Research Program on Agricultural Risk

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1 Research Program on Agricultural Risk Agricultural Risk Managment in Argentina Buenos Aires, 2nd June 2015.

2 Institucional Framework Objetives Research and Network External Advisors Research Team

3 Institutional Framework The program is developed in the Quantitative Research Center of the University of Buenos Aires PICT : Financial Governance: Regulatory proposals and socioeconomic impact. Dentro del objetivo Macroeconomic Risk Index. UBACyT : Sustainable Macro prudential Governance : financing innovation, agricultural and socioeconomic impact.

4 GENERAL AIM The general aim of this program is to design an integrated agricultural risk management matrix, considering price and climate risk, and designing financial innovations to manage them, in order to enhance that adaptation capacity of Argentinean economy to climate change.

5 Structure Incidence Scenarios Identify assess Tools Risks Mitigate Integral Agricultural Risk Management Follow Public Policies Control

6 Incidence Macro Risk Regional Incidence Scenario Climate variability Escenario valuation Price volatility Risks Quantity Risk Price Risk Instruments Insurance Derivates Public Policies Disaster management Agricultural Emergency Meso Insurance Fiscal Stabilization Funds Development of financial tools

7 PROJECT KEY IDEAS 1. We study climate change mitigation and adaptation strategies specifically in the agricultural sector of Argentina 2. We focus on an integrated risk management framework from a public and private participation perspective 3. Even through there is a strong specialization in climate risk, we still study price risk. 4. We intend to develop financial and fiscal innovations

8 SPECIFIC LINES OF RESEARCH 1. Macroeconomic and regional impact and valuation on climate change 2. Price risk: study of the commodities financialization hypothesis. 3. Financial innovations for climate risk management 4. Agricultural Risk Managment (ERM): study cases 5. Agricultural risk governance

9 ESPECIFIC OBJECTIVES 1- Macroeconomic and Sectorial impact of climate change in Argentina Valuation of potential losses of gross product, public and private income, currency derivatives price projections (market risks) and Quantities (climate risks).

10 ESPECIFIC OBJECTIVES 2- PRICE RISK Price risk: study the dynamic changes in the price formation of agricultural commodities. Financialization process of commodities. Coverage, speculation and portfolio.

11 ESPECIFIC OBJECTIVES 3- FINANCIAL INNOVATIONS APPLIED TO MANAGEMENT OF CLIMATE CHANGE RISK Scope and limitations of traditional insurances (property and income insurance). Indices based coverage: indexes insurance and climate derivatives.

12 ESPECIFIC OBJECTIVES 4- INTEGRAL MANAGEMENT OF AGRICULTURAL RISK: APLICATION OF THE ENTERPRISE RISK MANAGMENT (ERM) APPROACH TO AGRICULTURAL HOLDINGS. Cases of study 5- AGRICULTURAL RISK GOVERNANCE. Emergency and disaster management funds Macro and Meso levels coverage for small producers. Disaster management

13 PROGRAM AND ITS ARTICULATIONS

14 ADVISORY COMMITTEE Ramiro Costa. Chief Economist at City of Buenos Aires Grain Exchange. Daniel Lema. PhD in Economics at CEMA. Researcher at the Economics and Sociology Institute (INTA). Daniel Miguez. Master in Government Economics and Bachelor in Economics (UBA). Agricultural Risk Office, MINAGRI Nicolás Jorge. Master in Economics (Di Tella University) and Bachelor in Economics (UBA). Economist at INAI Foundation.

15 TEAM RESEARCHERS TEAM Coordinator PhD. Miguel Ángel Fusco Trained Researchers PhD. Esteban Otto Thomasz Ma. Juan Miguel Massot B.Ec. Ana Vilker B.Ec. Mariano Eriz

16 TEAM RESEARCHERS TEAM Associate Researchers B.Ec. Alma Isoldi Ma. Dario Bacchini Ma. Paula Paula Mutchinick PhD Thesis Students Ma. Ignacio Clancy Ma. Gonzalo Rondinone

17 TEAM RESEARCHERS TEAM Master Thesis Students Bruno campanero Denisse Rodríguez Luis Massera Carolina Pinzón Soledad Palacios

18 TEAM RESEARCHERS TEAM Degree Thesis Students Ignacio Ubaldi Gerardo Martin Totah Researcher Students Lisette de los Ángeles Calloapaza Santiago Pérez Ignacio Saffigna

19 PRODUCTION PRODUCTION Macroeconomic Risk and Sectorial Impact Macroeconomic Risk in the Society of Global Risk: An approximation (Massot) Soy Complex Impact: macroeconomics risk implication (Thomasz) Agro Industry, Innovation and Economic Growth in Argentina (Massot et al) Economic Measurement of Climate Variability on Argentinean Agriculture (Casparri, Thomasz, Vilker)

20 PRODUCTION Price Risk PRODUCTION Commodities Indices (Rondinone y Thomasz) Commodities Financialization Process Soy (Rondinone, Thomasz) Wheat (Casparri, Thomasz y Rondinone)

21 PRODUCTION PRODUCTION Climate Risk Agricultural Insurance Survey in Argentina (Fusco, Calloapaza) World Comparative Study of index insurance (Massera, Thomasz y Fusco) Theoretical Design of Index Insurance and Climate Derivatives(Clancy, Thomasz y Fusco) Index Insurance for the Soy Case (Fusco, Mutchnik, Ubaldy) Climate Derivative for the Soy Case(Fusco, Totah ) Climate Derivatives Framework (Fusco, Saffigna )

22 PRODUCTION Governance PRODUCTION Agricultural Emergency Law(Fusco) Meso Level Insurance: The Wheat Case in the Buenos Aires Province(Campanero, Thomasz y Fusco)

23 PRODUCTION Study Cases PRODUCTION Agricultural Risk Management in Argentina (Fusco y Thomasz) The Cocoa in Ecuador (Rodriguez, Thomasz y Fusco) The Coffee in Colombia (Pinzón, Fusco) The Livestock in South Buenos Aires Province (Palacios, Fusco) The Grape in Mendoza (Pérez, Fusco)

24 Thank You

MARIANA CHUDNOVSKY Centro de Investigación y Acción Social -CIAS /University of San Andrés Av. Callao 542 CABA Tel: 5238-7732 marichud@gmail.

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