Crop Biodiversity, Risk Management and the Implications of Agricultural Assistance
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Date
2004Author
Di Falco, Salvatore.
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Di Falco, S., & Perrings, C. (2004) "Crop Biodiversity, Risk Management and the Implications of Agricultural Assistance" (Working Paper No. 0084) Department of Economics, National University Ireland, Galway.
Abstract
This paper presents a theoretical and empirical analysis of the impact of
financial assistance to farms on crop biodiversity in an uncertain setting.
The findings reveal that risk aversion is an important driving force for
crop biodiversity conservation. Risk averse farmers can hedge against
the uncertainty they face by allocating land to different crop species.
However, policies intended to stabilize revenues by supporting particular
species may alter this link by delinking crop biodiversity from the
management of revenues risk.