CLIMATE CHANGE, AGRICULTURAL INSURANCE AND GOVERNMENTAL SUPPORT

Global warming has contributed to a greater frequency of extreme weather events represented by heat waves, severe drought or floods. Agriculture is exposed to such events more than many other economic sectors. Agriculture is not only one of the most exposed sector to climate change triggered risks, but it also faces sever difficulties in addressing those risks. The paper aims to provide an argument for more intense governmental involvement in agricultural risk management, based upon several factual and theoretical reasons. There were identified some theoretical reasons (market failure, co-responsibility, economics) that support a better governmental intervention through an insurance scheme with governmental support. Romania's agricultural insurance market is in its infancy, but there are signals that competition could lower premiums below the technical level. Governmental measures, such as subsidized credits and damage scheme for natural hazards produced losses impacted significantly the agricultural insurance market. However, delayed payments lowered farmers' trust in insurance as a risk management option.