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The agricultural economics profession plays an essential role in the transition towards more sustainable and resilient food systems. The interdisciplinary perspective of the profession, the rapidly evolving methods and new data, as well as the diverse agricultural, climatic, and political and cultural landscapes of the European Union member states and associated countries pose specific challenges. In this study, we summarize what this implies for Early-Career researchers and how the European Network of Early Career Agricultural Economists (AgEconMeet) tries to support these youngsters in their career development. Finally, we introduce the articles of this special issue that represent the diverse landscape of agricultural economics in Europe

According to the European Green Deal, the EU aims to cut its pesticide use in half by 2030 (ref. 1). To reach this ambitious target, holistic pesticide policies have been proposed to avoid the unwanted side effects of single actions such as pesticide bans2,3. However, not only pesticide policies but also the entire toolkit of the European Common Agricultural Policy (CAP) must be developed holistically to avoid chemical inputs polluting the environment.Recently, the CAP opened the way for increased crop-insurance support through premium subsidies (Regulation (EU) 2021/2115). In response, we have seen a sharp rise in publicly funded insurance in EU member states (Fig. 1). This trend will probably continue in the near future4,5 because insurance can serve as an important risk management tool in a sector that is exposed to high and increasing risks under climate change6,7. Owing to the often-systemic nature of risks in agriculture and the expensive loss assessment, public support is often granted to enable these insurance markets.

Weather risks threaten food production and put farms’ profitability at risk. Insurance solutions can compensate for the resulting financial losses and thereby serves as important risk management tool. While insurance providers in Europe have recently largely expanded the number and scope of offered weather insurance solutions, this remained undocumented in scientific literature. We here provide a structured assessment of agricultural insurance products that are on the market to cover weather risks in crop and horticulture production in dynamic European insurance markets, focusing on Austria, France, Germany, Italy, Spain and Switzerland. We systematically collect information on supplied insurance products (N = 107) and find large diversity in market concentrations, offered products, insured weather risks, and political market interventions. We find that for most economically relevant weather risks (especially for hail), insurance solutions are available to farmers, but we identify certain insurance protection gaps (e.g., flood in Germany). Additionally, drought and heat risks seem underrepresented in current insurance products, especially given their economic relevance. Indemnity insurance (where payouts are based on assessed losses) is offered most frequently, but weather index insurance (where payouts depend on the realization of an index, such as cumulative precipitation) is also increasingly available in Europe. Most of current weather index insurance solutions have a unique design, indicating a preference to stand out from the competition, and we observe little knowledge spillovers between markets. There are different levels of political market intervention and in particular a trend to introduce premium subsidies and towards a convergence of premium subsidy levels between markets. We highlight the need to align any political market intervention to other policy goals and to the transition to a more sustainable agriculture. Finally, we underline the important rol

CONTEXT: Mixed farming and agroforestry systems (MiFAS) are widely proposed to deal with ecological, economic, and social challenges that are associated with specialised farming systems. However, little is known about how MiFAS are integrated in food value chains and how value creation in MiFAS is rewarded by value chain actors.OBJECTIVE: We review the broad literature on MiFAS (80 papers) with a particular focus on implications for food value chains.METHODS: We use thematic analysis to code existing evidence and categorise these codes into four major themes: MiFAS value creation, Impacts of the farming environment on value creation, Ecosystem service valuation, and Supply & value chain integration. From here, we produce meta-narratives to summarise the literature within each theme. In a second step, we use these literature insights to develop possible value chain configurations that operationalise MiFAS in food value chains.RESULTS AND CONCLUSIONS: We find that: a) integrating farming enterprises tends to improve yields and land-use efficiency and can reduce variable costs; b) MiFAS seem to face significant challenges with respect to fixed costs, such as of capital investments, and of labour; c) high opportunity costs associated with MiFAS can be a drawback for farms seeking to become more integrated as limited knowledge and the time to establish profitable MiFAS can deter adoption; d) sources of value creation within MiFAS stem from its ability to reduce variablecosts as well as maintain or raise inputs, primarily by improving the efficiency of resources such as nutrients and

We analyse the signalling effect of a strategy known as eponymy whereby owners integrate their name into the company name. Using microdata from German food pro-cessors, we find that eponymous companies generate 2.8 per cent-points higher return on assets, which implies additional yearly profits of €253,000 for a median-sized company. The eponymy effect increases with ownership concentration, indicating that the more control an owner holds over the company, the stronger the signalling. Long names ranking low in the alphabetical order mitigate the effect. This study applies a novel approach to investigate the causal effect of firm naming and thus has implications for food processors.

