Improving the economic sustainability of Italian Farmer: an Empirical Analysis of decision-making models for insurance adoption

To achieve sustainability, agricultural insurance is one of the main tools capable of reducing the vul- nerability of farmers. This is the reason it is important to investigate the different factors that affect the farmers’ agricultural insurance decision-making. The paper, using Regional panel data from Italy Regions and the GMM dynamic panel data model, examines the effect of different group variables on agricultural insurance decision making: risk perception and management, agricultural insurance recognition, trust and affordability. The aim of this paper is: (1) to analyze, through a systematic liter- ature review, which are the main problems regarding agricultural insurance diffusion, (2) to measure which category of variables influences agricultural insurance adoption, (3) to provide different policy solutions to improve the diffusion of agricultural insurance in Italy. The results show that agricultural insurance affordability, risk perception and management are the major influencing factors; a possible solution to improve the agricultural insurance demands would be to raise household net income and find an alternative solution to subsidies.