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Abstract
Farm risk management for income stabilization is on-going issue. An applied work has been
performed to measure farm risk using a stochastic model. Risk management tools, with symmetric as
well as asymmetric impacts, are then tested and compared through ad hoc statistics. Normal farm
business risk can be efficiently managed using a precautionary saving provision. Farm revenue
insurance is found as the most efficient asymmetric tool for dealing with climatic and market shocks.
The linkage between these complementary tools can be adjusted upon market environment.