Potential impacts of the Common Agricultural Policy's Income Stabilisation Tool on farmers' incomes and crop diversity: A French case study

Impacts potentiels de l'Outil de Stabilisation du Revenu de la Politique Agricole Commune sur les revenus des agriculteurs et la diversité des cultures: une étude de cas française

Kamel Louhichi and Daël Merisier
Additional contact information
Daël Merisier: UMR PSAE - Paris-Saclay Applied Economics - AgroParisTech - Université Paris-Saclay - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement

Post-Print from HAL

Abstract: This paper analyses the potential impacts of a hypothetical implementation of the Income Stabilisation Tool (IST) in France for the field crops sector. The IST is a risk management tool available within the 2014–2020 Common Agricultural Policy (CAP) to support farmers facing a severe drop in their incomes. This analysis was conducted using a farm‐level model relying on expected utility theory and based on positive mathematical programming with risk. The model was applied to a sample of 1375 field crop farms in France derived from Farm Accountancy Data Network (FADN) data. Simulation results show that the uptake rate of the tool is relatively low, less than 37% in all scenarios. It is strongly dependent on CAP public support and on how much premium farmers have to pay. Highest uptake rates are observed in farms specialising in Other Field Crops, such as potatoes, pulses and sugar beet, and farms located in regions highly exposed to climatic risks. Previous experience with insurance favours the acceptance of the IST. Model results also show that the IST improves adopters' income and reduces income inequality. However, its impacts on crop diversity, measured by the Shannon index, are negative.

Keywords: agricultural risk management; common agricultural policy; crop diversity; farm-level model; France; income stabilisation tool; mutual fund (search for similar items in EconPapers)
Date: 2024
References: Add references at CitEc
Citations:

Published in Journal of Agricultural Economics, 2024, 75 (2), pp.716-739. ⟨10.1111/1477-9552.12581⟩

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
Journal Article: Potential impacts of the Common Agricultural Policy's Income Stabilisation Tool on farmers' incomes and crop diversity: A French case study (2024)
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:hal:journl:hal-04530407

DOI: 10.1111/1477-9552.12581

Access Statistics for this paper

More papers in Post-Print from HAL
Bibliographic data for series maintained by CCSD ().