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Direct payments, crop insurance and the volatility of farm income. Some evidence in France and in Italy

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  • Enjolras, Geoffroy
  • Capitanio, Fabian
  • Aubert, Magali
  • Adinolfi, Felice

Abstract

Volatility of farm income represents a major challenge for farm management and the design of public policies. This paper measures the extent to which risk management tools, especially direct payments and crop insurance, can significantly reduce crop income volatility in France and in Italy. We use an original dataset of 9,555 farms for the period 2003-2007 drawn up from the Farm Accountancy Data Network (FADN) and three different econometric models to explain the volatility of crop income. The results are contrasted between the specialization of the farms and the two countries: Italian farms use management tools (CAP payments and crop insurance) so as to improve their income and to reduce its volatility (crop insurance, inputs). French farms use the same instruments to increase their income and therefore its volatility while they tend to substitute CAP payments to production. These results question the efficiency of structural policies aimed at stabilizing the farmers' income.

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Bibliographic Info

Paper provided by European Association of Agricultural Economists in its series 123rd Seminar, February 23-24, 2012, Dublin, Ireland with number 122478.

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Date of creation: 23 Feb 2012
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Handle: RePEc:ags:eaa123:122478

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Keywords: Volatility; Direct payments; Insurance; France; Italy; FADN; Risk and Uncertainty; G22; Q14; Q18;

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Cited by:
  1. Magali Aubert & Geoffroy Enjolras, 2013. "Quelles incitations pour la vente au détail ? Une analyse économique et financière des exploitations agricoles françaises," Working Papers 226169, Institut National de la Recherche Agronomique, France.
  2. Magali Aubert & Geoffroy Enjolras, 2012. "Quand le surdosage devient la norme : un diagnostic des exploitations viticoles françaises," Working Papers 175554, Institut National de la Recherche Agronomique, France.

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