Review Reports - Risk and Uncertainty in Agriculture: Theory, Tool Boundaries, and Public Role

Round 1

Reviewer 1 Report (Previous Reviewer 3)

Comments and Suggestions for Authors

In my opinion, the article submitted for review is substantively correct. The article is both practical and scientifically relevant. This is because farmers currently face serious structural challenges and must adapt to changing global scenarios. It addresses the crucial issue of theoretical frameworks for effective agricultural management.

Compared to the previous version of the article, the authors have thoroughly revised the article.

The comments made in the previous review have been incorporated into the current version of the article. The exception is one comment, which I described too briefly ("Please do not conclude the chapter with a list"). This is not a substantively significant comment. Let me clarify. I wanted to avoid ending chapters in articles with bullet points or enumerations. Ending a chapter (especially in scientific papers) with bullet points alone is discouraged due to the rules of text composition and the need for a logical conclusion to the argument. A common and recommended practice is to include at least a short summary sentence after the chapter, which "closes" the structure of the given section. This situation does not occur in the current version of the article. Therefore, I believe that this thoroughly revised article, which incorporates all the proposed improvements.

I don't feel qualified to judge the English language and style.

Author Response

many thanks for your clarification and for your comments; I submit a slight different version in a way to increase the added value of your comments.

Reviewer 2 Report (New Reviewer)

Comments and Suggestions for Authors

Review for the paper “Risk and Uncertainty in Agriculture: Theory, Tools Boundary and Public Role” by Fabian Capitanio submitted to “Sustainability”.

The author of this research paper conducted an analysis of the persistent failures in private agricultural insurance markets, arguing that conventional policy frameworks are inadequate for contemporary challenges. It was found that prevailing models, which often rely on oversimplified assumptions of farmer rationality and symmetric information, frequently neglect profound behavioral biases and the structural realities of incomplete markets. The paper critiques the historical over-reliance on insurance as a singular solution, proposing instead a shift towards a multi-layered "Green Portfolio" approach. This proposed framework advocates for the strategic integration of financial instruments, on-farm resilience measures, and public policy, all calibrated to different layers of risk severity and correlation. A central theoretical contribution is the insistence on a rigorous epistemological distinction between quantifiable risk and true uncertainty, suggesting that the latter demands fundamentally different management strategies, including ex-ante public mechanisms for systemic shocks. The results of this study may have important implications for policymakers and financial institutions designing next-generation agricultural support systems.

Below are recommendations to improve the text.

L 32-37. The author should report a concise summary of the two or three leading competing hypotheses in the literature beyond the broad categories of information asymmetry and systemic risk.

L 41-43. The author should explain the key operational and incentive differences between these two major forms of public intervention (direct subsidies vs. state reinsurance) and their implied theories of market failure.

L 57-60. The author should explain what specific shortcomings of existing tools such as traditional yield insurance necessitate this revamp in the context of evolved risks.

L 90. The author should add a brief bridging paragraph stating how Section 2 will address the tools needed to manage the problems outlined in Section 1.

L 90-128. This text requires supporting citations.

L 96-97. The statement that Expected Utility Theory (EUT) and Stochastic Dominance (SD) models "allow for asymmetric risk preferences" requires clarification. The author should explain how SD does this without specifying a utility function, contrasting it with EUT which requires one.

L 141-150. The author should explain the axes (frequency, intensity, correlation) for three-dimensional scheme ('risk box') with clear agricultural examples for each quadrant or vertex.

L 163. For the core objective to define a "green portfolio", the authors should explain the intended analogy to a financial portfolio: what are the "assets" (tools), and how does "diversification" work across public and private instruments? It would be useful to provide a conceptual figure illustrating the "green portfolio" approach. This could be a flowchart showing how different tools (private insurance, savings, on-farm investment, public subsidies, Cat bonds) are allocated across different risk layers (routine, medium, catastrophic) defined by the risk box.

L 320-322. The author should restate Equation (21) in plain language, explaining how a policymaker might interpret "curvature of the utility function" in terms of observable farmer characteristics.

