Just Accepted Manuscripts
Special Issue 14th AIEAA Conference

Catastrophic adversities and (subsidised) crop insurance markets. Evidence from Italy

pdf accepted
suppl mat
  • Emilia Lamonaca,
  • Irene Maccarone,
  • Fabio G. Santeramo
Emilia Lamonaca
University of Foggia
Irene Maccarone
University of Foggia
Fabio G. Santeramo
University of Foggia and European University Institute
DOI: https://doi.org/10.36253/bae-18389

Published 2026-06-03

Keywords

  • Agriculture,
  • Climatic risk,
  • Extreme event,
  • Risk management,
  • Subsidised insurance

How to Cite

Lamonaca, E., Maccarone, I., & Santeramo, F. G. (2026). Catastrophic adversities and (subsidised) crop insurance markets. Evidence from Italy. Bio-Based and Applied Economics. https://doi.org/10.36253/bae-18389

Copyright (c) 2023 Emilia Lamonaca, Irene Maccarone, Fabio G. Santeramo

Creative Commons License

This work is licensed under a Creative Commons Attribution 4.0 International License.

Crossref
Scopus
Google Scholar
Europe PMC

Abstract

Catastrophic (CAT) weather events are rare and impactful, yet still poorly considered in ex-ante risk management policy interventions. The subsidised crop insurance schemes are not an exception. We study the Italian subsidised crop insurance market and its dynamics vis-à-vis CAT events, including flood, drought, and frost. This knowledge will help designing CAT-related policy interventions. The Italian case study stands out to draw policy recommendations for the EU vision on risk management. We find that insurance uptake is correlated with the occurrence of CAT events. The responsiveness is higher when coverage is predominant, yet the marked differences call for a deeper dive into the mechanics of CAT insurance schemes.

