Abstract

European common agricultural policy (CAP) reforms, in the pillar 2, increase the importance of agricultural risk management as a means to stabilize farm household incomes. The one considered in this paper, the Income stabilization tool (IST), consists in providing co-financing support to mutual funds compensating farmers who experience a severe drop in their farm income. The strategic objective of the research is to analyse the potential of IST for the Marche Region in Italy. Income losses and consequent fundings are quantified elaborating individual farm data (FADN-RICA) in 2010. The results of the analysis show the relation between commodities price volatility and the increasing risk exposure. For public and private stakeholders analyses and reflections can be used in debating the domain of policy reforms, risk exposure and risk management in Italian agriculture.

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