Environmental implications of crop insurance subsidies in Southern Italy

Capitanio, Fabian and Adinolfi, Felice and Santeramo, Fabio Gaetano (2015): Environmental implications of crop insurance subsidies in Southern Italy. Forthcoming in: International Journal of Environmental Studies (8 August 2015)

Abstract

The changing environment affects agriculture introducing sources of uncertainty. On the other hand, policies to cope with risks may have strong impacts on the environment. We evaluate the effects of public risk management programmes, such as subsidised crop insurance, fertilizer use and land allocation to crops. We implement a mathematical programming model of a representative wheat-tomato farm in Puglia, a southern Italy region. The results show that under the current crop insurance programmes, tomato productions are expected to expand and to require larger amount of fertilizer, whereas the opposite is true for wheat productions. Policy and environmental implications are discussed.

• Item Type: MPRA Paper
• Language: English
• Keywords: uncertainty, risk, insurance, externalities, multifunctionality, environment
• Subjects: C - Mathematical and Quantitative Methods > C6 - Mathematical Methods ; Programming Models ; Mathematical and Simulation Modeling > C60 - General; D - Microeconomics > D8 - Information, Knowledge, and Uncertainty > D81 - Criteria for Decision-Making under Risk and Uncertainty; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q5 - Environmental Economics > Q51 - Valuation of Environmental Effects; R - Urban, Rural, Regional, Real Estate, and Transportation Economics > R5 - Regional Government Analysis > R58 - Regional Development Planning and Policy

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