Purpose: After several reforms of the common agricultural policy, domestic product prices and farm incomes have become more volatile in the EU. Risk-averse farmers are therefore seeking income stabilizing measures. Margin insurance is among the feasible options but is not yet established in the...

Direct payments are the most important expenditure of the Common Agricultural Policy (CAP). They are mostly spent on decoupled direct payments which are intended to be allocatively neutral. Increasing volumes of such transfers imply that distributive aspects of CAP expenditures become more...