Original scientific paper

Spatial and temporal development of subsidised crop insurance in Hungary

2020, 21 (1)   p. 176-186

Anna Zubor-Nemes, Jozsef Toth


Farmers face a variety of risks, of which the most important is the production risk arising from the unpredictable nature of weather and other uncertainty factors. This paper describes the expansion in space and time of subsidised crop insurance in Hungary, particularly the government-subsidised all-risk insurance scheme. The empirical analysis was based on insurance data and utilised area from the period 2012-2016. Firstly, Moran’s I index was applied to examine the spatial pattern of insurance use. The index shows a significant neighbourhood effect with respect to location in both the total of all subsidised, and the all-risk schemes. Secondly, using the dynamic spatial autoregressive model, the authors found that the level of insurance take-up is determined by the previous year’s level, as well by production structure (i.e. arable v. fruit v. vegetable crops) and farm size. There is no statistically-significant effect of production structure and farm size on the take-up of all-risk insurance. The high level of fruit production in Hungary discourages farmer participation in the subsidised insurance scheme, implying that further refinement of the two-scheme risk management system is necessary.


all-risk insurance, Moran’s I, risk management, SAR model

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