Market-based price risk management: An exploration of commodity income stabilization options for coffee farmers

By Lamon Rutten, Frida Youssef on June 21, 2007
Producers and many others in much of the developing world are exposed to highly volatile commodity revenues. A range of methods have been tried to either reduce this exposure (for example, through compensatory schemes and production/export controls) or to better manage it (e.g., through stabilization funds or market-based risk management mechanisms). This paper, one of a series on this subject commissioned by the International Institute for Sustainable Development (IISD), focuses on market-based instruments. Rather than providing a broad, theoretical description (which is amply available from other sources, including international organizations such as FAO, UNCTAD and World Bank) it takes the case of one commodity—coffee—and looks at how market-based risk management can be used to improve coffee growers' lives.

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IISD, 2007