Economic performance and risk of farming systems specialized in perennial crops: An analysis of Italian hazelnut production
Abstract Assessing farm profitability and economic risk is important to support farmers' decisions. Several factors affect yields and product prices, in turn influencing farmers' income level and economic risk. However, the literature has often neglected to explicitly account for the role of product quality. This is particularly important for crops such as hazelnut because farmers' prices vary according to the quality of the harvested product. Furthermore, it seems fundamental to disentangle the role of parameters influencing farm results, noticeably yield, product price and quality. This is because farmers select their risk management tools to satisfy their needs, but these are often suita…
EU income stabilization tool: potential impacts, financial sustainability and farmer’s risk aversion
AbstractThe Income Stabilization Tool, a risk management scheme introduced within the Common Agricultural Policy (CAP) 2014–2020, could help European Union farmers manage the income risks they face. This study assesses the potential impact of implementing this tool through the maximum level of contribution to the fund which determines an indifference to participate in the fund and its financial sustainability. The study relies on an expected utility approach and assesses the variability of loss ratios over time using a sample of Italian hazelnut farms as a case study. The participation depends on the level of farmers' contributions and their degree of risk aversion. However, the CAP public …