the largest possible area, because it is the crop activity with the largest subsidy value by
hectare (Table 3.1).
Table 3.1 - Farm Characteristics
|
Descriptions |
Farm 1 |
Farm Farm Farm Farm |
Farm 6 |
Farm 7 |
Farm 8 |
Farm 9 | |
|
2 |
3 4 5 | ||||||
|
Agricultural Area | |||||||
|
Total area |
1200 |
660 |
180 570 600 |
200 |
260 |
1020 |
550 |
|
Cultivated area |
1160 |
360 |
150 300 480 |
200 |
260 |
620 |
550 |
|
Pastures areas |
40 |
300 |
30 270 120 |
- |
- |
400 |
- |
|
Good Soils |
60 |
150 | |||||
|
Livestock Production | |||||||
|
Beef cattle |
400 |
150 |
90 |
450 | |||
|
Sheep_________ |
________100 600 | ||||||
|
Farm Income | |||||||
|
The best |
150.0 |
100.0 |
40.0 100.0 100.0 |
30.0 |
50.0 |
125.0 |
60.0 |
|
Normal |
75.0 |
50.0 |
20.0 25.0 15.0 |
5.0 |
10.0 |
75.0 |
25.0 |
|
The worst______ |
-100.0 |
-50.0 |
-20.0 -50.0 -75.0 |
-25.0 |
-40.0 |
-75.0 |
-35.0 |
|
Notes: Areas in hectares, Livestock production in animal units and farm income in thousands of Euros. | |||||||
|
Source: Data collected by inquiries. | |||||||
This paper considers that the calculation of the premium rate is equal to the expected
value of the indemnity insurance. For the calculation of the premium rate, it was
considered the whole Alentejo region as constituting a single area in terms of insurance.
It was considered that the average production is the production of the state of nature 3,
where the level of critical production is of 90% of the average production and the farmers
choose a cover level of 100% (Miranda, 1991).
Table 3.2 - Premium rates and Indemnities
|
Durhum |
Common |
Barley for |
Common |
Oats Tricale Sunflower |
|
Wheat | ||||
|
Production - State 1 1050 |
1250 |
1250 |
950 |
900 ÏÔÔÔ 300 |
|
Production - State 2 1050 |
1250 |
1250 |
950 |
900 1000 600 |
|
Average Production 2100 |
2500 |
2500 |
1900 |
1800 2000 600 |
|
Critical Production 1890 |
2250 |
2250 |
1710 |
1620 1800 540 |
|
Indemnified Prod -St 1 840 |
1000 |
1000 |
760 |
720 800 240 |
|
Indemnified Prod -St 2 840 |
1000 |
1000 |
760 |
720 800_______0 |
|
Probability of Loss 0.37333 |
0.37333 |
0.37333 |
0.37333 |
0.37333 0.37333 0.18667 |
|
Premium rate 0.07148 |
0.08510 |
0.08510 |
0.06468 |
0.06127 0.06808 0.01021 |
|
Notes: Production in kilos per hectare and premium rate in thousands of euros per hectare | ||||
16