Analysis of legal and economic aspects of precipitation weather derivatives for Serbian agricultural sector
Weather derivatives are not present in Serbia nor in the neighbouring countries and have no significant application in the European Union, either. Weather derivatives originated in the USA, where the market for these instruments is most developed, in terms of both economy and law. However, positive...
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| Format: | Article |
| Language: | English |
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Naučno društvo agrarnih ekonomista Balkana, Beograd; Institut za ekonomiku poljoprivrede, Beograd i Akademija ekonomskih nauka, Bukurešt
2014-01-01
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| Series: | Ekonomika Poljoprivrede (1979) |
| Subjects: | |
| Online Access: | http://scindeks-clanci.ceon.rs/data/pdf/0352-3462/2014/0352-34621404053V.pdf |
| _version_ | 1818538104777080832 |
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| author | Veselinović Janko Marković Todor Đukić Stanimir |
| author_facet | Veselinović Janko Marković Todor Đukić Stanimir |
| author_sort | Veselinović Janko |
| collection | DOAJ |
| description | Weather derivatives are not present in Serbia nor in the neighbouring countries and have no significant application in the European Union, either. Weather derivatives originated in the USA, where the market for these instruments is most developed, in terms of both economy and law. However, positive effects of their application, through the decrease of influence of unfavourable weather conditions on agricultural crops, are a good basis for their further study. The most common reasons for their absence from our financial market are their complexity and the inexistence of prerequisites for their introduction. This paper analyses legal and economic aspects of weather derivatives, as forms of financial derivatives, as well as weather derivative contracts concluded with the aim of hedging against precipitation exposure. The goal of the analysis is to find an optimal contract structure, but also the conditions that have to be met in order for its signing to be economically justified for both contractual parties, as well as the creation of preconditions for this weather derivative contract to be the instrument of trade on the financial market. The paper also analyses normative frameworks for the conclusion of these derivative contracts, as well as the necessity to educate market participants, which refers both to agricultural producers and financial institutions. Furthermore, it emphasizes the difference in relation to the classical contract of insurance against drought risk. |
| first_indexed | 2024-12-11T21:24:43Z |
| format | Article |
| id | doaj.art-5a5ed50e241049e58153a08f916099aa |
| institution | Directory Open Access Journal |
| issn | 0352-3462 2334-8453 |
| language | English |
| last_indexed | 2024-12-11T21:24:43Z |
| publishDate | 2014-01-01 |
| publisher | Naučno društvo agrarnih ekonomista Balkana, Beograd; Institut za ekonomiku poljoprivrede, Beograd i Akademija ekonomskih nauka, Bukurešt |
| record_format | Article |
| series | Ekonomika Poljoprivrede (1979) |
| spelling | doaj.art-5a5ed50e241049e58153a08f916099aa2022-12-22T00:50:21ZengNaučno društvo agrarnih ekonomista Balkana, Beograd; Institut za ekonomiku poljoprivrede, Beograd i Akademija ekonomskih nauka, BukureštEkonomika Poljoprivrede (1979)0352-34622334-84532014-01-016141053106710.5937/ekoPolj1404053V0352-34621404053VAnalysis of legal and economic aspects of precipitation weather derivatives for Serbian agricultural sectorVeselinović Janko0Marković Todor1Đukić Stanimir2Poljoprivredni fakultet, Departman za ekonomiku poljoprivrede i sociologiju sela, Novi SadPoljoprivredni fakultet, Departman za ekonomiku poljoprivrede i sociologiju sela, Novi SadUniversity EDUCONS, Faculty of Business Economy, Sremska Kamenica, Sremska Kamenica, SerbiaWeather derivatives are not present in Serbia nor in the neighbouring countries and have no significant application in the European Union, either. Weather derivatives originated in the USA, where the market for these instruments is most developed, in terms of both economy and law. However, positive effects of their application, through the decrease of influence of unfavourable weather conditions on agricultural crops, are a good basis for their further study. The most common reasons for their absence from our financial market are their complexity and the inexistence of prerequisites for their introduction. This paper analyses legal and economic aspects of weather derivatives, as forms of financial derivatives, as well as weather derivative contracts concluded with the aim of hedging against precipitation exposure. The goal of the analysis is to find an optimal contract structure, but also the conditions that have to be met in order for its signing to be economically justified for both contractual parties, as well as the creation of preconditions for this weather derivative contract to be the instrument of trade on the financial market. The paper also analyses normative frameworks for the conclusion of these derivative contracts, as well as the necessity to educate market participants, which refers both to agricultural producers and financial institutions. Furthermore, it emphasizes the difference in relation to the classical contract of insurance against drought risk.http://scindeks-clanci.ceon.rs/data/pdf/0352-3462/2014/0352-34621404053V.pdfhedging strategiesprecipitation quantityweather derivatives |
| spellingShingle | Veselinović Janko Marković Todor Đukić Stanimir Analysis of legal and economic aspects of precipitation weather derivatives for Serbian agricultural sector Ekonomika Poljoprivrede (1979) hedging strategies precipitation quantity weather derivatives |
| title | Analysis of legal and economic aspects of precipitation weather derivatives for Serbian agricultural sector |
| title_full | Analysis of legal and economic aspects of precipitation weather derivatives for Serbian agricultural sector |
| title_fullStr | Analysis of legal and economic aspects of precipitation weather derivatives for Serbian agricultural sector |
| title_full_unstemmed | Analysis of legal and economic aspects of precipitation weather derivatives for Serbian agricultural sector |
| title_short | Analysis of legal and economic aspects of precipitation weather derivatives for Serbian agricultural sector |
| title_sort | analysis of legal and economic aspects of precipitation weather derivatives for serbian agricultural sector |
| topic | hedging strategies precipitation quantity weather derivatives |
| url | http://scindeks-clanci.ceon.rs/data/pdf/0352-3462/2014/0352-34621404053V.pdf |
| work_keys_str_mv | AT veselinovicjanko analysisoflegalandeconomicaspectsofprecipitationweatherderivativesforserbianagriculturalsector AT markovictodor analysisoflegalandeconomicaspectsofprecipitationweatherderivativesforserbianagriculturalsector AT đukicstanimir analysisoflegalandeconomicaspectsofprecipitationweatherderivativesforserbianagriculturalsector |