This thesis presents an analysis of the role of irrigation in farm-level risk managementand the effectiveness of water pricing policies and weather derivatives in reducing wateruse for corn, cotton, peanut, and tomato productions in Mitchell, Miller, and Lee Countiesin Georgia. Water resources in Georgia are under increasing pressure from human activity,highlighting the value of efficient management of irrigation water. It is expected that certainpolicies can effectively reduce irrigation water use.Two conclusions developed from the findings of this study. First, the optimal irrigationstrategy can greatly increase producers Certainty Equivalent Revenue, and recent changes inwater pricing policies would only have a limited impact on the amount of water used for cropproduction in this region. Second, across levels of risk preference, the contracts are found toincrease Certainty Equivalent Revenue and reduce accumulative water use when comparedto a base scenario without weather derivative contracts.
