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An examination of the role of price insurance products in stimulating investment in agriculture supply chains for sustained productivity

Assa, H., Sharifi, H., Lyons, A. (2021) An examination of the role of price insurance products in stimulating investment in agriculture supply chains for sustained productivity. European Journal of Operational Research, 288 (3). pp. 918-934. ISSN 0377-2217. (doi:10.1016/j.ejor.2020.06.030) (The full text of this publication is not currently available from this repository. You may be able to access a copy if URLs are provided) (KAR id:87558)

The full text of this publication is not currently available from this repository. You may be able to access a copy if URLs are provided. (Contact us about this Publication)
Official URL
http://dx.doi.org/10.1016/j.ejor.2020.06.030

Abstract

This study examines how managing risk by introducing commodity price insurances may improve the likelihood of increased investment in agri-food supply chains. A model is introduced which shows how insurance products on index prices can reduce the uncertainty of the impact of investment, and also how lower investment can generate the same impact as a higher investment. To show our results, we use two different frameworks which include total profit (Pareto optimal) and Stackelberg game setups. The results demonstrate that in both frameworks the investment will have a greater impact when an insurance product is present. By implication, the study presents an encouraging message to the insurance industry to introduce products to secure supply chain actors’ revenue leading to an increase in investment rate. Consequently, the study offers insight into how the role of traditional government subsidies for protecting farmers, particularly the small to medium-sized farms, may be revisited by replacing some of the existing subsidisation policies with revenue insurance. © 2020 Elsevier B.V.

Item Type: Article
DOI/Identification number: 10.1016/j.ejor.2020.06.030
Uncontrolled keywords: Agriculture; Food supply; Insurance; Pareto principle; Risk management; Supply chains, Agri-food supply chains; Commodity prices; Government subsidies; Insurance industry; Pareto-optimal; Secure supply chains; Stackelberg Games; Sustained productivity, Investments
Subjects: H Social Sciences
Divisions: Divisions > Kent Business School - Division > Department of Accounting and Finance
Depositing User: Hirbod Assa
Date Deposited: 28 Apr 2021 13:46 UTC
Last Modified: 04 Feb 2022 13:26 UTC
Resource URI: https://kar.kent.ac.uk/id/eprint/87558 (The current URI for this page, for reference purposes)
Assa, H.: https://orcid.org/0000-0002-4429-8684
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