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Crop Biodiversity, Risk Management and the Implications of Agricultural Assistance

Author

Listed:
  • Salvatore Di Falco
  • Charles Perrings

    (Department of Economics, National University of Ireland, Galway)

Abstract

This paper presents a theoretical and empirical analysis of the impact of financial assistance to farms on crop biodiversity in an uncertain setting. The findings reveal that risk aversion is an important driving force for crop biodiversity conservation. Risk averse farmers can hedge against the uncertainty they face by allocating land to different crop species. However, policies intended to stabilize revenues by supporting particular species may alter this link by delinking crop biodiversity from the management of revenues risk.

Suggested Citation

  • Salvatore Di Falco & Charles Perrings, 2004. "Crop Biodiversity, Risk Management and the Implications of Agricultural Assistance," Working Papers 0084, National University of Ireland Galway, Department of Economics, revised 2004.
    • Handle: RePEc:nig:wpaper:0084
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    File URL: http://www.economics.nuig.ie/resrch/paper.php?pid=96
    File Function: First version, 2004
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    File URL: http://www.economics.nuig.ie/resrch/paper.php?pid=96
    File Function: Revised version, 2004
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