Proposals to Transfer Risks in Avocado Load

Abstract

Proposals to Transfer Risks in Avocado Load

This study aims to mitigate some risks faced by established avocado industry actors in Michoacan by transferring risks from orchards to packaging facilities and distribution points. Using stochastic dynamic games and Merton-Black-Scholes theory, the study aims to maximize the long-term market share of packing house owners in the state in the presence of organized crime. To the best of our knowledge, this is the first time these methods have been used to this end. The premium to be paid in exchange for property rights over turnpikes is defined. Packaging facility owners are recommended to build a branch office in strategic locations to reduce organized crime control. At the same time, the paper suggests highway concessionaires issue insurance against theft of goods and finance it through the proposed procedure. The study includes cost-benefit sketches from both pecuniary and environmental perspectives but acknowledges that a thorough analysis requires knowledge of the local entrepreneurs’ willingness to implement green actions.