Question

Essay on how agriculture depends on weather

Answer 1

Answer:

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Agricultural activities are often affected by the weather. Weather is unpredictable as it changes from time to time. As the agricultural activities affected, the crops or the outcome of the agricultural activities would be affected as well and this caused the income of the farmers to be affected or causing the investors to lose money. Therefore, weather derivative is needed to protect the farmers and investors. So, this research is all about modelling and pricing of weather derivatives where the weather is based on the daily average temperature in Malaysia. In this research, there are two main objectives which include the modelling of temperature and pricing of weather derivatives. To complete this research project, there are 10 stages to be gone through. The details about the stages would be discussed in the methodology of this research

The model used to model the movement of daily average temperature in this research would be the stochastic fractional Brownian motion. This model is chosen because based on the past researches, this model fits the data well and successfully modelled the dynamics of daily average temperature. From this research, the daily temperature is expected to be modelled and described by the stated model well. Besides that, the pricing of weather derivatives will be encountered as well. Through this research, it provides a lot of advantages. For example, it provides a better idea in the process of modelling the temperature and the pricing method of weather derivatives. The outcome from this research can be used as a reference for future researchers that do research in this field.

Answer 2

Answer:

Weather plays a major role in determining the success of agricultural pursuits. Most field crops are dependent solely upon weather to provide life‐sustaining water and energy. ... Occasionally, adverse weather conditions can cause production losses, especially if experienced during critical stages of growth.