The Importance of Improving and Enlarging the Scope of Risk Management to Enhance Resilience in European Agriculture

Finger, Robert; Vroege, Willemijn; Spiegel, Alisa; Mey, Yann de; Slijper, Thomas; Poortvliet, P. Marijn; Urquhart, Julie; Vigani, Mauro; Nicholas‐Davies, Phillipa; Soriano, Bárbara; Garrido, Alberto; Severini, Simone; Meuwissen, M.P.M.

doi:10.1017/9781009093569.003

Cited by 3 publications

(12 citation statements)

References 48 publications

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“…Overall, our research contributes to the wide debate on cooperation and mutual exchange of risk that is currently taking place in the EU agricultural sector (Finger et al, 2022). In our globalised and interconnected economy, farmers' ability to share efforts and cooperate towards the achievement of long-term goals becomes crucial to tackle current and future global challenges related to climate change, public health emergencies and conflicts due to a high geo-political instability.…”

Section: Conc Lusionsmentioning

confidence: 86%

“…Farmers can adopt a wide range of risk management tools and strategies to cope with risk and uncertainties related to production, market and financial outcomes (Cordier & Santeramo, 2020; Finger et al, 2022; Meuwissen et al, 2018; Moschini & Hennessy, 2001). An instrument offered to European farmers under the Common Agricultural Policy (CAP) is the Income Stabilisation Tool (IST) that aims at stabilising farm income over time by providing compensation for severe falls in income due to any type of adverse event (e.g., production losses, market crisis or prices variations) (EC, 2011).…”

Section: Introductionmentioning

confidence: 99%

“…Although our analysis refers to a specific region in Italy and a sector specific IST, it contributes to the ongoing debate on agricultural risk management that is taking place at the EU level. An important topic within this debate, that is stimulated by the development of the new CAP 2023–2027, is the role of cooperation and mutual exchange of risk in coping with global and long‐term challenges (Finger et al, 2022). First, our paper offers evidence on the acceptance of the only operating IST scheme in the whole of Europe.…”

Section: Introductionmentioning

confidence: 99%

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Farmers' participation in the Income Stabilisation Tool: Evidence from the apple sector in Italy

Rippo

Cerroni

2022

J Agricultural Economics

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The Income Stabilisation Tool (IST), which was recently added to the European Common Agricultural Policy's risk management toolkit, is a mutual fund that aims at stabilising farmers' income. We investigate the drivers of farmers' participation in an IST for the apple sector in the Autonomous Province of Trento in Italy, which is the only region that has operationalised the IST in the European Union. Our analysis is based on a theoretical framework based on the Unified Theory of Use and Acceptance of Technology. Using a three‐year panel dataset of 3268 farm households, we estimated a logit model with the Mundlak–Chamberlain procedure. Our results show that higher crop production specialisation, associated with greater risk exposure, favours participation in the IST. Similarly, previous experience with mutual funds increases the acceptance of the IST. The analysis also provides evidence of how the new tool interacts with existing on‐farm protection strategies, leading to a discussion of the presence of adverse and advantageous selection effects. Our paper sheds light on farmers' acceptance of newly implemented sector‐specific ISTs and generates better knowledge and understanding of lock‐ins and levers that influence participation in such schemes, which are relevant to other EU regions or member states that are considering the introduction of ISTs.

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Section: Conc Lusionsmentioning

confidence: 86%

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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Farmers' participation in the Income Stabilisation Tool: Evidence from the apple sector in Italy

Rippo

Cerroni

2022

J Agricultural Economics

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“…Čop et al (2023) found that subjective probabilities are important predictors of farmers' decisions to enrol on a sector-specific IST related to grapevine. Fezzi et al (2021) found that farmers' subjective probabilities regarding production losses due to extreme climatic events are not in line with objective measures of risk. Hence, policy interventions geared to reduce this gap could have important policy implications regarding insurance subsidization.…”

