Creating a market for price swaps: Case study of an innovative risk management instrument in the Belgian-Dutch pear market

Eewoud Lievens, Kobe Tielens and Erik Mathijs
Additional contact information
Kobe Tielens: Department of Earth and Environmental Sciences, KU Leuven, Leuven, Belgium

Agricultural Economics, 2021, vol. 67, issue 1, 33-40

Abstract: While the benefits of using futures to manage price risk are widely recognised, only certain groups of farmers have suitable futures at their disposal. This paper discusses an innovative instrument, developed in the Belgian-Dutch pear market, that provides an alternative to futures markets by creating a market for price swaps. Thus, the instrument provides some benefits of market-traded derivatives (like futures) while remaining a relatively simple instrument, which requires fewer market transactions. The paper describes key properties of the swap contracts and the platform used to trade them. In addition, it compares the conditions required for establishing price swap markets and futures markets. Thus, our study informs the design of similar risk management instruments for commodities and contexts where futures are absent.

Keywords: collective action; financial derivatives; fruit; risk management (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://agricecon.agriculturejournals.cz/doi/10.17221/373/2020-AGRICECON.html (text/html)
http://agricecon.agriculturejournals.cz/doi/10.17221/373/2020-AGRICECON.pdf (application/pdf)
free of charge

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:caa:jnlage:v:67:y:2021:i:1:id:373-2020-agricecon

DOI: 10.17221/373/2020-AGRICECON

Access Statistics for this article

Agricultural Economics is currently edited by Ing. Zdeňka Náglová, Ph.D.

More articles in Agricultural Economics from Czech Academy of Agricultural Sciences
Bibliographic data for series maintained by Ivo Andrle ().