German farmers’ acceptance of subsidized insurance associated with reduced direct payments

The purpose of this paper is to investigate farmers’ acceptance of subsidized whole farm income insurance and single-crop, multi-peril revenue insurance that are associated with a reduction of direct payments

Johannes Möllmann; Marius Michels; Oliver Musshoff

2019

Scholarcy highlights

  • By applying a generalized multinomial logit model on data of a discrete choice experiment, German farmers’ preferences, expressed as their willingness to pay, for whole farm income insurance and revenue insurance are revealed
  • The purpose of this paper is to investigate farmers’ acceptance of subsidized whole farm income insurance and single-crop, multi-peril revenue insurance that are associated with a reduction of direct payments
  • The results show a positive WTP for WFI and RI
  • The average farmer has a higher WTP for WFI than for RI
  • The results suggest that, even if direct payments were abolished in order to subsidize WFI or RI, German farmers’ WTP for both insurance products would remain positive
  • To the authors’ knowledge, this is the first study investigating German farmers’ willingness to pay for whole farm income insurance and revenue insurance using an experimental approach by explicitly considering the partial to complete replacement of direct payments by subsidized insurance

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