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Multiple agricultural risks and insurance—issues, perspectives, and illustration for wine-growing

Author

Listed:
  • Cécile Aubert

    (Univ. Bordeaux, CNRS, INRAE, BSE, UMR 6060, UMR 1441
    Toulouse School of Economics (TSE)
    GAEL, U. Grenoble Alpes)

  • Yann Raineau

    (Univ. Bordeaux, CNRS, INRAE, BSE, UMR 6060, UMR 1441
    INRAE, ETTIS)

  • Marc Raynal

    (Institut Français de la Vigne et du Vin (IFV), UMT SEVEN)

  • Nicolas Pasquier

    (Univ. Bordeaux, CNRS, INRAE, BSE, UMR 6060, UMR 1441
    GAEL, U. Grenoble Alpes)

Abstract

Agricultural producers face multiple risks, including climatic, disease, and market risks, that make crop insurance especially valuable to them. However, risk interactions raise specific issues: The value of prevention efforts in a multiple risk context, risk correlation, and compounded effects (whereby the realization of a risk makes it difficult to prevent another one) all affect the design and effectiveness of insurance. In contrast to the US, the EU-subsidized crop insurance creates different financial conditions for climate and pest risks and increases expertise costs. We discuss how this affects input use and disproportionately disadvantages organic producers because of compounded effects. We report on an experiment bundling a real pest insurance contract with an agronomic protocol aiming at reducing treatments, for vine-growing in the South-West of France. The experiment highlighted the costs to separating risks in insurance contracts, as well as the need for insurance to help transition to greener practices.

Suggested Citation

  • Cécile Aubert & Yann Raineau & Marc Raynal & Nicolas Pasquier, 2024. "Multiple agricultural risks and insurance—issues, perspectives, and illustration for wine-growing," Review of Agricultural, Food and Environmental Studies, Springer, vol. 105(4), pages 371-391, December.
    • Handle: RePEc:spr:roafes:v:105:y:2024:i:4:d:10.1007_s41130-024-00217-w
    DOI: 10.1007/s41130-024-00217-w
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    More about this item

    Keywords

    Multiple risks; Insurance; Wine-growing; Pesticides;
    All these keywords.

    JEL classification:

    • D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General
    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
    • 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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