguing findings. First\, we show that while an increase in in
 dex-based subsidy can increase farmers' expected income\, it can also incr
 ease income variability due to imperfect yield prediction of the index. Ba
 sed on this result\, we uncover a non-monotonic relationship between the a
 ccuracy of the index and the optimal subsidy. Second\, although price and 
 yield protection are often viewed as strategic substitutes since both can 
 incentivize more planting\, we show that they act as strategic complements
  when the index accuracy is low. Finally\, when the government can exert a
  costly effort to improve index accuracy\, contrary to expectations\, we f
 ind that a tighter budget can lead to a higher optimal investment in index
  accuracy. Collectively\, these insights contribute to a more nuanced unde
 rstanding of index-based yield protection policies\, aiding in developing 
 effective agricultural subsidies.\n
DTSTART:20240202T150000Z
DTEND:20240202T160000Z
LOCATION:Room 301\, Bronfman Building\, CA\, QC\, Montreal\, H3A 1G5\, 1001
  rue Sherbrooke Ouest
SUMMARY:Management Science Research Centre (MSRC) Seminar
URL:/desautels/channels/event/management-science-resea
 rch-centre-msrc-seminar-354327
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