This study investigated the impact of the Farm Income Stabilization Insurance (ASRA) on the adoption of
price risk management strategies by lamb producers in the province of Quebec. This study employed a
Generalized Autoregressive Conditional Heteroskedasticity (GARCH) process to model price risks. The
results indicated that the application of the Farm Income Stabilization Insurance in Quebec generates
crowding-out effects on price risk management strategies, which decreases the efficiency of this program.
On the other hand, the product-specific nature of ASRA leads to some challenges such as a modification in
the revenue distribution across the farm, increased production, increased indebtedness of farmers and
the increased financial burden on governments’ shoulders. Finally, the results imply asymmetric impacts of
negative and positive shocks generated by ASRA which result in an increasing risk-aversion of producers
over the periods of decreased prices and a decreasing risk aversion over the periods of increased prices
