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2020, vol. 57, iss. 2, pp. 43-48
Area revenue insurance as a risk management instrument in Serbian agriculture
University of Novi Sad, Faculty of Agriculture

emailtodor.markovic@polj.edu.rs
Project:
This study is a part of the project APV 114-451-2180/2016 titled "Cultivation of forage crops in crop rotation in order to increase soil fertility and biodiversity in agro-ecological conditions of Vojvodina", funded by the Provincial Secretariat for Higher Education and Scientific Research of AP Vojvodina and the results of the research are also subsidized by the Ministry of Education, Science and Technological Development of Republic of Serbia
Ministry of Education, Science and Technological Development, Republic of Serbia (Institution: University of Novi Sad, Faculty of Agriculture) (MESTD - 451-03-68/2020-14/200117)

Keywords: area revenue; agriculture; index insurance; risk management; Serbia
Abstract
The Republic of Serbia has very favourable opportunities for the development of crop production. Even so, Serbian farmers face many risks. Due to climate change, it is certain that there will be increasing fluctuations in temperature and rainfall, which will increase the production risks. In recent years, due to globalization and market liberalization, price risks have inevitably increased. On this basis, it is clear that the farmed s basic risks are related to the yield level and the price level of agricultural products. One of the external risk management instruments is insurance and there are two main groups of insurance: traditional and index insurance. The application of area-revenue insurance in agriculture, as a type of index insurance is becoming more and more popular in the last few years, especially in developed countries. This model is based on data related to average revenue of particular administrative unit or region and it represents the basis for premium calculation and insurance benefits. In the case of wheat production as one of the most important crops in the region of Kula municipality, the authors describe the methodology of application of the analysed insurance system. The main advantage of this insurance model is that it does not require the damage assessment and their implementation would reduce the negative financial consequences in Serbian agricultural production. In this way, this insurance model can be seen as a significant alternative to conventional insurance, which can increase insured area and number of insured, and trust and confidence in insurance companies would also be restored.
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About

article language: English
document type: Original Scientific Paper
DOI: 10.5937/ratpov57-24962
published in SCIndeks: 02/09/2020
peer review method: double-blind
Creative Commons License 4.0

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