Price volatility and risk management : the case of rice in the EU

The paper aims at analysing rice-price volatility over the last ten years, and at identifying strengths and weaknesses of financial-risk management tools other than derivatives. In particular, it focuses on innovative insurance products, like revenue insurance products, and on their potential use in agriculture. Focus will be on EU Mediterranean countries, specifically on Italy, that is the main rice producer in this area. In Europe, the Common Agricultural Policy (CAP) provides risk management tools. For example, the income stabilization tool is a measure to manage income risks. Despite this, it is still not adopted. Our analysis is a first endeavour to emphasize the most relevant issues in creating revenue insurance products for rice farmers in the EU, with focus on the Italian market.