L 335. The author should explain how the parameters (λ~1.8) were chosen. The author should also clarify what specific "premium salience" reduction mechanisms he envision. It would be useful to include a simplified diagram alongside the cereal farm case study. This could visualize the model workflow: from input data (climate, price series) through the joint distribution model (copula) to the risk metrics (VaR, CVaR) and the impact of adding the weather index collar.

L 369-377. The author should provide a simple graphical or numerical agricultural example (two crop varieties' yield distributions) to illustrate FSD. The author should also provide a similar example where FSD fails but SSD succeeds due to risk aversion, highlighting its policy relevance.

L 455. The author should explain the practical threshold for when an event becomes "unpredictable" or exceeds a farmer's capacity.

L 476-493. For Targeted Action 6, the author should specify what types of institutions and what kind of information is most lacking.

For Targeted Action 8, the author should explain how mutual funds internalize monitoring costs and overcome information asymmetry better than individual insurance contracts.

Author Response

L 32-37. The author should report a concise summary of the two or three leading competing hypotheses in the literature beyond the broad categories of information asymmetry and systemic risk.

Thanks for your comments; done in the revised text.

L 57-60. The author should explain what specific shortcomings of existing tools such as traditional yield insurance necessitate this revamp in the context of evolved risks.

Thanks for your comments; done in the revised text.

L 90. The author should add a brief bridging paragraph stating how Section 2 will address the tools needed to manage the problems outlined in Section 1.

Thanks for your comments; done in the revised text.

L 90-128. This text requires supporting citations.

Thanks for your comments; done in the revised text.

L 141-150. The author should explain the axes (frequency, intensity, correlation) for three-dimensional scheme ('risk box') with clear agricultural examples for each quadrant or vertex.

Thanks for your comments; done in the revised text.

L 320-322. The author should restate Equation (21) in plain language, explaining how a policymaker might interpret "curvature of the utility function" in terms of observable farmer characteristics.

Done

specified parameters λ~1.8

Thanks for comments; indeed it could weigh down the text with explanations.

L 455. The author should explain the practical threshold for when an event becomes "unpredictable" or exceeds a farmer's capacity.

Thanks for comments. Has been explained when referred at uncertainty versus risk differences

L 476-493. For Targeted Action 6, the author should specify what types of institutions and what kind of information is most lacking.

Thanks for comments; I've introduced a footnote

For Targeted Action 8, the author should explain how mutual funds internalize monitoring costs and overcome information asymmetry better than individual insurance contracts.

Thanks for comments; I've introduced a footnote

This manuscript is a resubmission of an earlier submission. The following is a list of the peer review reports and author responses from that submission.

Round 1

Reviewer 1 Report

Comments and Suggestions for Authors

This work aimed to introduce a structured overview of two avenues for managing risk in agriculture: conventional crop insurance and the use of financial tools. While the topic is relevant, the current version faces several issues that affect its clarity, accessibility, and scholarly rigor. The writing is at times overly dense, with long theoretical sections that could be streamlined. Empirical grounding is limited to worked examples rather than real-world case studies, which weakens the applied relevance. Furthermore, there are some inconsistencies in terminology, structure, and referencing that need attention before the manuscript can be considered for publication. Here are some comments for improvement.

[1] The introduction could more clearly articulate the research questions, objectives, and contributions.

[2] Section 3 and Section 4 are highly theoretical and mathematical. Condense technical derivations and emphasize conceptual insights.

[3] The “Final Consideration” looks like a book chapter conclusion rather than a journal article’s discussion.

[4] Include real-world empirical evidence rather than relying solely on theoretical exposition.

[5] Provide data-driven results for the worked example.

[6] Provide clearer definitions between risk and uncertainty.

[7] A thorough language edit is required.

[8] Include figures to present concepts.

[9] Table 1 could be reformatted.

[10] The references are inconsistencies in formatting.

[11] Revise the abstract to be clearer and more precise in summarizing contributions.

[12] Expand policy discussion to provide actionable recommendations for agricultural risk governance.

Comments on the Quality of English Language

Some expressions are awkward or grammatically incorrect .

Author Response

First of all thanks for your comments and suggestion that positively affect the quality of the work.

I modified abstract, introduction and final considerations in a way to better clarify the aims, the implications and the area of further research in the field of risk management in agriculture and public intervention.

