Toward the implementation of the Income Stabilization Tool: an analysis of factors affecting the probability of farm income losses in Italy

Abstract

Over the last years, EU agricultural farms suffered an increased sensitivity to market fluctuations in terms of both production flows and incomes, due especially to climate change and market globalisation. In addition to previous instruments as insurances and mutual funds, the new reform of European Common Agricultural Policy 2014-2020 proposes a new instrument, namely the Income Stabilisation Tool (IST), in order to specifically support farmers’ severe income drops. This study aims at contributing to the lively debate on risk management linked to the implementation of the IST by estimating the probability of income loss in relation to farm attributes in Italy.