Farmer Participation in the Conservation Reserve Program and Bio-fuel Production under Uncertainty and Irreversibility

Crop Production/Industries, Land Economics/Use, Resource /Energy Economics and Policy,

Essays on risk management applications to Appalachian grass -fed beef

The study area of this dissertation is the Appalachian state of West Virginia, where pasture-based livestock has traditionally dominated the state\u27s agricultural production sector. Enhanced production risk has been identified as one of the key risk factors in grass fed beef production. This study aims to look into various risk management options that are available to grass-fed beef producers. One such management option is the various livestock insurance and rangeland, forage and grass land protection policies recently introduced and marketed by the Risk Management Agency (RMA) of USDA. The Livestock Risk Protection Plan (LRP) has been available to West Virginia cattle producers since summer 2006. This plan is uniquely aimed towards price protection. At the same time, two types of rangeland forage and pasture land protection policies have also been introduced by RMA, namely rainfall index and vegetation index based protection policies. These policies may help mitigate production related risk. A brief Internet-based survey was conducted in early summer 2009 of various grass-fed beef producers who market their product electronically in neighboring states including West Virginia, Virginia, Pennsylvania, Kentucky, and Maryland to understand their perception of risk related to grass-fed production. It was found that drought or lack of rainfall is a major concern in their production related activities, an issue that further justified the need for this study. The latter consists of three distinct, but interrelated, essays, all oriented toward a better understanding of the causes, effects, and management of production risk in pasture-beef production settings. Stochastic dominance was the main tool used in the first and second essays to analyze various risky alternatives.;In the first essay, stochastic dominance analysis was used to understand LRP and price risk as may be faced by a grass-fed producer in West Virginia. It was found that in the current scenario, a high basis exists between the AMS 5 market selling price (on which the indemnity payouts are based) and the local cattle auction markets of Virginia and Pennsylvania. Due to this high basis, this LRP may not be suitable to these producers as offered currently.;The second essay deals with production risk and the rainfall index based protection policy of RMA. It was found that though this policy indeed helps to mitigate a certain part of production risk, managers of pastureland should have a thorough understanding of the nature of indemnity payouts. However, this insurance is not yet available in West Virginia. Hence, the study was conducted with Pennsylvania hay trial plots, using data provided by the WVU Agronomy Department.;As discussed earlier, in our e-mail based survey, it was found that drought or lack of rainfall is the major concern for most producers in Appalachia. Accordingly, in the third essay, a unique rainfall/precipitation based option contract was structured to assist businesses better manage rainfall/precipitation related risks. This unique precipitation based call/put option can be exploited by relevant businesses who suffer loss from either too little or too much precipitation. It was further found that there are indeed interested players in the capital market (e.g. Goldman Sachs commodity risk management; Phibro commodities trading firm; etc.) who are willing to underwrite the risk and provide such (rainfall call/put) risk management options to a broad range of businesses including grass-fed producers. This rainfall call/put, when made available through the capital market (underwriter) either as over the counter (OTC) or exchange (CME) traded, would provide yet another weather related risk management option to businesses in West Virginia affected by too much or too little rain fall/precipitation

A Comparison of Traditional and Copula based VaR with Agricultural portfolio

Mean-Variance theory of portfolio construction is still regarded as the main building block of modern portfolio theory. However, many authors have suggested that the mean-variance criterion, conceived by Markowitz (1952), is not optimal for asset allocation, because the investor expected utility function is better proxied by a function that uses higher moments and because returns are distributed in a non-Normal way, being asymmetric and/or leptokurtic, so the mean-variance criterion cannot correctly proxy the expected utility with non-Normal returns. Copulas are a very useful tool to deal with non standard multivariate distribution. Value at Risk (VaR) and Conditional Value at Risk (CVaR) have emerged as a golden measure of risk in recent times. Though almost unutilized so far, as agriculture becomes more industrialized, there will be growing interest in these risk measures. In this paper, we apply a Gaussian copula and Student’s t copula models to create a joint distribution of return of two (Farm Return and S&P 500 Index Return) and three (Farm Return, S&P 500 Index Return and US Treasury Bond Index) asset classes and finally use VaR measures to create the optimal portfolio. The resultant portfolio offers better hedges against losses

Targeting of mannosylated liposome incorporated benzyl derivative of Penicillium nigricans derived compound MT81 to reticuloendothelial systems for the treatment of visceral leishmaniasis

The antileishmanial property of a Benzyl derivative of a new antibiotic MT81 (Bz2MT81), isolated and purified from a fungal strain of Penicillium nigricans NRRL 917 was tested in free, liposome intercalated and mannose coated liposome intercalated forms in vivo against visceral leishmaniasis in hamsters. Mannose grafted liposome intercalated Bz2MT81 eliminated intracellular amastigotes of Leishmania donovani within splenic macrophages more efficiently than the liposome intercalated Bz2MT81 or free Bz2MT81. At a dose equivalent to 7.5 mg/Kg body weight when injected subcutaneously (s.c) in mannose grafted liposome intercalated form for 15 days in an interval of three days, the splenic parasitic load decreased to the extent of 79.1% of the total parasite present in infected control animals. Whereas, an identical amount (7.5 mg/Kg body weight) of Bz2MT81 in free or liposome intercalated form was found less effective in controlling the parasite in spleen (in free Bz2MT81 form, suppression of parasitic load is 49.8% and in liposome intercalated form, it is 55.1%). Both mannosylated liposomes and Bz2MT81 were noted non-toxic to the host peritoneal macrophages. Histological examinations of spleen and liver, kidney function tests (SGPT, alkaline phosphatase, creatinine and urea in blood plasma) showed that the toxicity of Bz2MT81 was reduced up to normal level when mannose grafted liposomal Bz2MT81 were administere