Weather Derivatives Essay

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Ms.Hemlata Chelawat, Hitesh Chelawat & Dr. Anil Kothari in their study titled “Weather Derivatives -‘A tool for Agri –Risk Management’ (2012)” tried to examined the need for hedging the agricultural sector against weather risk .The study highlighted the major issues like how to assess the drawbacks of agriculture insurance in India and the reason for its failure, also to examined the feasibility of rainfall derivatives as a risk management tool for Indian agricultural sector and also construed the use of various type of derivatives contracts in agriculture sector .In the study they found that crop insurance has proved very expensive for the farmer and it has been very heavily subsidized in comparability weather derivative can serve as an effective …show more content…

Another study conducted by Dr.E.V.P.A.S. Pallavi titled,” Challenges to Weather Derivatives Instruments in India” (2015). This study examines the challenges to weather derivatives instruments in India. This study further finds that in 2010 due to uncertain global weather condition many business and industries are affected especially commodities. Anil K. Sharma &Ashutosh Vashisht conducted a research study titled, “ Weather Derivatives: Risk Hedging prospects for agriculture and power sector in India” in the journal of Risk Finance (March 2007). They examined that the effectiveness of weather derivatives as a risk management tool in Indian agriculture sector and inferred that the appropriate use of weather derivative may be more economical way of managing the volume related weather risk in developing countries like India. Yet another study conducted by Gurdev Singh titled, “ Crop Insurance In India” (2010) .The paper review the dependence of Indian agriculture on ambiguous rain. The study observed that the farmer sense different risk, like production risk which associated to various crop enterprises and marketing risk for distinct agro climatic regions and

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