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Crop Insurance in the European Union: Lessons and Caution from the United States

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  • Ramsey, Austin Ford
  • Santeramo, Fabio Gaetano

Abstract

Recent changes in the Common Agricultural Policy have focused attention on the possibility of an enlarged crop insurance program in Europe. Several countries in the European Union already have national crop insurance schemes, but the performance of these programs in terms of realized demand has been low. In some cases, participation in the programs remains low in spite of significant subsidies to insurance premiums. This situation can be contrasted with the federal crop insurance program in the United States, which is now the principal instrument of American agricultural policy and insured over 366 million acres in 2015. We focus on two questions: are there any justifications for subsidized crop insurance and how could such a scheme possibly be implemented in the EU? Quantitative and qualitative comparisons of the current state of crop insurance in the EU and US serve to motivate our observations.

Suggested Citation

  • Ramsey, Austin Ford & Santeramo, Fabio Gaetano, 2017. "Crop Insurance in the European Union: Lessons and Caution from the United States," MPRA Paper 79164, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:79164
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    References listed on IDEAS

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    1. F. G. Santeramo & B. K. Goodwin & F. Adinolfi & F. Capitanio, 2016. "Farmer Participation, Entry and Exit Decisions in the Italian Crop Insurance Programme," Journal of Agricultural Economics, Wiley Blackwell, vol. 67(3), pages 639-657, September.
    2. Alberto Garrido & David Zilberman, 2008. "Revisiting the demand for agricultural insurance: the case of Spain," Agricultural Finance Review, Emerald Group Publishing Limited, vol. 68(1), pages 43-66, May.
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    9. Barry K. Goodwin & Vincent H. Smith, 2013. "What Harm Is Done By Subsidizing Crop Insurance?," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 95(2), pages 489-497.
    10. Bruce J. Sherrick & Peter J. Barry & Paul N. Ellinger & Gary D. Schnitkey, 2004. "Factors Influencing Farmers' Crop Insurance Decisions," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 86(1), pages 103-114.
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    Cited by:

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    2. Jean Cordier, 2017. "Critical issues for the implementation of a mutual fund compensating for production loss under Article 38 of Reg. (EU) No. 1305/2013," Post-Print hal-02786417, HAL.
    3. Tappi, Marco & Nardone, Gianluca & Santeramo, Fabio Gaetano, 2022. "On the relationships among durum wheat yields and weather conditions: evidence from Apulia region, Southern Italy," Bio-based and Applied Economics Journal, Italian Association of Agricultural and Applied Economics (AIEAA), vol. 11(2), July.
    4. Ruggiero Rippo & Simone Cerroni, 2023. "Farmers' participation in the Income Stabilisation Tool: Evidence from the apple sector in Italy," Journal of Agricultural Economics, Wiley Blackwell, vol. 74(1), pages 273-294, February.
    5. Fabio G Santeramo, 2019. "I Learn, You Learn, We Gain Experience in Crop Insurance Markets," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 41(2), pages 284-304, June.
    6. Vilenchuk, Oleksandr, 2018. "Трирівневий Аналіз Функціонування Ринку Аграрного Страхування В Україні," Agricultural and Resource Economics: International Scientific E-Journal, Agricultural and Resource Economics: International Scientific E-Journal, vol. 4(2), June.
    7. Möhring, Niklas & Dalhaus, Tobias & Enjolras, Geoffroy & Finger, Robert, 2020. "Crop insurance and pesticide use in European agriculture," Agricultural Systems, Elsevier, vol. 184(C).
    8. Marco Rogna & Günter Schamel & Alex Weissensteiner, 2023. "Modelling the switch from hail insurance to antihail nets," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 67(1), pages 118-136, January.
    9. Jørgensen, Sisse Liv & Termansen, Mette & Pascual, Unai, 2020. "Natural insurance as condition for market insurance: Climate change adaptation in agriculture," Ecological Economics, Elsevier, vol. 169(C).
    10. Tappi, Marco & Carucci, Federica & Gatta, Giuseppe & Giuliani, Marcella Michela & Lamonaca, Emilia & Santeramo, Fabio Gaetano, 2023. "Temporal and design approaches and yield-weather relationships," MPRA Paper 117488, University Library of Munich, Germany.
    11. Alessandro Banterle & Daniela Vandone, 2019. "Price volatility and risk management: The case of rice in the EU," Economia agro-alimentare, FrancoAngeli Editore, vol. 21(2), pages 255-274.
    12. Fabio G., Santeramo & Ilaria, Russo & Emilia, Lamonaca, 2022. "Italian subsidised crop insurance: what the role of policy changes," MPRA Paper 115299, University Library of Munich, Germany.

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    More about this item

    Keywords

    Crop Insurance; EU; USA; Insurance scheme;
    All these keywords.

    JEL classification:

    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy; Animal Welfare Policy

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