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Industrial crops and the role of diversification in EU agriculture: risk-reducing strategies and sustainability

Agriculture and risk. Production risk: expressed as yield and/or output variability due to diseases, higher quality requirement, climate changePrice risk: expressed as price volatility due to increasing liberalisation, reduced support etc.Objective vs. Subjective risk. Risk Management. Risk= expo

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Industrial crops and the role of diversification in EU agriculture: risk-reducing strategies and sustainability

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    1. Industrial crops and the role of diversification in EU agriculture: risk-reducing strategies and sustainability Graziano Ceddia Central Science Laboratory UK

    2. Agriculture and risk Production risk: expressed as yield and/or output variability due to diseases, higher quality requirement, climate change Price risk: expressed as price volatility due to increasing liberalisation, reduced support etc. Objective vs. Subjective risk

    3. Risk Management Risk= exposure X hazard exposure: probability distribution of the event hazard: entity of the damage Risk management strategies can be directed to reduce the level of exposure (mitigation) or the hazard (adaptation)

    4. Risk Management Risk-sharing strategies: Vertical integration Contracts: marketing and/or production Futures Insurance: problems due to asymmetric information, systemic risks and catastrophes Mutual funds

    5. Risk Management On-farm strategies: diversification (1): alternative crops to main cash-crops diversification (2): alternative sources of income outside the agricultural sector

    6. Agricultural Diversification

    7. Industrial crops and diversification The uptake of industrial crops could bring benefits to Agriculture: new value added products Environment: increasing biodiversity and promoting sustainability Economy: break-through in R&D

    8. Industrial crops and diversification

    9. Sustainability and Resilience Sustainability is a measure of the ability of a stochastic system to function under a range of different environmental conditions, without flipping to a more degraded state: without losing its resilience (Arrow, 1995) Resilience can be measured by the size of the disturbance that can be absorbed before the system flips into another state (Holling, 1973)

    10. Cereals diversity 1970-1993

    11. Cereals area in 1993

    12. Value Added 1970-1993

    13. The model Income Variance

    14. The Results

    15. The Results

    16. Conclusions Increasing diversification (biodiversity) could have significant effects on the ability of agro-ecosystems to withstand environmental and economic variability Over the years, increasing specialisation in agriculture has meant a reduction of interspecific diversity in agro-ecosystems in the South of Italy and consequent loss of resilience Increasing the ability of agro-ecosystems to face variability and to absorb exogenous shocks is a fundamental step towards a more sustainable agriculture

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