The demand for public–private crop insurance and government disaster relief

Liesivaara, Petri; Myyrä, Sami

doi:10.1016/j.jpolmod.2016.12.001

Cited by 37 publications

(27 citation statements)

References 21 publications

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“…(3) subsidization of IST complies with WTO green-box requirements; (4) it can also cover systemic risks (specifically price risk) that are not covered by purely commercial insurances thus hampering the principles of risk pooling, (5) it is based on a public-private partnership (e.g., Bardají and Garrido, 2016;El Benni et al, 2016, Mary et al, 2013, Meuwissen et al, 2003, 2008Liesivaara and Myyrä 2016a).…”

Section: Background On the Functioning Of The Ist And Its Impact On Fmentioning

confidence: 99%

Effects of the Income Stabilization Tool on farm income level, variability and concentration in Italian agriculture

2019

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This paper provides an ex ante assessment of the effects of the Income Stabilization Tool (IST), a new risk management tool proposed in the Common Agricultural Policy of the European Union. We investigate the effects of IST on income variability and levels as well as on income inequality in the farming population. We take Italian agriculture as an example as the introduction of IST is currently under discussion there. A rich panel of 2777 farms was studied over a period of 7 years. We use stochastic simulation to derive different income inequality estimates and apply Gini decomposition approaches to assess the distributional implications of IST. We compare the current income situation with that resulting from a hypothetical implementation of IST under different policy scenarios, also accounting for reduced levels of CAP direct payments. We find that IST not only stabilizes farm income but also enhances its level and reduces income inequality in Italian agriculture. IST is more effective in reducing income inequality when farmers pay contributions to mutual funds that are proportional to their income compared to the case of flat rate contributions. Finally, results do not support the hypothesis that the impact of IST will differ if the level of direct payments were to be reduced. Thus, results seem robust enough to accommodate future policy conditions.

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Section: Background On the Functioning Of The Ist And Its Impact On Fmentioning

confidence: 99%

Effects of the Income Stabilization Tool on farm income level, variability and concentration in Italian agriculture

2019

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“…Thus, the government needs to further expand the category and scope of forestry subsidies [26][27][28]. Some scholars analyzed how to improve the subsidy efficiency of forest insurance and found that a single increase in the proportion of insurance subsidies can indeed enhance the willingness of forest owners to purchase insurance, but it also leads to the poor efficiency of subsidy [29][30][31]. The effective insurance needs, types of disasters, development level of the insurance industry, and dependence on subsidies in different areas vary highly.…”

Section: Introductionmentioning

confidence: 99%

Strategies of Forestry Carbon Sink under Forest Insurance and Subsidies

Song

Peng

2019

Sustainability

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We take the forest insurance supply chain, composed of a forestry enterprise and an insurance company, as the research object. The forestry carbon sink, operated by the forestry enterprise, is the subject matter of insurance. The Stackelberg game model is constructed to study the optimal strategies of the forestry enterprise and insurance company under the forest insurance mechanism, as well as the impact of government subsidies, probability of deforestation, and carbon limit level on the decision-making and profit of the forestry enterprise and insurance company. The results show that the larger the carbon limit, the looser carbon restraint policy, which causes the forestry enterprise to reduce the scale of carbon sink forest, and the insurance company lowers the premium level. As the probability of deforestation increases, both the scale of the carbon sink forest and the premium level will decrease. Direct subsidies for the premiums of the forestry enterprise are conducive to expanding the scale of carbon sink forest, but will lead to the insurance company improving the premium level. Providing indirect subsidies to the insurance company’s operating costs will not only expand the scale of the carbon sink forest, but also lower the premium level. In the case of the same number of premium subsidies, indirect subsidies are more effective than direct subsidies in increasing the forestry enterprise’s income and promoting it to expand the forest scale.

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“…Recently there have been some limited efforts to estimate insurance demand using nonmarket valuation methods, such as the contingent valuation method (CVM) or DCEs. Liesivaara and Myyrä (2017) conducted a split sample DCE to include disaster aid as a constant variable in estimating WTP for different attributes of a crop insurance product in Finland. They found that expectations of disaster relief meant farmers would be less worried about crop losses.…”

Section: The Problem Of Insurance Demandmentioning

confidence: 99%

“…The Liesivaara and Myyrä (2017) study evaluates attributes of an insurance product, but the relevance of the insights is largely limited to the EU context. Moreover, the focus has been on interaction with co‐risk mitigation options.…”

Section: The Problem Of Insurance Demandmentioning

confidence: 99%

Demand for Crop Insurance in Developing Countries: New Evidence from India

Ghosh¹,

Gupta²,

Singh³

et al. 2020

J Agricultural Economics

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Determining farmers’ real demand for crop insurance is difficult, especially in developing countries, where there is a lack of formal financial sector integration and a high reliance on informal risk mitigation options. We provide some new estimates of farmers’ willingness‐to‐pay for insurance in the context of a large‐scale subsidised programme in India. We conducted a discrete choice experiment with agricultural households across four states in India, enabling us to estimate preferences for specific insurance policy attributes such as coverage period, method of loss assessment, timing of indemnity payments and the cost of insurance. Our results suggest that farmers do value crop insurance under certain conditions and some are willing to pay a premium for such coverage in excess of the subsidised rates they are currently required to pay under this programme. In particular, farmers value the assurances that they will receive timely payouts when they incur losses, and may not have a strong preference for the method with which losses are assessed. On the other hand, farmers are quite sensitive to coverage periods. Our baseline assessment shows that when optimised to farmer requirements, there can be a sizeable demand for crop insurance by developing country farmers.

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The demand for public–private crop insurance and government disaster relief

Cited by 37 publications

References 21 publications

Effects of the Income Stabilization Tool on farm income level, variability and concentration in Italian agriculture

Effects of the Income Stabilization Tool on farm income level, variability and concentration in Italian agriculture

Strategies of Forestry Carbon Sink under Forest Insurance and Subsidies

Demand for Crop Insurance in Developing Countries: New Evidence from India

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