I formatted table 1.

I tried to increase the distinction between the concept of risk and uncertainty which should be more clear now.

I carried out in more details a discussion concerning the policy implications of this work.

1) The introduction could more clearly articulate the research question, objective, and contributions.
Thanks for your comments; I revised in deep the introduction trying to clarify the main aims of
the research question carried out throughout the paper and the contributions for future empirical
applications on the field of risk management in agriculture.

2) Section 3 and Section 4 are highly theoretical and mathematical. Condense technical derivations
and emphasize conceptual insight.
Section 3 and 4 need to be formalized in a way to demonstrate that few change in assumption
would affect heavily empirical results and, subsequently the building of policy intervention
framework.

3) The Final considerations Looks like a book chapter conclusion rather than a journal article’s
discussion.
I appreciate this comments and I worked on the Final Recommendation section; indeed, I tried to
better clarify the policy recommendation and the further research on the topics.

4) Include real word empirical evidence rather than relying solely on theoretical exposition.
I understand your point of view but basically this paper grows up fostering the need of a clear
theoretical framework before to carry on a public support in risk management in agriculture. Real
word or empirical application could find useful the several warning set throughout the theoretical
discussion of this paper.

5) Provide data-driven results for the worked example
See above comments; I didn’t use any data in this paper, but empirical applications could benefit
in the future.

6) Provide cleaner definitions between risk and uncertainty.
Thanks for your comment; I spent time to clean the distinction between risk and uncertainty in
the introduction.

7) A thorough language edits required.
Checked

8) Include figures
Since I carried out a theoretical framework, I didn’t provide any figures

9) Table 1 formatted.
Thanks for your suggestion; done.

10) The references are inconsistencies in formatting.
Sorry I didn’t understand the requirement.

11) Revise the abstract to be clearer and more precise in summarizing contributions.
Thanks for your comments; I revised the abstract in a way to better clarify aims and possible
further investigations.

12) Expand policy discussion to provide recommendations for agricultural risk governance.
Thanks for your suggestion; I deeply worked in the final section of the paper to introduce
recommendations.

Author Response File: Author Response.pdf

Reviewer 2 Report

Comments and Suggestions for Authors

The paper should be corrected before publication.

The aim is not well elaborated. The main aims of this work were to introduce a structured overview of two avenues for managing risk in agriculture: conventional crop insurance and the use of financial tools. Tha aim in introduction is: Given the above introduction, the objective of this work was to depict a theoretical framework for a correct point of view of income risk management in agriculture built on the “green portfolio” concept, where private risk management tools are used alongside public interventions. Please decide which aim is correct.
The research design and research gap is not clear. What is the new thing in the research? Please write what is the structure of the paper in introduction.
The methods and date are not well described.
The research results are not clear.
Final conclusion and discusion is not completed. What are the policy implication?

Author Response

I would thanks your helpful comments which support the increase of the quality of the paper.

I worked on your comments trying to better clarify the aims of the work, to better emphasize the actual research gap in the distinction between the concepts of risk and uncertainty, and to stress the relevance of the policy implications which derive from a more accurate knowledge on the boundary of single risk management tools.

The aims not well elaborated. Coordinate abstract and introduction

Thanks for your comments; I worked on that following your suggestion.

The research design and research gap is not clear. What is the new thing in the research?

I tried to better clarify the contribution of this theoretical paper looking at the effectiveness of public support in this field fostering the concept of Cat Bond as a possible action to cover loss in the reinsurance market.

The method and date are not well described.

I tried to better explain that this is a theoretical paper that in the intention of the author would warning to be careful on the theoretical assumption whereas we carry on empirical application on risk management in agriculture.

The research results are not clear.

I worked on that emphasizing the policy implications for a public intervention framework that keep into account the theoretical assumption on the limits of each tools in risk management in agriculture.

Final consideration and discussion is not completed. What are the policy implications?

Thanks for your comments; I heavily modified the section.

