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Evaluation of the EU proposed farm income stabilisation tool by skew normal linear mixed models

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Pigeon, Mathieu [UCL] Henry de Frahan, Bruno [UCL] Denuit, Michel [UCL]

The European Commission has introduced new risk management tools in the rural development pillar 2 of the Common Agricultural Policy. One of them consists in providing co-financing support to mutual funds compensating farmers who experience a severe drop in their income. This paper analyses this income stabilisation tool for a region in Belgium by means of a skew normal linear mixed model. Relying on the farm accountancy data network, this analysis focuses on estimating the probability that such a fund would need to intervene and, in that case, the expected amount of each farm income compensation. The predictive distribution of future incomes given past revenues trajectory is derived and used for evaluation purposes. Particular attention is paid to additional requirements that could be imposed to the income stabilisation tool.

Document type Article de périodique (Journal article) – Article de recherche
Access type Accès interdit
Publication date 2014
Language Anglais
Journal information "European Actuarial Journal" - Vol. 4, no. 2, p. 383-409 (2014)
Peer reviewed yes
issn 2190-9733
e-issn 2190-9741
Publication status Publié
Affiliations UCL - SSH/LIDAM/ISBA - Institut de Statistique, Biostatistique et Sciences Actuarielles
UCL - SST/ELI - Earth and Life Institute
Keywords Agricultural risk management ; Income stabilisation ; Skew normal distribution ; Mixed effects models ; Common agricultural policy
Links
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Bibliographic reference Pigeon, Mathieu ; Henry de Frahan, Bruno ; Denuit, Michel. Evaluation of the EU proposed farm income stabilisation tool by skew normal linear mixed models. In: European Actuarial Journal, Vol. 4, no. 2, p. 383-409 (2014)
Permanent URL http://hdl.handle.net/2078.1/146415