EconPapers    
Economics at your fingertips  
 

Crop diversification and the effect of weather shocks on Italian farmers' income and income risk

Charlotte Fabri, Sam Vermeulen, Steven Van Passel and Sergei Schaub

Journal of Agricultural Economics, 2024, vol. 75, issue 3, 955-980

Abstract: Agriculture is vulnerable to extreme weather shocks. Climate change increases both the frequency and the intensity of such shocks. To safeguard farmers' income and food production, climate adaptation measures are required. This article aims to examine the effectiveness of crop diversification as an adaptation measure, using Italy as a case study. We apply a control function approach to a panel dataset of 20,790 Italian farms, which considers (i) the crop diversification decision and (ii) the influence of crop diversification on farmers' levels of crop income and income risk. We find that, while specialisation can increase income, crop diversification reduces income risk most effectively when growing four different crops. At this level of diversification, income risk is approximately 29% lower as opposed to monoculture farming. Although the Common Agricultural Policy's greening payments for crop diversification make sense from an ecological and risk‐reducing point of view, we find that they are potentially insufficient to cover the loss of expected crop income from diversification. While crop diversification reduces income risk in general, we find no specific benefit in terms of weather shock‐induced risks. This may be because a price increase following a weather shock buffers its adverse effect. However, identifying the reasons requires further research.

Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://doi.org/10.1111/1477-9552.12610

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:jageco:v:75:y:2024:i:3:p:955-980

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0021-857X

Access Statistics for this article

Journal of Agricultural Economics is currently edited by David Harvey

More articles in Journal of Agricultural Economics from Wiley Blackwell
Bibliographic data for series maintained by Wiley Content Delivery ().

 
Page updated 2025-03-19
Handle: RePEc:bla:jageco:v:75:y:2024:i:3:p:955-980