Section: Behavioural Factors Influencing Farmers' Adoption Of Risk Ma...mentioning

confidence: 87%

“…Non-standard economic theories, such as prospect theory, explain farmers' choice behaviour more parsimoniously (e.g., Babcock, 2015;Dalhaus et al, 2020;Feng et al, 2021). These empirical findings determined the development of a small but growing research that investigates the extent to which behavioural factors such as farmers' probabilistic beliefs, probability weighting, risk and uncertainty preferences, and loss aversion influence farmers' decisions to purchase an insurance product (e.g., Fezzi et al, 2021) and participate to mutual funds (Rippo and Cerroni, 2023;Čop et al, 2023). These behavioural factors are generally elicited using experimental methods, while their ability to explain and predict farmers' choice behaviour is tested by combining data from economic experiments with primary data obtained using stated preference surveys or available secondary data on actuarial farmers' purchasing decisions (Iyer et al, 2019).…”

Section: Behavioural Factors Influencing Farmers' Adoption Of Risk Ma...mentioning

confidence: 99%

Towards a holistic approach to sustainable risk management in agriculture in the EU: a literature review

Arata,

Cerroni,

Santeramo

et al. 2023

BAE

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Agriculture is one of the sectors most exposed to a plethora of risky phenomena such as weather, pests and diseases, changes in prices and government policies, instability of global markets. We review the literature on risk management (RM) in agriculture focusing on five key issues: i) why evidence on RM is often controversial; ii) how farmers behave in selecting among available RM instruments; iii) why some of these instruments are underutilised; iv) how to assess the impacts of innovative RM tools to (further) improve their design; v) how agricultural policy measures aimed at increasing the environmental sustainability of the sector could affect RM choices. We address all these issues to get a holistic vision of RM, and point at areas where further analyses are needed.

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Risk Management Tools in the Agriculture Sector: an Updated Bibliometric Mapping Analysis

García-Machado,

Greblikaitė,

Iranzo Llopis

2024

SRSD

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PURPOSE: The aim of this paper is to analyse the latest research carried out to identify the risk management tools that farmers should possess to be effective and achieve success in their businesses. To this end, a review of the literature was conducted through the most relevant subjects, categories, countries, journals, and cited authors and articles, as well as visualising the interrelations through the co-occurrence of key terms. DESIGN/METHOD: A systematic review of the literature and a bibliometric mapping of the publications in- dexed in the Web of Science Core Collection (WoSCC) and Scopus was conducted using VOSviewer soft- ware. During the search process, 472 references from WoSCC and 704 from Scopus databases, for a search period from 2014 to 2023, were obtained. After a thorough reviewing process, the final number was 100 articles collected in 74 journals and written by 320 authors for WoSCC; and 136 articles, 90 journals and 435 authors for Scopus. RESULTS/FINDINGS: Our study indicates that farmers’ risk management requires the acquisition of knowledge of risk management tools, specifically differentiating between on-farm and off-farm instruments, and the training competences necessary for their implementation which are acquired both through their business management and others developed during the work in the crops, farming and agroindustry. Based on co-occurrence frequencies of key terms, several term maps provide visual representations of the latest research in the Agricultural Risk Management Tools (ARMT) and, more specifically, of the grouping around five main clusters, namely Strategy Decisions on Adaptation to Climate Change, Risk Impacts on Agricultural Production, Attitudes towards Risk Management Tools, Agricultural Policy and Risk Management, and Farms Management Systems and Models. ORIGINALITY/VALUE: This study contributes to the literature on risk management research and its findings may be useful for farmers, farm managers, agricultural cooperatives, researchers, and decision-makers in agricultural policy. KEYWORDS: risk management tools, agriculture, Common Agricultural Policy (CAP), Income Stabilisation Tool (IST), bibliometric mapping, VOSviewer. JEL: G52, O13, O16, Q12, Q56.

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The Importance of Improving and Enlarging the Scope of Risk Management to Enhance Resilience in European Agriculture

Cited by 3 publications

References 48 publications

Farmers' participation in the Income Stabilisation Tool: Evidence from the apple sector in Italy

Farmers' participation in the Income Stabilisation Tool: Evidence from the apple sector in Italy

Towards a holistic approach to sustainable risk management in agriculture in the EU: a literature review

Risk Management Tools in the Agriculture Sector: an Updated Bibliometric Mapping Analysis

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