Agricultural insurance in Italy and France The purpose of this paper is to understand the factors that influence the decision of crop insurance in France and in Italy. The neighboring countries are characterized by changes in the insurance system of public funding for subsidized private policies. Although the stakes associated with crop insurance - CAP reform, the size of the market, the implications of the government -, several studies have drawn on this topic. That literature in finance and agricultural economics allows to build a two-stage empirical models that calculate the elasticity of demand for crop insurance, and defines the main determinant. France and Italy seem to present similar insurance system in terms of products and capabilities to compensate. However, the farmer sensitivity to most insurance contrast in the Alps. This led to a discussion about the creation of the insurance market on a European scale. Risk management in agriculture and the role of insurance long been a center of attention for researchers and policy makers. A review of the literature on the subject have consistently shown the failure of the private market for comprehensive (multiperil) agricultural insurance and discontinuity in the absence of public intervention. Even with strong public support, insurance demand is often not as high as could be expected. The reasons for failure are usually found in supply or demand conditions. On the supply side, the problem is most explored is asymmetric and incomplete information (Chambers 1989; Miranda 1991; Mahul 1999; Only, Calvin and Quiggin 1999; Bourgeon and Chambers, 2003), with the resulting problems of adverse selection, moral hazard and systemic risk , This could pose the most serious obstacle to the emergence of private crop insurance industry a comprehensive, independent. Mainly because of the character of systemic risk result, reinsurance becomes very expensive. Without government subsidies or general reinsurance, insurance premiums passed the high costs for farmers (Doherty and Dionne 1993; Miranda and Glauber 1997; Mahul 2001).
On the demand side, the inability of farmers to assess precisely the benefits derived from agricultural insurance is often cited as one possible reason for the limited demand (Garrido and Zilberman, 2008). Another explanation for the limited interest in multiperil crop insurance is that the structure of the agricultural organizations is such that farmers can use other private instruments - such as product diversification, credit, financial markets, and so on - to manage the risk and therefore the potential demand for crop insurance is lower than usual believe (Wright and Hewitt 1994). we can also consider that a massive government intervention in developed countries may also crowd out the private market. Knowledge of the factors affecting the farmers purchase crop insurance is very important to evaluate the reliability and profitability of insurance programs and related support
public (Goodwin and Smith 1995). Regardless of importance, demand for crop insurance has received little attention in the empirical literature, mainly devoted to investigations focused on the North American region. Gardner and Kramer (1986); Niewoudt et al. (1985), and Barnett et al. (1990) found that the rate of return expected by the insurers is an important factor in determining the demand for insurance. Lower attention has been devoted to the possible impact of the financial problems in this field (Enjolras and Sentis, 2011). Currently, for the European countries have aggravated the lack of empirical evidence (Capitanio and Adinolfi, 2009). With this initial statement, do this analysis we want to show the factors that may influence the decision of crop insurance in France and Italy, taking into account both the agricultural and financial variables (De Castro et al, 2011)