The role of weather derivatives in agricultural risk management of Uzbekistan

¹ University of World Economy and Diplomacy, Systematic Analysis and Mathematical Modelling Department, 54 Mustakillik Ave., Tashkent 100007, Uzbekistan
² International School of Financial Technologies and Science, University Street 7, Kibray district, Tashkent region, Uzbekistan
³ "TIIAME" National Research University, str. Kory Niyoziy, 39, Tashkent 100000, Uzbekistan
⁴ University of Digital Economics and Agrotechnology, 3, Boshlik street, Yakkasaray district, Tashkent, 3, Boshlik street, Yakkasaray district, Tashkent, 100022, Uzbekistan

^* Corresponding author: mohinaabdulakimova@gmail.com

Abstract

Uzbekistan’s agricultural sector faces significant challenges from climate change, with unpredictable weather patterns impacting crop yields and jeopardizing food security. This study focuses on the potential of weather derivatives to mitigate agricultural risks in Uzbekistan, particularly in the context of wheat production, a crucial sector for the nation’s economy and food security. The study explores the feasibility of implementing weather derivatives in Uzbekistan, considering the current financial infrastructure and regulatory environment. It highlights the potential benefits of weather derivatives, including improved risk management, increased access to financing, and greater resilience to climate change. By examining the factors that influence the success of weather derivatives in other regions, the study outlines a framework for effective implementation in Uzbekistan, advocating for collaborative efforts between the government, financial institutions, and agricultural producers. The research ultimately emphasizes the importance of weather derivatives as a tool for enhancing agricultural resilience and fostering sustainable development in Uzbekistan.