pdf accepted
suppl mat

References

  1. Aglasan, S., Rejesus, R.M., Hagen, S., and Salas, W. ‘Cover crops, crop insurance losses, and resilience to extreme weather events.’, American Journal of Agricultural Economics, (2023) pp. 1-25. DOI: https://doi.org/10.1111/ajae.12431
  2. Agrisole. Emilia Romagna: devastato il 42% dei terreni agricoli, oltre 1,5 miliardi di danni. Il Sole 24 ore, 2023. Available at: https://www.agrisole.ilsole24ore.com/art/ambiente/2023-05-25/emilia-romagna-devastato-42percento-superficie-agricola-oltre-15-miliardi-danni-stimati-174732.php?uuid=AEOpotXD (last accessed 22 July 2025).
  3. Anton, J. and Kimura, S. (2011). Risk management in agriculture in Spain. OECD Food, Agriculture and Fisheries Papers, No. 43, OECD Publishing, Paris.
  4. Boysen, O., Boysen‐Urban, K., and Matthews, A. ‘Stabilizing European Union farm incomes in the era of climate change.’, Applied Economic Perspectives and Policy, 45(3), (2023) pp. 1634-1658. DOI: https://doi.org/10.1002/aepp.13298
  5. Bozzola, M., Lamonaca, E., and Santeramo, F.G. ‘Impacts of climate change on global agri-food trade’, Ecological Indicators, 154 (2023) 110680. DOI: https://doi.org/10.1016/j.ecolind.2023.110680
  6. Bucheli, J., Conrad, N., Wimmer, S., Dalhaus, T., and Finger, R. ‘Weather insurance in European crop and horticulture production’, Climate Risk Management, 100525 (2023). DOI: https://doi.org/10.1016/j.crm.2023.100525
  7. Chavas, J. P. ‘Adverse shocks in agriculture: the assessment and management of downside risk.’ Journal of Agricultural Economics, 70(3), (2019) pp. 731-748. DOI: https://doi.org/10.1111/1477-9552.12312
  8. Citino, L., Palma, A., and Paradisi, M. Dance for the Rain or Pay for Insurance? An Empirical Analysis of the Italian Crop Insurance Market. Mimeo, 2021.
  9. Conley, T. G., and Udry, C. R. ‘Learning about a new technology: Pineapple in Ghana’, American Economic Review, 100(1), (2010) pp. 35-69. DOI: https://doi.org/10.1257/aer.100.1.35
  10. Corte dei Conti (2023). La gestione del fondo i solidarieta’ nazionale. Available at www.corteconti.it.
  11. Deryugina, T., and Kirwan, B. ‘Does the Samaritan’s dilemma matter? Evidence from US agriculture’, Economic Inquiry, 56(2), (2018) pp. 983-1006. DOI: https://doi.org/10.1111/ecin.12527
  12. Diakakis, M. ‘Rainfall thresholds for flood triggering. The case of Marathonas in Greece.’, Natural Hazards, 60, (2012) pp. 789-800. DOI: https://doi.org/10.1007/s11069-011-9904-7
  13. Diffenbaugh, N.S., Davenport, F.V., Burke, M. ‘Historical warming has increased US crop insurance losses’, Environmental Research Letters, 16(8), (2021) 084025. DOI: https://doi.org/10.1088/1748-9326/ac1223
  14. Dolan, A. H., Smit, B., Skinner, M. W., Bradshaw, B., and Bryant, C. R. ‘Adaptation to climate change in agriculture: evaluation of options’, Occasional paper, 26, (2001).
  15. Di Falco, S., Adinolfi, F., Bozzola, M., and Capitanio, F. ‘Crop insurance as a strategy for adapting to climate change’, Journal of Agricultural Economics, 65(2), (2014) pp. 485-504. DOI: https://doi.org/10.1111/1477-9552.12053
  16. European Commission (2025). A Vision for Agriculture and Food. Shaping together an attractive farming and agri-food sector for future generations. Available at: eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:52025DC0075 (Accessed: 31 March 2025).
  17. Faust, E. and Herbold, J. Spring frost losses and climate change – Not a contradiction in terms. Munich RE, 2018. Available at: https://www.munichre.com/topics-online/en/climate-change-and-natural-disasters/climate-change/spring-frost-losses-climate-change-2018.html (last accessed 16 June 2023).
  18. Foster, A. D., and Rosenzweig, M. R. ‘Learning by doing and learning from others: Human capital and technical change in agriculture’, Journal of Political Economy, 103(6), (1995) pp. 1176-1209. DOI: https://doi.org/10.1086/601447
  19. Goodwin, B.K. ‘An empirical analysis of the demand for multiple peril crop insurance’, American Journal of Agricultural Economics, 75(2), (1993) pp. 425-434. DOI: https://doi.org/10.2307/1242927
  20. IPCC (2023). Summary for Policymakers. Climate Change 2023. Working Group Contribution to IPCC Sixth Assessment Report: Climate Change 2023 (Geneva, 2013).
  21. ISMEA. Rapporto sulla gestione del rischio in agricoltura 2020. ISMEA, 2020. Available at: https://www.ismea.it/flex/cm/pages/ServeBLOB.php/L/IT/IDPagina/11025 (last accessed 11 July 2023).
