The demand for crop insurance: Combined approaches for France and Italy

The demand for crop insurance:
Combined approaches for France and Italy
The aim of this paper is to understand which factors affect crop insurance decision in France and in Italy. These neighbor countries are characterized by a changing insurance system from a public fund to private policies which are highly subsidized. Despite the stakes related to crop insurance - CAP reform, size of the market, implication of the governments -, few studies have been drawn on this topic. The literature in finance and in agricultural economics allows to build a two-stage empirical model which computes the elasticities of demand for crop insurance, and to define its key determinants. It appears that France and Italy present similar insurance systems in terms of products and of ability to indemnify. However, the farmers' sensitivity to insurance is most contrasted across the Alps. This leads to a discussion about the creation of an insurance market at the European scale.
The management of risk in agriculture and the role of insurance long have been the centre of attention for researchers and policymakers. A review of the literature on the subject consistently shows the failure of private markets for comprehensive (multiperil) agricultural insurances and their unsustainability in the absence of any public intervention. Even with strong public support, insurance demand is not often as high as could be expected.
Reasons for such failures are usually found in either supply or demand conditions. On the supply side, the most explored issues are asymmetric and incomplete information (Chambers 1989; Miranda 1991; Mahul 1999; Just, Calvin and Quiggin 1999; Bourgeon and Chambers, 2003), with the resulting problems of adverse selection, moral hazard and systemic risk. This may pose the most serious obstacle to the emergence of an independent private comprehensive crop insurance industry. Especially due to the systemic character of yield risks, reinsurance becomes very expensive. Without government subsidies or public reinsurance, insurers pass this high cost to the farmers’ premiums (Doherty and Dionne 1993; Miranda and Glauber 1997; Mahul 2001).
On the demand side, the inability of farmers to assess precisely the benefits derived from agricultural insurances is often cited as one possible reason for limited demand. Another explanation for the limited interest in multiperil crop insurance is simply that the organizational structure of farming is such that farmers can use other private instruments - such as product diversification, credit, financial markets, and so on - to manage risk and therefore that the potential demand for crop insurance is lower than commonly believed. We can also consider that massive government intervention in developed countries may also crowd out private markets.

Moliya va qishloq xo'jaligi iqtisodiyotiga oid adabiyotlar qishloq xo’jaligi mahsulotlarini sug'urtalashga bo'lgan talabning egiluvchanligini hisoblaydigan ikki bosqichli empirik modelni yaratish va uning asosiy determinantlarini aniqlash imkonini beradi.

Qishloq xo'jaligida risklarni boshqarish va sug'urtaning roli uzoq vaqtdan beri tadqiqotchilar va siyosatchilarning diqqat markazida bo'lib kelgan. Ushbu mavzu bo'yicha adabiyotlarni ko'rib chiqish doimiy ravishda qishloq xo'jaligini keng qamrovli sug'urtalash uchun xususiy bozorlarning muvaffaqiyatsizligini va hech qanday davlat aralashuvi bo'lmaganda ularning barqaror emasligini ko'rsatadi. Kuchli davlat tomonidan qo'llab-quvvatlansa ham, sug'urta talabi kutilgan darajada yuqori emas.
Odatda agrosug’urta xizmatlari sotuvining muvaffaqiyatsizgi bozor muvozanati sharoitida talab va taklifning mos emasligi yoki bir-birini to’ldira olmasligidadir. Taklif jihatidan eng ko'p o'rganilgan muammolar assimetrik va to'liq bo'lmagan ma'lumotlar natijasida tizimli risklarning mavjudligidir. Bu mustaqil xususiy sug'urta sohasining paydo bo'lishi uchun eng jiddiy to'siq bo'lib hisoblanadi. Ayniqsa, daromadlilik risklarining tizimli xususiyati tufayli qayta sug'urtalash juda qimmatga tushadi. Davlat subsidiyalarisiz yoki davlat qayta sug'urtasisiz sug'urtachilar o’zlarining yuqori xarajatlarini fermerlar to’laydigan sug’urta mukofotlariga o'tkazadilar.
Talab tomonida, fermerlarning qishloq xo'jaligi sug'urtasidan olinadigan foydani aniq baholay olmasligi ko'pincha cheklangan talabning mumkin bo'lgan sabablaridan biri sifatida tilga olinadi. Ko'p xavf-xatarli o'simliklarni sug'urtalashga qiziqishning cheklanganligining yana bir izohi shundan iboratki, fermer xo'jaligining tashkiliy tuzilishi shundayki, fermerlar xavfni boshqarish uchun mahsulotlarni diversifikatsiya qilish, kredit, moliyaviy bozorlar va boshqalar kabi boshqa xususiy vositalardan foydalanishlari mumkin. ekinlarni sug'urtalash uchun potentsial talab odatda ishonilganidan past. Rivojlangan mamlakatlarga davlatning ommaviy aralashuvi xususiy bozorlarni ham siqib chiqarishi mumkinligini ham hisobga olishimiz mumkin.