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Recent years have been tumultuous in the agricultural sector.   Product and input price
volatility have increased.  macro-economic disturbances, disease outbreaks and adverse
weather events such as floods and droughts.   The latter may become more frequent
through climate change and has led to volatility in production.   Climate variability is
a major risk for agricultural production, and this risk is likely to increase under future
climate change.   The global climate change issue is complex.   There is now general
agreement that global warming is occurring, and that human activities contribute
to it.   Future climate change is predicted to lead to warmer average temperatures,
increased rainfall variability, and increases in the frequency and severity of extreme
climatic events such as droughts and floods.   As a result of climate variability and
climate change, farmers could very well be exposed to significant production risks,
which are likely to increase in the future.   This paper examines the risks of climate
variability and climate change in agricultural production and discusses, in particular,
risk management as the most effective tool for agricultural producers for managing
these risks.   If their probability increases, insurance will have to adapt its premiums
and attempt to foresee such changes, but it will potentially be a useful tool in such a
circumstances.
 

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