Abstrakt
The second part of this article focuses on the relationships between insurance subsidies and the demand for risk mitigation products, the negative effects of such intervention, and opportunities for rationalising the budgetary funds allocated to these subsidies. This section is also based on experiences documented by the World Bank, the Food and Agriculture Organization (FAO) of the United Nations, the International Food Policy Research Institute (IFPRI), and the Organisation for Economic Cooperation and Development (OECD), as well as a review of the relevant literature conducted using a modified snowballing backward technique, systematic literature reviews, and the author’s expert knowledge. The review is highly up-to-date, ending in the first half of 2024. The article aims to synthesise the diverse experiences, theoretical reflections, and empirical research results in the three aforementioned areas. The analysis can be summarised in three conclusions. Firstly, farmers’ demand for agricultural insurance generally exhibits low elasticity, requiring high subsidy rates, particularly for multi-risk insurance (known in Poland as package insurance), to significantly increase demand. Secondly, insurance subsidies may result in numerous demotivating effects among participants in the insurance market, ultimately reducing their social efficiency. Thirdly, insurance subsidies tend to become self-perpetuating, as a strong interest group – comprising farmers, insurers, and agricultural policymakers – advocates for their continuation, making it very challenging to rationalise the system.
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