We estimate the relationship between firms’ production flexibility and profitability under extreme positive demand shocks using the European toilet paper manufacturing industry in 2020 as a case study. This industry faced extreme increases in demand due to consumers panic purchasing toilet paper after the outbreak of the COVID-19 pandemic. Our estimates show that flexibility and profitability are positively related. This is even more pronounced in times of an extreme positive demand shock when a ten percent improvement in flexibility is associated with a five percent increase in profitability.

This data is used for the following publication: Low, G., Dalhaus, T., & Meuwissen, M. (2023). Mixed farming and agroforestry systems: A systematic review on value chain implications. Agricultural Systems (206). https://doi.org/10.1016/j.agsy.2023.103606, This data is used for the following publication: Low, G., Dalhaus, T., & Meuwissen, M. (2023). Mixed farming and agroforestry systems: A systematic review on value chain implications. Agricultural Systems (206). https://doi.org/10.1016/j.agsy.2023.103606

Many farmers hesitate to adopt new management strategies with actual or perceived risks and uncertainties. Especially in ornamental plant production, farmers often stick to current production strategies to avoid the risk of economically harmful plant losses, even though they may recognize the need to optimize farm management. This work focused on the economically important and little-researched production system of ornamental heather (Calluna vulgaris) to help farmers find appropriate measures to sustainably improve resource use, plant quality, and profitability despite existing risks. Probabilistic cost-benefit analysis was applied to simulate alternative disease monitoring strategies. The outcomes for more intensive visual monitoring, as well as sensor-based monitoring using hyperspectral imaging were simulated. Based on the results of the probabilistic cost-benefit analysis, the expected utility of the alternative strategies was assessed as a function of the farmer’s level of risk aversion. The analysis of expected utility indicated that heather production is generally risky. Concerning the alternative strategies, more intensive visual monitoring provides the highest utility for farmers for almost all levels of risk aversion compared to all other strategies. Results of the probabilistic cost-benefit analysis indicated that more intensive visual monitoring increases net benefits in 68% of the simulated cases. The application of sensor-based monitoring leads to negative economic outcomes in 85% of the simulated cases. This research approach is widely applicable to predict the impacts of new management strategies in precision agriculture. The methodology can be used to provide farmers in other data-scarce production systems with concrete recommendations that account for uncertainties and risks.

Heat can cause substantial yield losses in crop production and climate change is increasing the risk of this kind of damage. Weather index insurance can help to reduce the financial losses resulting from heat exposure. This paper introduces crop-specific payout functions based on restricted cubic splines in heat index insurance. The use of restricted cubic splines is a cutting-edge method to reflect empirically estimated temperature effects on crop yields and to estimate temperature-related yield losses. The integration of these temperature effects in payout functions facilitates insurance design and allows hourly temperatures to be used as the underlying index. An empirical analysis is used to assess heat stress effects for a panel of East German winter wheat and winter rapeseed producers, to calibrate insurance contracts accordingly and simulate the resulting risk reducing capacities. We find that the insurance scheme introduced here leads to statistically and economically significant out-of-sample risk reducing capacities for farmers, i.e. risk premiums are reduced by up to approximately 20% at the median, in comparison to the uninsured status and at the actuarially fair premium. Moreover, we highlight that policy-makers can support the cost-efficient provision of market-based weather index insurance by fostering data collection and data provision.

Insecticide use and its adverse environmental and health effects are expected to further increase in a warming climate. We here show that farmers' insecticide use, however, declines substantially when facing extreme heat. Using the example of Colorado potato beetles (Leptinotarsa decemlineata) in Switzerland, we find an 11.5% reduction of insecticide use for each day and degree that maximum temperatures exceed 34 °C in the potato growing season. Importantly, our analysis accounts for farmers' behavior under real field conditions, considering the potential adaption of farming practices to extreme heat. It, therefore, highlights how to combine methods to assess and improve our knowledge on the combined major challenges of reducing pesticide risks and coping with the effects of climate change on agriculture while accounting for human behavior. In the analysis, we provide various robustness checks with regard to the definition of temperature extremes, pesticide use indicators, and the chosen statistical model. We further distinguish the principal drivers of the identified effect and find strong evidence that insecticide use reductions are mainly driven by heat-induced decreases in pest pressure rather than heat-induced yield losses that render insecticide applications too expensive. We conclude that similar investigations for other crops and countries are required to assess and understand farmers changing pesticide use decisions under climate change.

