Analyzing the Relationship between Agricultural AI Adoption and Government-Subsidized Insurance

Chad Patrick Osorio, Francesca Leucci and Donatella Porrini ()
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Chad Patrick Osorio: Law Group, Wageningen University and Research, 6706 KN Wageningen, The Netherlands
Francesca Leucci: Law Group, Wageningen University and Research, 6706 KN Wageningen, The Netherlands
Donatella Porrini: Department of Cultural Heritage, Università del Salento, 73100 Lecce, Italy

Agriculture, 2024, vol. 14, issue 10, 1-20

Abstract: Due to the increased unpredictability and severity of weather patterns caused by climate change, traditional farming practices and risk management strategies are becoming increasingly inadequate. In this paper, we explore the literature to understand the potential of artificial intelligence (AI) in mitigating climate-related agricultural risks and the pivotal role that public institutions play in encouraging farmers to adopt such technologies. We propose a framework to integrate AI into government-subsidized insurance structures, focusing on reduced premiums through government intervention. We argue that AI’s potential to reduce the uncertainty and severity of climate-induced damages could lower the overall risk profile of insured farmers, thereby justifying lower premiums in the long run. We further discuss the implications of such policies on insurance markets, agricultural sustainability, and global food security. Our initial exploration contributes to the literature by addressing a relatively underexplored intersection of two critical fields—agricultural insurance and artificial intelligence—suggesting directions for future research.

Keywords: agricultural insurance; artificial intelligence; subsidy system (search for similar items in EconPapers)
JEL-codes: Q1 Q10 Q11 Q12 Q13 Q14 Q15 Q16 Q17 Q18 (search for similar items in EconPapers)
Date: 2024
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