The Role of area-yield crop insurance program face to the Mid-term Review of Common Agricultural Policy

maximum values for the objective function are obtained when the Alentejo farmers
choose the area-yield crop insurance program with the full decoupling of income
payments from agricultural production. These results also confirm that the area-yield crop
insurance program have the preference relatively to other proposals under the mid-term
review of the Common Agricultural Policy.

5 - Conclusions

This research work studies the farmers' behavior when they are confronted with themid-
term review of the Common Agricultural Policy. Two objectives are defined in this
research work. The first objective intends to foresee the farmers' behavior, when they are
confronted with the review of the mid-term of the Common Agricultural Policy, in
agreement with the perspectives of full and partial decoupling of income payments from
agricultural production. The second objective analyses the farmers’ behavior face to the
introduction of the area-yield crop insurance program. This research work will have as
theoretical base the Cumulative Prospect Theory. This theory allows modeling the
decision makers' behavior, when defining a concave value function for gains and convex
for losses, it permits the existence of behaviors of preference or aversion to risk for the
results are classified as losses and gains, respectively. With the mid-term review of
Common Agricultural Policy, the subsidies are not linked to agricultural production and
the decision makers will stop incorporating the subsidies in their decision process. The
theoretical base of this theory constitutes the objective function of a discrete sequential

22

<<   19   20   21   22   23   24   25   >>

More intriguing information