Infrequent Shocks and Rating Revenue Insurance: A Contingent Claims Approach

Revenue insurance represents an important new risk management tool for agricultural producers. While there are many farm-level products, Group Risk Income Protection (GRIP) is an area-based alternative. Insurers set premium rates for GRIP on the assumption of a continuous revenue distribution, but discrete events may cause the actual value of insurance to differ by a significant amount. This study develops a contingent claims approach to determining the error inherent in ignoring these infrequent events in rating GRIP insurance. An empirical example from the California grape industry demonstrates the significance of this error and suggests an alternative method of determining revenue insurance premiums.Black-Scholes, contingent claim, grapes, insurance, jump-diffusion, option pricing, Risk and Uncertainty,

Post Merger Performance of Agricultural Cooperatives

Agricultural cooperatives are participating in mergers, acquisitions, strategic alliances, and joint ventures at a record pace. While post-post merger performance has been examined extensively for investor owned firms, this has not been the case for agricultural cooperatives since these firms do not have an explicit profit motive nor publicly traded stock. Results from a three-stage econometric model reveal that a major motivation for cooperatives to engage in these activities is to circumvent unique capital constraints, thus resulting in improved profitability. Furthermore, the decision to merge and financial performance are jointly endogenous, with profitability positively influenced and sales growth negatively influenced by the likelihood of merger.acquisitions, capital constraints, cooperatives, financial performance, joint ventures, mergers, probit modeling, strategic alliances, Agribusiness,

Cooperative Mergers and Acquisitions: The Role of Capital Constraints

Several explanations for merger activity exist for publicly traded firms, but none consider the unique aspects of cooperatives. This study develops a test for the hypothesis that cooperative consolidation occurs primarily in response to capital constraints associated with a lack of access to external equity capital. An empirical model estimates the shadow value of long-term investment capital within a multinomial logit model of transaction choice in a panel data set of the 100 largest U.S. cooperatives. The results substantially confirm the capital-constraint hypothesis. Thus, the primary implication is that internal growth may be a more viable alternative to consolidation if new forms of cooperative financing are developed.capital structure, cooperative, discrete choice, joint ventures, mergers, multinomial logit, strategic alliances, Agribusiness,

Cooperative Risk Management: Rationale and Effectiveness

Agricultural cooperatives tend to be riskier than investor-oriented firms, both in a business and financial sense. However, cooperative managers are often reluctant to actively manage risk. Although the risk management irrelevance proposition suggests that cooperative managers should be unable to add shareholder value through risk management activities, this study argues that there are several reasons why this is not likely to be the case for cooperatives. Several empirical examples are provided through numerical simulation of pro-forma financial statements from representative agricultural cooperatives. Using mean variance, expected utility and value-at-risk metrics, the results of these simulations show that various risk management strategies can improve the risk-return profile of a typical cooperative. Keywords: cooperative, expected utility, futures, option, risk management, value at risk.cooperative, expected utility, futures, option, risk management, value at risk., Risk and Uncertainty,

The Impact of Treatment of Organic Manures on Future Soil Carbon Sequestration Under Different Tillage Systems in Pakistan

Funds provided by Higher Education Commission (HEC) of Pakistan for carrying out this Ph.D. research work under “Indigenous 5000 Fellowship Program” and “International Research Support Initiative Program” are highly acknowledged.Peer reviewedPublisher PD

AGRICULTURAL COOPERATIVES AND RISK MANAGEMENT:IMPACT ON FINANCIAL PERFORMANCE

Agricultural cooperatives, like all agribusinesses, operate in an inherently risky environment. Many risk management tools exist, but agricultural cooperatives have been slow to adopt sophisticated risk management practices. Using simulation methods, this paper presents insight into how both traditional and innovative risk management practices effect the distribution of key financial variables for agricultural cooperatives.Agribusiness,

The impact of military culture on the embedding of continuous improvement methodologies within the New Zealand Army : a thesis presented in partial fulfilment of the requirements for the degree of Master of Quality Systems at Massey University, Manawatu, New Zealand

This thesis explores the impact of military culture on the ability for the New Zealand Army to successfully embed continuous improvement methodologies; namely Lean Six Sigma, and whether NZ Army Culture is supportive of the methodology. Current literature discusses both culture and the ability for organisations to change, and this is used as the basis for informing this research. Although the military is representative of the culture from where its members are selected, Military organisations themselves represent a specific occupational culture which is relatively isolated from society. It is this difference that makes the military an interesting organisation to study, and the research will examine whether the traditional norms of military service, the beliefs, ideals and regulations, impact the NZ Army’s ability to successfully grow a culture of continuous improvement. A mixed methods research is used to analyse the relationship between Military Culture, and the New Zealand Army’s effectiveness in embedding continuous improvement, with a five part questionnaire/survey being the selected data gathering method. The survey gathers specific information on; • the training and experience of respondents with Continuous Improvement, and • the cultural environment that exists in the NZ Army and how this impacts on continuous improvement. I draw on the findings of the survey and the literature to answer four questions about NZ Army Culture and their journey with continuous improvement, the results of which will be of value to both the NZ Army and academics who are interested in the impact that culture has on making change within organisations such as Military forces

RISK MANAGEMENT TECHNIQUES FOR AGRICULTURAL COOPERATIVES: AN EMPIRICAL EVALUATION

While not ignoring risk, agricultural cooperatives tend to accommodate risk through the holding of internal capital reserves rather than engage in active risk management. A lack of information regarding the risk, returns, and the effect on cooperative financial performance of both traditional and innovative risk management strategies is likely a constraint to the adoption of active risk management by cooperatives. In this research, we examine the influence of alternative risk management strategies on cooperative financial performance, namely the return on assets (ROA) of grain merchandising cooperatives of various sizes. Strategies include traditional exchange traded futures and options strategies, an over-the-counter revenue swap, throughput insurance, and combinations of price and throughput strategies. Each of these strategies, for small, medium, and large size firms, are evaluated using a range of procedures including techniques which rely on mean-variance efficiency as well as evaluation procedures which help determine the ability of a strategy to mitigate downside risk. The results of the simulation exercise provide considerable support for the routine buying of at-the-money put options in setting a commodity floor price. The results also support the use, and perhaps the development, of insurance on cooperative throughput if the insurance product is used in conjunction with a price risk management strategy, in essence providing a hedge against downfalls in revenue. Over-the-counter revenue swaps, while intuitively appealing, did not perform well on average relative to more traditional exchange traded products. This result is especially important given the added counter party risk associated with such contracts. However, in some cases, the revenue swap, as well routine hedging with futures, performed better under a Value-at-Risk evaluation criteria than with a mean-variance criteria. Hence, it is important for cooperative managers to consider these results in the context of the risk management goals.Agribusiness,

Assessing the potential for tertiary nitrification in sub-surface flow constructed wetlands

The challenge of how to maintain or improve wastewater treatment performance without causing an excessive increase in energy or costs is increasingly focussed towards ammonia. On small sewage treatment works, solutions have historically been energy intensive: to divert waste to a larger plant, add a polishing step to the end of the process flow sheet or upgrade and replace upstream processes. Constructed wetlands (CWs) offer a low energy alternative to meet these challenges. This review explores oxygen transfer theory; nitrification performance of existing CW systems, and the key affecting factors to be considered when implementing the technology for tertiary treatment upgrades. Future perspectives include the use of artificial aeration and greater consideration of vertical sub-surface flow systems as they achieve the nitrification capacity in a smaller footprint than horizontal flow systems and, where suitable hydraulics permit, can be operated under very low energy demand