Contents

1. Introduction
1.1. Uncertainty and risk in agriculture
1.2. Modeling issues
2. Decision making under uncertainty
2.1. Preferences over lotteries and the expected utility model
2.2. Risk aversion
2.3. Ranking distributions
3. The agricultural producer under uncertainty and risk aversion
3.1. Modeling price and production uncertainty
3.2. Static models under risk neutrality
3.3. Static models under risk aversion
3.3.1. Introduction of uncertainty
3.3.2. Marginal changes in environment
3.3.3. Uncertainty and cost minimization
3.4. Dynamics and flexibility under uncertainty
4. Selected empirical issues
4.1. Identifying risk preferences
4.2. Estimating stochastic structures
4.3. Joint estimation of preferences and technology
4.4. Econometric estimation of supply models with risk
4.5. Risk and equilibrium in supply and production systems
4.6. Programming models with risk
4.7. Technology adoption, infrastructure and risk
5. Risk management for agricultural producers
5.1. Hedging with price contingent contracts
5.1.1. Forward contracts and futures contracts
5.1.2. Options on futures
5.1.3. The time pattern of hedging
5.1.4. Hedging and production decisions
5.1.5. The value of hedging to farmers
5.2. Crop Insurance
5.2.1. Moral hazard
5.2.2. Adverse selection
5.2.3. Further discussion
6. Conclusion