The preferences of farmers and non-farming citizens for farm catastrophic risk management policy alternatives

Abstract

Economic risks for farmers have increased during recent years due to various factors such as more extreme climate conditions and the volatility of agricultural markets. We analysed the preferences of Finnish farmers and non-farming citizens concerning catastrophic risk management policies in agriculture based on a survey addressed to both groups. Respondents were asked to rank their preferences regarding who should bear the costs from various disasters occurring on farms. Farmers and non-farming citizens did not prefer a single cost bearer for all risks, but they generally preferred either society or farmers' insurance to bear the costs. The results indicate that citizens generally accept public spending on agricultural risk management, either through some ex post disaster aid or through subsidised insurance. Farmers' preferences were generally aligned with those of non-farmers.