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New Futures Markets in Agricultural Production Rights: Possibilities and Constraints for the British and Dutch Milk Quota Markets

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  • Joost M. E. Pennings
  • Matthew T. G. Meulenberg

Abstract

Farms are increasingly being affected by policies that involve production rights. Because of fluctuations in the prices of these rights in the spot market, farmers face a price risk. Establishing a futures market might enable them to hedge against this price risk. Rights futures have some features that differ from those of traditional commodity futures. This makes them an effective and efficient tool for managing price risk. The implications of these findings will be illustrated for milk quotas in the United Kingdom and The Netherlands. Prior conditions which might make a futures market for milk quotas successful in both countries will be deduced.

Suggested Citation

  • Joost M. E. Pennings & Matthew T. G. Meulenberg, 1998. "New Futures Markets in Agricultural Production Rights: Possibilities and Constraints for the British and Dutch Milk Quota Markets," Journal of Agricultural Economics, Wiley Blackwell, vol. 49(1), pages 50-66, March.
    • Handle: RePEc:bla:jageco:v:49:y:1998:i:1:p:50-66
    DOI: 10.1111/j.1477-9552.1998.tb01251.x
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    References listed on IDEAS

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    Cited by:

    1. Antonio Alvarez & Carlos Arias & Luis Orea, 2006. "Explaining Differences in Milk Quota Values: The Role of Economic Efficiency," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 88(1), pages 182-193.
    2. Skully, David W., 1999. "The Economics Of Trq Administration," Working Papers 14584, International Agricultural Trade Research Consortium.
    3. Skully, David W., 2001. "Economics of Tariff-Rate Quota Administration," Technical Bulletins 184332, United States Department of Agriculture, Economic Research Service.

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