The agricultural sector is constantly affected by a multitude of risks and changes in food prices and changing growing conditions imply income variation. In times of large falls in farm incomes, the government may have to support the sector, otherwise farmers risk leaving the sector.

This project discusses conditions when the government should support the agricultural sector and when the sector is assumed to handle a crisis on its own. A specific focus is on the drought in 2018. What was the economic impact of the drought, and was the 1.57 billion government supported justified? The project also discusses whether it is justified to support the sector during the current cost- and energy crisis. We use firm data for 2012-2019 to analyse the drought in 2018.

The project will be completed in spring 2023.