The role of ex ante regulations in addressing problems of moral hazard in agricultural insurance

2002 ◽  
Vol 62 (2) ◽  
pp. 103-116 ◽  
Author(s):  
Calum G. Turvey ◽  
Michael Hoy ◽  
Zahirul Islam
Keyword(s):  
Moral Hazard ◽  
Crop Production ◽  
Insurance Coverage ◽  
Agricultural Insurance ◽  
Agricultural Producers ◽  
Growing Seasons ◽  
Input Use ◽  
The Cost ◽  
Input Level

We develop a theoretical model of input use by agricultural producers who purchase crop insurance, and thus may engage in moral hazard. Through simulations, our findings show a combination of partial insurance coverage and partial monitoring of inputs may reduce substantially the problems associated with moral hazard. The minimum level of input use that must be required by regulation is determined to be substantially lower than the optimal or actual input level chosen by producers. Because the use of inputs for crop production occurs in many stages over the pre‐planting, planting, and growing seasons, only a minimal input requirement is needed. Thus, the cost of implementing such a regulation can be kept much lower than would be the case for a regulation of complete monitoring of input usage.

scholarly journals Factors influencing and dynamics of the agricultural insurance market

VUZF Review ◽  
2021 ◽  
Vol 6 (2) ◽  
pp. 42-49
Author(s):  
Nataliya Tanklevska ◽  
Vitalina Yarmolenko
Keyword(s):  
Crop Production ◽  
Agricultural Sector ◽  
The State ◽  
Insurance Market ◽  
Insurance Companies ◽  
Agricultural Insurance ◽  
Agricultural Producers ◽  
Agricultural Enterprises ◽  
Insurance Sector ◽  
Factors Influencing

The article is aimed at identifying modern features of insurance in the agricultural sector of the Ukrainian economy and defining the factors of influence on the agricultural insurance market. The article discloses interpretation of the terms of «insurance» and «agricultural insurance» and also presents the types of possible risks arising in the activities of agricultural enterprises. The performance indicators of leading insurance companies in the field of agricultural insurance are analyzed. The current state and dynamics of insurance of agricultural risks, which arise both in the field of crop production and in livestock, are researched. This will allow predicting the future prospects of the market for insurance services and products, as well as finding possible optimal ways to solve the problems of product insurance, faced by the agricultural producers. The main factors influencing the efficiency of the insurance market in the agricultural insurance sector are allocated. The basic principles of insurance of agricultural products with the State support are analyzed. It is defined that the further development of agricultural insurance should be directed towards creating a profitable and safe environment for all participants in the agricultural market, which provides for the distribution of risks between agricultural producers, processing enterprises, banks, insurance companies and the State. The agricultural insurance of risks creates possibilities for advantageous harmonizing the interests of participants in the agricultural insurance market and the State as a party whose first priority is to ensure stable economic growth.

scholarly journals The market of agricultural production services in Ukraine

2021 ◽  
Vol 23 (97) ◽  
pp. 3-7
Author(s):  
H. Vyslobodska
Keyword(s):  
Production Process ◽  
Agricultural Production ◽  
Crop Production ◽  
Animal Husbandry ◽  
Technical Equipment ◽  
Agricultural Producers ◽  
Agricultural Enterprises ◽  
Agricultural Enterprise ◽  
Definition Of

The article defines the role of the market of agricultural production services in the process of agricultural production. The works of domestic scientists devoted to the efficiency of agricultural production, services sphere and the market of agricultural production services are analyzed. A number of methods have been selected for this study. The essence of the concepts of production service and the market of agricultural production services is defined. There are established that the volume of use of production services in the agricultural production process depends on the area under crops in crop production and the number of heads in animal husbandry. The dynamics of changes in sown areas and livestock in Ukraine are analyzed. It is determined that all production operations in agriculture are carried out in accordance with the technological maps. The definition of the concept of “technological map” is given. Information on the composition of agricultural production services in the field of crop production is given. It is established that agricultural production services in crop production can be carried out both manually and mechanized. The importance of technical equipment of the agricultural enterprise for the implementation of the production process was showed. The presence of the main types of agricultural machinery in agricultural enterprises of Ukraine and households is analyzed. The peculiarities inherent only in production services in the field of agriculture are highlighted. The dependence of the volumes of production services on the total volumes of sown areas in crop production and animals in animal husbandry were shown. The concept of production outsourcing is defined and its place in the activity of agricultural producers is defined. The results of a sociological survey of consumers of agricultural production services are shown and analyzed.

scholarly journals MECHANISMS OF SUPPORTING INFORMATION MANAGEMENT IN AGRICULTURE

2017 ◽  
Vol 16 (2) ◽  
pp. 23-32
Author(s):  
Michał Cupiał ◽  
Anna Szeląg-Sikora ◽  
Sylwester Tabor
Keyword(s):  
Social Groups ◽  
Agricultural Producers ◽  
Rural Development Programme ◽  
Computer Equipment ◽  
Support Mechanisms ◽  
Professional Information ◽  
The One ◽  
The Cost ◽  
Role Of Information

