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    'Staff publications' is the digital repository of Wageningen University & Research

    'Staff publications' contains references to publications authored by Wageningen University staff from 1976 onward.

    Publications authored by the staff of the Research Institutes are available from 1995 onwards.

    Full text documents are added when available. The database is updated daily and currently holds about 240,000 items, of which 72,000 in open access.

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Record number 431034
Title Effects of agricultural policy reforms and farm characteristics on income risks in Swiss agriculture
Author(s) Benni, N. El; Finger, R.
Source Agricultural Finance Review 72 (2012)3. - ISSN 0002-1466 - p. 301 - 324.
DOI https://doi.org/10.1108/00021461211277204
Department(s) Agricultural Economics and Rural Policy Group
WASS
Publication type Refereed Article in a scientific journal
Publication year 2012
Abstract Purpose – The purpose of this study is to examine the effects of agricultural policy reform – specifically the change from market to direct payment support – on income variability of Swiss farming households. In addition, the observed heterogeneity in income risks across farms and time is explained in terms of farm and regional characteristics. Design/methodology/approach – Unbalanced farm-level panel data of the Swiss farm accountancy network (FADN) are used to construct coefficients of variation of five-year overlapping time intervals for total household income and gross farm revenues over the period 1992 to 2009. Linear fixed effect models are applied to measure the effect of specialization, off-farm income, direct payments, farm size, and liquidity on the variability of gross farm revenues and household income in the valley, hill, and mountain regions. Findings – The switch from market-based support to direct payments has decreased the variability of farm revenues and household income. The strong reliance on direct payments serves as insurance for most farmers and reduces both household income and revenue risk. Off-farm income can be used by farmers to reduce household income risk but it increases revenue risk in the valley regions. In all of the regions considered, farm size has a positive effect on household income risk and a negative effect on revenue risk. A high degree of specialization increases both gross revenue and household income risk. Potential revenue insurance contracts should specify farmers’ off-farm employment, the degree of specialization, farm size, and regional specific risk profiles. Originality/value – This paper assesses the complementary effects of specific farm characteristics and risk management strategies with regard to both farm revenue and household income risk. Influences of agricultural policy changes on income risks are also empirically assessed at different spatial scales.
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