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

Author

Listed:
  • Geoffroy Enjolras

    (Université Pierre Mendès-France (Grenoble 2))

  • Fabian Capitanio

    (University of Naples Federico II = Università degli studi di Napoli Federico II)

  • Magali Aubert

    (Marchés, Organisations, Institutions et Stratégies d'Acteurs - Cirad - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - INRA - Institut National de la Recherche Agronomique - CIHEAM-IAMM - Centre International de Hautes Etudes Agronomiques Méditerranéennes - Institut Agronomique Méditerranéen de Montpellier - CIHEAM - Centre International de Hautes Études Agronomiques Méditerranéennes - Montpellier SupAgro - Institut national d’études supérieures agronomiques de Montpellier)

  • Felice Adinolfi

    (Dipartimento di Scienze Mediche Veterinarie - UNIBO - Alma Mater Studiorum Università di Bologna = University of Bologna)

Abstract

Volatility in farm income represents a major challenge for farm management and for 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 (European payments, crop insurance and inputs) to improve their income and reduce its volatility. French farms use the same tools to raise incomes and their volatility and tend to substitute European payments with production. These results question the efficiency of structural policies aimed at stabilizing farmers' incomes.

Suggested Citation

  • Geoffroy Enjolras & Fabian Capitanio & Magali Aubert & Felice Adinolfi, 2014. "Direct payments, crop insurance and the volatility of farm income. Some evidence in France and in Italy," Post-Print hal-02631893, HAL.
    • Handle: RePEc:hal:journl:hal-02631893
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    More about this item

    Keywords

    volatility; farm income; farm management; insurance; fadn;
    All these keywords.

    JEL classification:

    • G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies
    • Q14 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Finance
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy; Animal Welfare Policy

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