Reviewer 3 Report

Comments and Suggestions for Authors

The article is correct in terms of its substantive content. The publication addresses risk and uncertainty management in agriculture. This is a topical issue not only from a scientific perspective but also relevant from a utilitarian perspective. A skillful review of two methods of risk management in agriculture: conventional crop insurance and the use of financial instruments is provided. Both the analysis and the conclusions drawn are accurate. The literature is appropriately selected. These are the positive aspects of this study.
Suggestions for improvement:
1) I suggest adding in the abstract who might benefit from the results of the reviewed study and what for.
2) In my opinion, "Worked example" should not end a chapter (e.g., Chapter 2. Analysis of Risk Management Policies). I suggest ending chapters with a summary text. Please consider adding a chapter summary text.
3) Line 139 and beyond. Please consider numbering the formulas. 4) Please do not end the chapter with a list (e.g., Chapter 3. Theory of Behavior Under Uncertainty: Notes). Please add text to conclude the chapter.
5) In Chapter 5 (Final Considerations), I would suggest adding information about the novelty of the conclusions drawn from this study compared to the knowledge available in other studies.
6) I suggest considering providing information about planned (anticipated) areas of further research related to this topic.
Since the goal of the study (which was to highlight the important difference between the concepts of risk and uncertainty in order to implement new tools and new policies to achieve the goal of farmer resilience) has been achieved, I believe the article can be published after the proposed improvements have been implemented.
I don't feel qualified to judge the English language and style.

Author Response

Firstly, thanks for your suggestions which help to clarify and improve the overall quality of the paper.

I consider your comments trying to better clarify in the abstract and in the introduction section the relevance of a clear distinction between risk and uncertainty in a way to build a more efficient public intervention in risk management in agriculture. In the concluding remark too I tried to emphasize the area that would appear more interesting to pursue the objective of a more reliable risk management framework with a public&private partnership (CataBond)

I suggest adding in the abstract who might benefit from the results of the reviewed study and what for.

Many thanks for your suggestions; I worked in deep on the abstract following your statement.

In my opinion “worked example” should not end a chapter (e.g. chapter 2). I suggest ending chapter with a summary text. Please consider a chapter summary text.

Thanks for your comments; indeed, worked example would represents a box that would clarify a possible impact of few changes in assumption on a real word example.

Line 139 and beyond. Please consider numbering the formulas.

Thanks for your suggestions; done.

Please do not conclude chapter with a list.

Sorry I didn’t understand this suggestion.

In chapter 5 (Final Considerations), I would suggest adding information about the novelty of the conclusions drawn from this study compared to the knowledge available in other studies.

Thanks for your very helpful comment; indeed, I tried to better clarify the policy recommendation and the further research on the topics warning the future empirical applications to be careful on the theoretical assumption.

I suggest considering providing information about planned (anticipated) areas of futher research related to this topic.

Thanks for your comments; I introduced in the Final Recommendation new possible research investigation area (Cat Bond) that would play a key role to manage the reinsurance loss of the insurance business in the climate change era.

Round 2

Reviewer 1 Report

Comments and Suggestions for Authors

The paper in its current form faces significant challenges that prevent it from being ready for publication. The most pressing issues are a lack of clarity in its core objectives and contributions, a disconnect between its theoretical exposition and its stated policy aims, and a structure that is heavily skewed towards foundational theory without building a novel argument upon it. The author's response to the previous review, while addressing some formatting points, does not fully resolve the fundamental concerns about the paper's empirical grounding and conceptual focus. Here are some comments.

[1] The abstract is improved but remains vague. Phrases like “depict a theoretical framework for a correct point of view” and “green portfolio” need precise definition. What exactly is the “green portfolio”? How does it differ from existing portfolio approaches in agricultural finance?

[2] The introduction states the objectives but does not frame them within a clear research gap. It would benefit from a sentence like: “While existing literature has focused on X, this paper addresses the gap Y by developing Z.”

[3] Section 2 (Analysis of risk management policies) is a good survey of methods but is largely descriptive. It would be strengthened by a critical analysis that directly links the limitations of these methods (e.g., behavioral factors, data demands) to the need for the new framework the paper proposes.

[4] The “Worked Example” is a positive addition but feels isolated. It should be explicitly connected to the main argument—how does this example illustrate the failure of current models or the potential of the proposed “green portfolio”?

