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Business Risk Management Programs and Risk-balancing Behavior in Ontario Hog Sector

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Title: Business Risk Management Programs and Risk-balancing Behavior in Ontario Hog Sector
Author: Phan, Truc
Department: Department of Food, Agricultural and Resource Economics
Program: Food, Agriculture and Resource Economics
Advisor: Sarker, Rakhal
Abstract: Agri-food sectors in Canada are supported through safety net programs. CAIS/BRM programs were designed to help producers reduce BR by mitigating negative income shocks and reducing income variability. Nevertheless, according to the risk-balancing hypothesis, farms may take more FR in response to a reduction in BR as a result of program payments. If we find evidence of such behavior, risk-reduction efforts of CAIS/BRM programs may not generate intended outcomes. This thesis employs OFID tax-filing data over the 2003-2014 period to estimate the extent of risk-balancing in the Ontario hog sector as a result of AgriStability payments under CAIS/BRM. We find that that AgriStability payments were effective in reducing BR for medium and large farms but not small farms. Controlling for other determinants of financial risk, our log-log fixed-effects regression provides evidence of risk-balancing for medium and large farms in Ontario hog sector.
Date: 2018-08
Rights: Attribution-NonCommercial-NoDerivs 2.5 Canada
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Attribution-NonCommercial-NoDerivs 2.5 Canada Except where otherwise noted, this item's license is described as Attribution-NonCommercial-NoDerivs 2.5 Canada