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Market-type and government supported risk management in the Hungarian agriculture

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  • Tóth, József
  • Nemes, Anna

Abstract

In 2012 Hungary introduced the two-pillar risk management system. The first pillar refers to an “all-risk” fund, where the participation of agricultural producers is obliged above a certain size. The second pillar is market based voluntary insurance with state-support scheme. Our research question: what are the key factors influencing the insurance decisions of producers? We have unbalanced FADN data of 1395 producers with 7177 observations between 2001 and 2012. Based on random effect panel probit model we have found that income, diversity, concentration and size of area were playing significant role in farmers’ decisions. Naïve expectations were also present.

Suggested Citation

  • Tóth, József & Nemes, Anna, 2014. "Market-type and government supported risk management in the Hungarian agriculture," 2014 International Congress, August 26-29, 2014, Ljubljana, Slovenia 182854, European Association of Agricultural Economists.
    • Handle: RePEc:ags:eaae14:182854
    DOI: 10.22004/ag.econ.182854
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    2. Scott H. Irwin & Cameron S. Thraen, 1994. "Rational Expectations in Agriculture? A Review of the Issues and the Evidence," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 16(1), pages 133-158.
    3. Keith H. Coble & Barry J. Barnett, 2013. "Why Do We Subsidize Crop Insurance?," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 95(2), pages 498-504.
    4. Luisa Menapace & Gregory Colson & Roberta Raffaelli, 2013. "Risk Aversion, Subjective Beliefs, and Farmer Risk Management Strategies," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 95(2), pages 384-389.
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