Agricultural options: An alternative to current agricultural programs

Abstract

Agricultural options can enable farmers to obtain some of the same types of price protection currently available through the government's agricultural programs. Farmers can use agricultural options to reduce the price variability that they face when they sell their commodities, without disrupting market prices and thus market signals. The benefits of using agricultural options instead of price-support programs will be better allocation of resources, increased exports, and reduced government spending in agriculture. However, practical problems must be solved before agricultural options can replace certain agricultural programs.