With a global market of 30 billion USD, agricultural insurance plays a key role in risk finance and contributes to climate change adaptation by achieving Sustainable Development Goals (SDGs) including no poverty, zero hunger, and climate action. The existing evidence in agricultural insurance is scattered across regions, topics and risks, and a structured synthesis is unavailable. To address this gap, we conducted a systematic review of 796 peer-reviewed papers on agricultural insurance published between 2000 and 2019. The goal of this review was twofold: 1) categorizing agricultural insurance literature by agricultural product insured, research theme, geographical study area, insurance type and hazards covered, and 2) mapping country-wise research intensity of these indicators vis-à-vis historical and projected risk and crisis events—extreme weather disasters, projected temperature increase under SSP5 (Shared Socioeconomic Pathways) scenario and livestock epidemics. We find that insurance research is focused on high-income countries while crops are the dominating agricultural product insured (33% of the papers). Large producers in production systems like fruits and vegetables (South America), millets (Africa) and fisheries and aquaculture (South-east Asia) are not focused upon in the literature. Research on crop insurance is taking place where historical extreme weather disasters are frequent (correlation coefficient of 0.75), while we find a surprisingly low correlation between climate change induced temperature increases in the future and current research on crop insurance, even when sub-setting for papers on the research theme of climate change and insurance (-.04). There is also limited evidence on the role of insurance to scale adaptation and mitigation measures to de-risk farming. Further, we find that the study area of livestock insurance papers is weakly correlated to the occurrence of livestock epidemics in the past (-.06) and highly correlated to the hist

Crop producers face significant and increasing drought risks. We evaluate whether insurances based on globally and freely available satellite-retrieved soil moisture data can reduce farms’ financial drought risk exposure. We design farm individual soil moisture index insurances for wheat, maize and rapeseed production using a case study for Eastern Germany. We find that the satellite-retrieved soil moisture index insurances significantly decrease risk exposure for these crops compared to the situation where production is not insured. The satellite-retrieved index also outperforms one based on soil moisture estimates derived from meteorological measurements at ground stations. Important implications for insurers and policy makers are that they could and should develop better suited insurances. Available satellite-retrieved data can be used to increase farmers’ resilience in a changing climate.

Crop insurance is an important instrument for farmers to cope with climate risks. Yet, also, diversification plays a crucial role. The use of crop insurance and diversification is interrelated. For example, an increasing support and uptake of insurance solutions may discourage farmers to take diversification measures on the farm, given that they now have an insurance dealing with risks. This may have unintended consequences, such as biodiversity decline.We examine the relationships between seven different kinds of income diversification and the uptake of crop insurance. Theoretically, both substitutive and complementary relationships are possible. The reason is that, depending on their preferences and constraints, farmers choose income bundles that optimally balance profits and risks. Here we provide the first systematic empirical examination of this issue. Our analysis is based on our own survey data from 1176 Swiss fruit growers. We consider on– and off-farm diversification strategies, namely inter-varietal diversity, agro-tourism, processing and direct marketing of products, creation of financial reserves for bad times, forestry work, off-farm investment, off-farm income and their association with insurance uptake. In line with our theoretical reasoning, we do indeed find both substitutive and complementary relationships. In general, on-farm diversification is associated with positive insurance demand, whereas off-farm diversification has a negative association.

Despite pleas from international organizations, governments and trade economists to refrain from imposing trade‐distorting measures, over 20 countries have implemented bans on the export of agri‐food products since the onset of the COVID‐19 crisis. These export prohibitions might adversely impact food security and disrupt well‐established global supply chains. We identify importing countries that could potentially be affected by the imposed export bans using a measure of their import dependency during the pre‐pandemic period to illustrate our results on global trade maps. We find that many importers rely on just one country for a significant share of the overall domestic supply of a particular commodity. [EconLit Citations: F10, F13, Q17, Q18]