Research from University of Tuscia Yields New Study Findings on Farm Income (Effects of the Income Stabilization Tool on farm income level, variability and concentration in Italian agriculture)

2020 JAN 08 (NewsRx) -- By a News Reporter-Staff News Editor at Insurance Daily News -- Research findings on farm income are discussed in a new report. According to news reporting out of the University of Tuscia by NewsRx editors, research stated, “This paper provides an ex ante assessment of the effects of the Income Stabilization Tool (IST), a new risk management tool proposed in the Common Agricultural Policy of the European Union. We investigate the effects of IST on income variability and levels as well as on income inequality in the farming population.”

Funders for this research include Horizon 2020 Framework Programme.

Our news journalists obtained a quote from the research from University of Tuscia: “We take Italian agriculture as an example as the introduction of IST is currently under discussion there. A rich panel of 2777 farms was studied over a period of 7 years. We use stochastic simulation to derive different income inequality estimates and apply Gini decomposition approaches to assess the distributional implications of IST. We compare the current income situation with that resulting from a hypothetical implementation of IST under different policy scenarios, also accounting for reduced levels of CAP direct payments. We find that IST not only stabilizes farm income but also enhances its level and reduces income inequality in Italian agriculture. IST is more effective in reducing income inequality when farmers pay contributions to mutual funds that are proportional to their income compared to the case of flat rate contributions.”

According to the news reporters, the research concluded: “Finally, results do not support the hypothesis that the impact of IST will differ if the level of direct payments were to be reduced. Thus, results seem robust enough to accommodate future policy conditions.”

For more information on this research see: Effects of the Income Stabilization Tool on farm income level, variability and concentration in Italian agriculture. Agricultural and Food Economics, 2019,7(1):1-22. (Agricultural and Food Economics - http://www.agrifoodecon.com/). The publisher for Agricultural and Food Economics is SpringerOpen.

A free version of this journal article is available at https://doi.org/10.1186/s40100-019-0141-9.

Our news editors report that additional information may be obtained by contacting Simone Severini, Tuscia University.

(Our reports deliver fact-based news of research and discoveries from around the world.)