Abstract: A model of a global food system need at least two points in time per year and two locations with different growing seasons so that planting and harvesting have different timing across locations. Moreover, planting decisions reflect soil states affected by stochastic weather since previous point in time, while harvest reflect the planting decisions and the stochastic weather through the growing season up to next point. Decisions on trade, storage and consumption are taken at every point in time. Despite stochastic influence, deterministic stationary general equilibrium is applicable. The world then runs in circles through a likely sequence of N given weather scenarios, while the decision-makers do not know the next scenario. The model will provide a setting in which the consequences of climate change can be assessed both with respect to expectations and variances. It will by construction be an integrated assessment model (IAM) in the sense that outcomes follow from agent choices in a world of biophysical processes. In this case the biophysical world is stochastic. At the prototype stage neither existing behavioral nor bio-physical models will be applied.

Abstract: It is a widely held belief (IPCC) that climate change bringsmore risks to the worldI Since the start of MACSUR, TradeM has had risk on theagenda, but few results have so far come out. It has beenclaimed though, that there is no evidence for more risk in theglobal wheat market (Steen and Gjølberg 2014) (TradeMworkshop at Hurdalssjøen)I I have myself had the ambition of creating a dynamicstochastic model of the food system in which risk would be anintegral part, but time has been too shortI I have also pointed to methods from finance to reveal insights,and that is the road to be followed here, guided by Bølviken &Benth (2000) Buyer’s risk larger than seller’s risk — due to asymmetricdistribution of returns. Large price jumps are more likely thanequally sized price falls.I Long term positions much more risky than short term ones —as expectedI Agricultural commodities much less risky than crude oilI Price risk are related to volatility, and their changes over timewill have similar causal explanationsI Risks of producers and consumers of agricultural commoditieswill to some extent be related to the price risk, and also totheir portfolios and the co-variance between returns