Italian subsidised crop insurance: What the role of policy changes

Abstract

AbstractRisk management in agriculture is crucial and policymakers are implementing policy reforms to foster farmers’ adoption of ex-ante risk management tools such as crop insurance: Their effectiveness is the core of policy evaluation exercises. The Italian subsidised crop insurance market has been interested by major reforms in 2013 and 2015. The 2013 reform removed subsidies to the mono-risk insurance contracts, whereas the 2015 reform replaced the multi- and pluri-risks contract schemes with packages, devoted to providing coverage over different sets of adversities, thus altering the framework that has been used for several years. We show that the first reform contributed to the drop in the quantity of insurance purchased, whereas the latter reform has increased the quality of the insurance purchased.