  22. ISMEA (2022). Risk management in Agriculture. Available at: www.ismea.it
  23. ISMEA. Il Fondo Mutualistico Nazionale per la copertura dei danni catastrofali Rapporto ISMEA sull’attività di sperimentazione 2022. ISMEA, 2023. Available at: https://www.ismea.it/flex/cm/pages/ServeBLOB.php/L/IT/IDPagina/12034 (last accessed 11 July 2023).
  24. Jensen, N. D., Mude, A. G., and Barrett, C. B. ‘How basis risk and spatiotemporal adverse selection influence demand for index insurance: Evidence from northern Kenya.’, Food Policy, 74, (2018) pp. 172-198. DOI: https://doi.org/10.1016/j.foodpol.2018.01.002
  25. Landry, C. E., Turner, D., and Petrolia, D. ‘Flood insurance market penetration and expectations of disaster assistance’, Environmental and Resource Economics, 79(2), (2021) pp. 357-386. DOI: https://doi.org/10.1007/s10640-021-00565-x
  26. Liu, Y., and Ramsey, A. F. ‘Incorporating historical weather information in crop insurance rating.’, American Journal of Agricultural Economics, 105(2), (2023) pp. 546-575. DOI: https://doi.org/10.1111/ajae.12329
  27. Ma, M., Wang, H., Yang, Y., Zhao, G., Tang, G., Hong, Z., Clark III, R.A., Chen, Y., Xu, H., and Hong, Y. ‘Development of a new rainfall‐triggering index of flash flood warning‐case study in Yunnan province, China’, Journal of Flood Risk Management, 14(1), e12676, (2021). DOI: https://doi.org/10.1111/jfr3.12676
  28. Rogna, M., Schamel, G., and Weissensteiner, A. ‘Modelling the switch from hail insurance to antihail nets’, Australian Journal of Agricultural and Resource Economics, 67(1), (2023) pp. 118-136. DOI: https://doi.org/10.1111/1467-8489.12499
  29. Santeramo, F.G. ‘I learn, you learn, we gain experience in crop insurance markets’, Applied Economic Perspectives and Policy, 41(2), (2019) pp. 284-304. DOI: https://doi.org/10.1093/aepp/ppy012
  30. Santeramo, F. G., Goodwin, B. K., Adinolfi, F., and Capitanio, F. ‘Farmer participation, entry and exit decisions in the Italian crop insurance programme’, Journal of Agricultural Economics, 67(3), (2016) pp. 639-657. DOI: https://doi.org/10.1111/1477-9552.12155
  31. Santeramo, F. G., Russo, I., and Lamonaca, E. (2022) ‘Italian subsidised crop insurance: what the role of policy changes.’ Q Open, 3(3), 1-20. DOI: https://doi.org/10.1093/qopen/qoac031
  32. Severini, S., Biagini, L., Buttinelli, R., Cortignani, R., Perelli, C., Scarinci, S., Senni, S., Silici, L., Waring, T., Zinnanti, C., Trestini, S., Giampietri, E., Stiletto, A., Raffaelli, R., Cerroni, S., Rippo, R., Santeramo, F.G., Lamonaca, E., Maccarone, I., Arata, L., Boccaletti, S., Casati, M., Castellari, E., and Sckokai, P. (2025). Towards a Holistic Approach to Sustainable Risk Management in Agriculture. ISBN: 9791221099126
  33. Shapley, L. A Value for n-person Games. H.W. Kuhn, A.W. Tucker (Eds.), Contributions to the Theory of Games, Princeton University Press, Princeton (1953). DOI: https://doi.org/10.1515/9781400881970-018
  34. Smit, B., McNabb, D., and Smithers, J. ‘Agricultural adaptation to climatic variation’, Climatic Change, 33(1), (1996) pp. 7-29. DOI: https://doi.org/10.1007/BF00140511
  35. Tappi, M., Carucci, F., Gatta, G., Giuliani, M.M., Lamonaca, E., Santeramo, F.G. ‘Temporal and design approaches and yield-weather relationships’, Climate Risk Management, 40, (2023) 100522. DOI: https://doi.org/10.1016/j.crm.2023.100522
  36. Turner, D., and Tsiboe, F. ‘The crop insurance demand response to the Wildfire and Hurricane Indemnity Program Plus’, Applied Economic Perspectives and Policy, 44(3), (2022) pp. 1273-1292. DOI: https://doi.org/10.1002/aepp.13314
  37. Wang, R., Rejesus, R.M., and Aglasan, S. ‘Warming temperatures, yield risk and crop insurance participation.’, European Review of Agricultural Economics, 48(5), (2021) pp. 1109-1131. DOI: https://doi.org/10.1093/erae/jbab034
  38. Yu, J., and Goh, G. ‘Estimating temperature impacts on perennial crop losses in California: Insights from insurance data.’, Applied Economic Perspectives and Policy, 44(3), (2022) pp. 1409-1423. DOI: https://doi.org/10.1002/aepp.13222
  39. Yu, J., Sumner, D. A., and Lee, H. ‘Premium rates and selection in specialty crop insurance markets: Evidence from the catastrophic coverage participation.’ Food Policy, 101, (2021) 102079. DOI: https://doi.org/10.1016/j.foodpol.2021.102079

Most read articles by the same author(s)