Income insurance as a tool for the stabilization of farm income: An application in the Spanish olive oil sector

María Bielza Díaz-Caneja

Spain

Universidad Politécnica de Madrid

Dep. de Economía y CC. SS. Agrarias
U. Politécnica de Madrid.

Alberto Garrido Colmenero

Spain

Universidad Politécnica de Madrid

Dep. de Economía y CC. SS. Agrarias
U. Politécnica de Madrid.

José Mª Sumpsi Viñas

Spain

Universidad Politécnica de Madrid

Dep. de Economía y CC. SS. Agrarias
U. Politécnica de Madrid.

Submitted: 2016-03-07

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Accepted:

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Published: 2011-10-23

DOI: https://doi.org/10.7201/earn.2002.01.02
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Keywords:

agricultural insurance, revenue insurance, agricultural policy

Supporting agencies:

Convenio específico de colaboración entre la Entidad Estatal de Seguros Agrarios

del M.A.P.A. y la E.T.S.I. Agrónomos

de la UPM

para la realización de un estudio sobre la Viabilidad de los Seguros de Ingresos Agrarios en España (2000-2001).

Abstract:

This paper analises a set of revenue stabilisation policies for Spanish olive oil growers, including yield and revenue insurance schemes. In theory and under certain assumptions, revenue insurance provides cheaper revenue stabilisation than a combination of price and yield insurance. After reviewing several revenue insurance experiences, an application is developed to compare various policies that include the actual production aid, tree aid, yield insurance and revenue insurance. The comparison is made taking into account the efficacy of public expenditure’s efficiency and the risk reduction potential. Results do not back the assertion that a revenue insurance scheme would be a superior policy than the current policy, that includes a production aid and yield insurance. It is shown that revenue insurance requires less reinsurance protection than yield insurance, making it cheaper on relative terms. Lastly, the analyses at provincial level show that the results of each studied policy are sharply different based on the risks and productivity that characterise each province.
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