Considering the aspect of the role of information in the development of Polish agriculture, one should pay attention to the existing needs in this field, as well as to the existing support mechanisms stimulating the activity of the agricultural producers’ community in obtaining professional information in the form of e.g. consulting or the use of the training offered. At the same time, it should be noted that often the barrier in keeping abreast is not the lack of activity on the part of producers, but the cost associated with it. That is why it is so important to initiate actions, which, on the one hand, serve boosting the efforts of agricultural producers to seek professional knowledge (information), and on the other hand, creating the possibility of compensation for costs incurred in this respect. Given the above, the main objective of this paper is the analysis of the level of implementation of the measures implemented under the Rural Development Programme 2007–2013. The study takes into account the farmers’ computer equipment level and access to the Internet compared to other social groups. Analysis of the distribution of funds to each voivodship showed that the allocation of funds was uneven, and this applied to all analysed measures. In the most part, agricultural producers already have the necessary information infrastructure, but its use is insufficient.

scholarly journals Insuring catastrophes and the role of governments

2013 ◽  
Vol 13 (8) ◽  
pp. 2053-2063 ◽  
Author(s):  
M. M. Boyer ◽  
C. M. Nyce
Keyword(s):  
Natural Hazard ◽  
Insurance Coverage ◽  
Insurance Premium ◽  
Policy Implications ◽  
Insurance Market ◽  
Market Model ◽  
Catastrophic Events ◽  
Natural Catastrophes ◽  
The Cost

Abstract. In this paper we model the cost of providing insurance coverage against natural and man-made hazards. We propose an insurance market model that explains (1) the use of reinsurance to help finance the cost of catastrophic events and (2) the implicit (or explicit) presence of government entities acting as (re)insurers of last resort. Using an economic model, we show how insurance programmes should be designed to cover the losses due to a possible catastrophic natural hazard. Our results show that the optimal structure of a reinsurance programme minimizes the cost of offering insurance protection. We also show how government intervention can reduce the cost of insurance against natural catastrophes and increase policyholders' welfare. Our paper therefore offers public policy implications as to the role and presence of government as an insurer of last resort and the minimum insurance premium necessary to cover the cost of catastrophic events.

scholarly journals Evaluation of the Effectiveness of the Digital Transformation of Crop Production of the Pskov Region

2019 ◽  
Vol 62 ◽  
pp. 08005
Author(s):  
I.S. Sandu ◽  
I.P. Voiku
Keyword(s):  
Crop Production ◽  
Information Technologies ◽  
Process Variable ◽  
Production Costs ◽  
Agricultural Producers ◽  
Computer Technologies ◽  
Pskov Region ◽  
Technological Effectiveness ◽  
The Cost

The article deals with the essence and advantages of digitalization – the introduction of digital computer technologies and information presented in digital form into production activities. The cost of economy digitalization and its individual industries is estimated. It is concluded that the decision on digitalization should be justified, supported by the necessary calculations. The article states that the use of computer technologies by Russian agrarians in production processes is the exception rather than the rule. The capacity of crop production as a long-term process, variable in terms of technological effectiveness, structure of operations and costs, for the introduction of advanced information technologies, is estimated. The article presents a description of the place of agriculture in the economy of the Pskov region, the characteristics of the main indicators of crop production. It is concluded that the growth of the gross output of the main types of agricultural products in crop production was largely due to a significant increase in yield index, but the acreage and provision of agricultural machinery in the region continue to decline. The study revealed that the power supply per production unit of agricultural producers combined with the level of digitalization reduce the size and change the structure of production costs. In addition, an assessment of the effect of the introduction of information technology in the chain of formation of the costs of crop production is given. The article describes the sequence of evaluation of the return on investment costs for digitalization of crop production in the Pskov region. The rate of payback due to savings in production costs is estimated at 5 years.

scholarly journals Is irrigation driven by the price of internationally traded agricultural products?

Q Open ◽  
2021 ◽  
Vol 1 (1) ◽  
Author(s):  
Angela Cheptea ◽  
Catherine Laroche Dupraz
Keyword(s):  
International Trade ◽  
Water Resources ◽  
Export Price ◽  
Agricultural Producers ◽  
Trade Regulation ◽  
Irrigated Crops ◽  
International Price ◽  
Using Data ◽  
The Cost

Abstract A recent trend of literature investigates how international trade compensates or accentuates the differences in countries’ endowments in water resources and whether trade regulation should be used to improve the use of water resources at the global level. We develop a simple model establishing a positive link between the demand for irrigation water of agricultural producers and the international price of irrigated crops. Unlike previous works that focus on the cost and scarcity of water resources, we emphasize the role of international trade in the allocation of water resources in agriculture. We test our model empirically using data on 243 irrigated crops exported by 183 countries, and find that countries’ irrigation behavior is strongly linked to the global price of crops. The export price effect is stronger when countries are net exporters of irrigated crops and weaker for cereals that constitute a pillar of most countries’ domestic food security.

