Due to a rising interest in natural fibres for textiles as well as environmental concerns, the demand for fibre flax has increased in recent decades. It was, therefore, with great enthusiasm that Canadian farmers welcomed, in 1997, the opening of a flaxprocessing unit in the region of Salaberry-de-Valleyfield, Quebec. The purpose of this study was to investigate the economic viability of fibre flax contracting as an alternative activity for field-crop producers in Quebec. A risk-programming model called minimization of total absolute deviation (MOTAD) was developed to better approach this issue. The MOTAD takes into account the variability in income that stems from uncertainty in commodity-market prices and yields. In addition, five different marketing strategies for pricing grain corn and soybeans were included in the model. These pricing techniques combined the use of futures and options markets. / In a global agricultural system, where international commitments force governments to cut subsidies, reducing income variability for risk-averse farmers becomes a critical challenge. This study offered to assess the contribution of both contracting and futures markets as alternative market instruments for risk management. Five portfolio farm plans were identified for 200- and 300-hectare farm sizes. The results showed that gains through fibre flax contracting, in terms of risk reduction, exist only for the farm plans with lower levels of income and risk. Moreover, simulations demonstrated that the use of futures and options markets can help maximize overall net farm return.
| Identifer | oai:union.ndltd.org:LACETR/oai:collectionscanada.gc.ca:QMM.31182 |
| Date | January 2001 |
| Creators | Amrouk, El Mamoun. |
| Contributors | Gunjal, Kisan (advisor) |
| Publisher | McGill University |
| Source Sets | Library and Archives Canada ETDs Repository / Centre d'archives des thèses électroniques de Bibliothèque et Archives Canada |
| Language | English |
| Detected Language | English |
| Type | Electronic Thesis or Dissertation |
| Format | application/pdf |
| Coverage | Master of Science (Department of Agricultural Economics.) |
| Rights | All items in eScholarship@McGill are protected by copyright with all rights reserved unless otherwise indicated. |
| Relation | alephsysno: 001810076, proquestno: MQ70370, Theses scanned by UMI/ProQuest. |
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