Crop Insurance as the Instrument for Risk Financing in Polish Farms
Crop Insurance as the Instrument for Risk Financing in Polish Farms

Author(s): Monika Kaczała
Subject(s): National Economy, Business Economy / Management, Micro-Economics, Agriculture
Published by: Masarykova univerzita nakladatelství
Keywords: agricultural insurance; crop insurance; state aid; risk management; financing of risk;
Summary/Abstract: Risk management is one of the main priorities in the Common Agricultural Policy (CAP) for 2014-2020. Crop insurance belongs to the three CAP indicated types of instruments for financing risks, along with mutual funds and income stabilization tool. In Poland crop insurance is the only available instrument and despite its obligatoriness and subsidizing the market penetration amounts to 40%. The aim of this paper is to present development of agricultural insurance in quantitative terms and its main contributory factors. The answers were provided based on the qualitative and quantitative analysis. The data come mainly from the official statistics and information provided by The Ministry of Agriculture and Rural Development. The results show that apart from very high costs of crop insurance, resulting from a long-term loss ratio of more than 100% for , a very important determinant affecting crop insurance purchasing decisions is the subjective assessment of prosperity in agriculture as well as the scope and type of state aid (investment-related benefits are stimulating while revolving loans are inhibitive).

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