scholarly journals On issue of determining the fees for water supply (diversion) to agricultural producers on reclamed land

2021 ◽  
Author(s):  
A. V. Slabunova ◽  
◽  
Yu. E. Domashenko ◽  
Keyword(s):  
Water Supply ◽  
Land Reclamation ◽  
Water Diversion ◽  
Federal State ◽  
Agricultural Producers ◽  
Role Of The State ◽  
Provision Of Services ◽  
Agricultural Producer ◽  
The Cost

Purpose: to analyze the organizational aspects of the charge formation for the provision of services on supply (diversion) of water for agricultural producers and to develop proposals for improving the economic mechanism for calculating the cost of these services. Results: the adoption of the Order of the Ministry of Agriculture no. 79 dated 02.18.2013 significantly strengthened the position of institutions in the validity of the provision of services for water supply (diversion) on a paid basis, creating general conditions throughout the country, which made it possible to ensure uninterrupted water supply in the required volumes to water consumers. However, there are still many questions on this issue. As a result of the research, the priority role of the state in the restoration and stable functioning of the land reclamation complex of the country was determined. The problems associated with the underfunding of state reclamation systems operation and non-compliance with environmental legislation have been identified. Conclusions: proposals regarding the current procedure have been developed: the conclusion of two contracts if necessary (both for water supply and diversion) between the FGBU on land reclamation and the water consumer; the imposing of costs associated with penalties in case of exceeding the permissible discharge of pollutants on the agricultural producer in the contract for water diversion; the inclusion of costs for compensation of harm caused to aquatic biological resources as a result of activities for the water supply (withdrawal) resources in the costs of providing services for water supply (diversion); differentiation of formulas for calculating the cost of services for the supply (diversion) of water to agricultural producers on irrigated lands and other consumers not for the purposes of agricultural production. It is necessary to amend the charters of the Federal State Budgetary Institution on Land Reclamation, providing for the attribution of services for the supply (removal) of water to the main partially paid types of activities, and the establishment at the legislative level of the mandatory conclusion of contracts for the provision of services for the supply (removal) of water.

scholarly journals Agricultural insurance with state support as a tool of agricultural financial stability

2021 ◽  
Author(s):  
E. G. Meshchaninova ◽  
◽  
V. A. Shevchenko ◽  
Keyword(s):  
Financial Stability ◽  
Crop Production ◽  
Agricultural Development ◽  
Developed Countries ◽  
Government Support ◽  
State Support ◽  
Agricultural Insurance ◽  
Agricultural Producers ◽  
Key Factor ◽  
The Government

Purpose: to study the system of agricultural insurance with state support in Russia to identify its advantages. Discussion. The share of agriculture in Russia's gross domestic product structure is 4 % on average. Not only food security of the country, but also an increase in the exported agricultural products volume is ensured. Unfortunately, the industry’s development prospects do not have stable dynamics due to both internal and external economic factors. The experience of the developed countries shows that government support is a key factor for sustainable agricultural development and increasing its competitiveness. This need is due to the specific risks of agriculture. So, in crop production, weather risks which are annually exposed to a number of the country agrarian-oriented regions in areas of risky farming are unpredictable. The new system of agricultural insurance with state support, consisting of two types of subsidies, guarantees compensation for agricultural producers from extreme weather situations without reference to the timing of the harvest, and also provides for a insurance certificate cost reduction. With a view to sustainable development of agriculture, the government provides for other state support programs aimed at adjusting budgetary policy, concessional lending, as well as the introduction of new “short” grants for farmers. Despite the measures taken, the volume of agricultural insurance is lower than potential due to the loss of the insured's confidence in the insurance business. Conclusions. The agricultural insurance market in Russia has a tendency to expand since 2019, and the driver of this dynamics is the changed conditions of state support for agricultural insurance.

Trends and current state of agriculture in the Irkutsk region

2021 ◽  
pp. 15-25
Author(s):  
E.A. Ilyina ◽  
◽  
M.F. Tyapkina ◽  
Yu.D. Mongush ◽  
◽  
...  
Keyword(s):  
Agricultural Production ◽  
Crop Production ◽  
Statistical Data ◽  
Animal Husbandry ◽  
Agricultural Producers ◽  
Current State ◽  
Self Sufficiency ◽  
Irkutsk Region ◽  
Production Growth

The issue of food self-sufficiency in the region becomes the most relevant in times of crises and pandemics. To answer this question, it is necessary to analyze the current state of agriculture and identify trends inherent in the industry. The article assesses the role of agriculture in the economy of the region. The characteristics of the development of crop production and animal husbandry are given, quantitative and qualitative factors are analyzed, and production growth reserves are identified. The material and technical base of the industry is analyzed, the main directions of state support for agricultural producers are described, and a conclusion is formulated about the level of food self-sufficiency in the region under consideration. The directions of development of the industry to ensure the growth of gross agricultural production are proposed. The study is based on the statistical data of the Irkutsk region for the period 2005-2019.

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