Summary:Since agricultural production takes place under the open sky and it is largely unprotected, the risk of occurrence of some harmful event (hail, flood, drought, cold, storm, fire, etc.) increases. In addition to natural and climatic factors, financial, market and institutional factors have a strong effect on agricultural production. The crop and fruit insurance is certainly the most effective risk management instrument in crop production in the open air. The aim of the paper is to present an entirely new insurance model that began to apply in 2015 in the United States of America. By its application, each farm ensures its expected total revenue that can be endangered by the effects of both natural and climate, as well as market risks, which are manifested through fluctuations in market prices. This way, all crops on the farm are insured from all kinds of risks under just one insurance policy. Analyzed farm has experienced revenue loss due to drought, therefore it has indemnity right in the amount of € 2,500. Premium cost borne by farmer amounts to € 330.

Crop production is largely unprotected and exposed to a great number of production factors. On the other hand, farmers are exposed to fluctuations in the market prices of their products every year, which often has a negative impact on the profits made. There are various risk management measures in plant production, and insurance is certainly one of the most effective instruments. One of the recent insurance models is Whole-Farm Revenue Insurance (WFRP), which is an American insurance model that has been applied since 2015. The essence of WFRP is to ensure that all crops on the farm are secured against production and market risks with only one policy. The aim of the research in this paper is to present WFRP as an entirely new model of revenue insurance on the example of a typical Serbian farm specializing in crop production. The WFRP model works by determining the insured revenue before the start of the production year. If at the end of the production year, for any reason, the realized revenue falls below the level of insured revenue, the farmer is entitled to indemnification. Due to the drought that hit the region where the analyzed farm is located, the yields were reduced, and thus the expected revenue was also reduced, and the farmer was entitled to damages of $5697. On the other hand, it is the farmer’s obligation to pay $373 to the insurer as a risk transfer fee. The authors proved that even such complex insurance models can be applied in countries such as Serbia, where awareness of the importance of insurance of agricultural production is still not developed.

SummaryRevenue insurance represents a new risk management tool in agriculture, based on the difference between the guaranteed and actual revenue of the entire farm or some production. Most commonly, crops that have a significant share in the structure of planting or significant yield are insured with the application of this tool. Mercantile corn is the most important field crop in Serbia, and climatic conditions and price changes have a huge impact on its production. As one of the aspects of struggle with volatility of revenues there is a possibility to insure the corn revenue, by concluding the insurance agreement. However, the revenue insurance is very slightly applied in the world, while in our country in recent years is in its infancy. This paper analyzes the economic and legal aspects of the insurance model in order to determine the basic mechanisms of its functioning, as well as the conditions that must be fulfilled so that conclusion of the agreement would have an economic justification for both parties (farmers and financial institutions).It also examines the normative framework for the conclusion of this agreement and stresses the differences relative to the classic insurance contract.

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Summary:Regional index insurance is one of the newer instruments for reducing losses in crop production. The regional index indicates the average yield or average production value in a region, representing the basis for the premium calculation and insurance benefits. The main advantage of this insurance model is that it does not require the damage assessment, which is one of major problems in the relationship between the insured and insurer. In the case of corn, wheat and sunflower production as the most important crops in the region of Ada municipality, the authors describe the methodology of application of the analysed insurance system. Implementation of this contemporary form of insurance in Serbia would reduce the negative financial consequences in agricultural production. The abovementioned model of insurance can be seen as a significant alternative to conventional insurance, which can increase insured area and number of insured, and trust and confidence in insurance companies would also be restored.