Is there a relationship between the prevailing model of agriculture and the structure of the crop and livestock insurance markets?

Soliwoda, Michał and Špička, Jindřich and Vilhelm, Václav and Pawłowska-Tyszko, Joanna and Gorzelak, Aleksander (2017): Is there a relationship between the prevailing model of agriculture and the structure of the crop and livestock insurance markets? Studies in Agricultural Economics, 119 (2). pp. 77-84. ISSN 2063-0476

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Abstract

Given the strong dependence of its economic results on natural factors, agriculture is characterised by high exposure to risk. This paper explores the relationship between the prevailing ‘model of agriculture’ in a country and methods of risk management (in particular, insurance schemes). The Czech Republic and Poland are post-socialist countries which are characterised by different models of agricultural development. While agriculture in the Czech Republic is oriented to industrial farming with large farms, Polish agriculture has a bipolar structure that includes both small, family-owned farms and large agricultural holdings. Various approaches to agricultural insurance schemes may arise from the contrasting models of agriculture, and substantial differences in both the demand and supply sides of the crop and livestock insurance markets indicate different policy approaches to the role of agriculture in the economies of the two countries. In both the Czech Republic and Poland, policy options for farm risk management should consider the balance between budget flexibility and the criterion of efficiency (from the perspective of insurers).

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