[5] Section 4 is competently written but are overly long and foundational for a research article. It looks like a chapter from a textbook. The core mathematical derivations (e.g., the detailed calculation of the risk premium) could be condensed or moved to an appendix to free up space for the paper's original argument.

[6] The central promise of the paper—to distinguish risk from uncertainty—is not fully realized. While defined early on, this crucial distinction is not consistently used as an analytical lens to critique existing policies or to build the proposed new framework. The paper largely operates within the paradigm of “risk” (known probabilities).

[7] Section 5 does not serve as a strong conclusion. It introduces new concepts like “catastrophe bonds” without adequately linking them to the theoretical body of the paper.

[8] The policy recommendations are generic (“holistic, interdisciplinary approach”) rather than specific, actionable, and clearly derived from the preceding analysis. The author's response to the previous review stated they worked on policy recommendations, but the result is still a list of well-known priorities rather than novel insights generated by this research.

[9] While the author states the language has been “checked”, the manuscript still contains numerous grammatical errors, awkward phrasing, and typographical issues (e.g., “J.E.L.” should be “JEL”). Engage a professional editing service or a fluent English-speaking colleague to correct grammatical errors and improve fluency.

[10] The author's decision not to include figures, based on the theoretical nature of the work, is a missed opportunity. A conceptual diagram illustrating the proposed “green portfolio” or the layered architecture of risk management would greatly enhance clarity.

Comments on the Quality of English Language

Engage a professional editing service or a fluent English-speaking colleague to correct grammatical errors and improve fluency.

Author Response

First of all thanks for your comments and suggestion that positively affect the quality of the work.

I formatted table 1.

I tried to increase the distinction between the concept of risk and uncertainty which should be more clear now.

I carried out in more details a discussion concerning the policy implications of this work.

5) Provide data-driven results for the worked example
See above comments; I didn’t use any data in this paper, but empirical applications could benefit
in the future.

6) Provide cleaner definitions between risk and uncertainty.
Thanks for your comment; I spent time to clean the distinction between risk and uncertainty in
the introduction.

7) A thorough language edits required.
Checked

8) Include figures
Since I carried out a theoretical framework, I didn’t provide any figures

Reviewer 2 Report

Comments and Suggestions for Authors

The Authors improved the paper. However, it is not clear what are the research hypothesis and research questions.

The level of discussion still can be improved.

Comments on the Quality of English Language

As above. The paper has been corrected bur in some aspects still can be improved.

Author Response

I would thanks your helpful comments which support the increase of the quality of the paper.

Round 3

Reviewer 1 Report

Comments and Suggestions for Authors

This manuscript presents a theoretical framework for income risk management in agriculture, focusing on the distinction between risk and uncertainty and advocating for a “green portfolio” approach that integrates private tools with public intervention. The topic is highly relevant, and the paper demonstrates a strong command of the theoretical and mathematical foundations of risk analysis.

The author has made clear efforts to address previous review comments, as evidenced by the cover letter. However, the manuscript in its current form remains highly theoretical and dense. Further revisions are needed to focus on clarifying its unique contribution, improving structural clarity, and strengthening the bridge between theory and policy implication. Here are some comments.

[1] Revise the abstract and introduction to clearly and concisely state the paper's novel theoretical contribution and the “gap” it fills.

[2] Restructure the paper to improve narrative flow. Introduce subsections and concluding summary paragraphs for complex mathematical sections (especially Sections 3 & 4) to highlight conceptual insights.

[3] Relocate the “Worked Example” to a more logical position and use it explicitly to demonstrate the practical implications of the theoretical models.

[4] Flesh out the “green portfolio” concept. Provide a conceptual figure illustrating its components and how they interact.

[5] Rewrite the “Final Considerations” to be a true discussion section that explicitly derives policy recommendations and research implications from the paper’s own theoretical analysis.

[6] Perform a thorough check to ensure all in-text citations and reference list entries match perfectly and conform to a consistent formatting style.

[7] A thorough proofread by a native English speaker is still recommended to improve sentence fluency and clarity.

Comments on the Quality of English Language

A thorough proofread by a native English speaker is still recommended to improve sentence fluency and clarity.

Author Response

Revise the abstract and introduction to clearly and concisely state the paper's novel theoretical contribution and the “gap” it fills.

Thanks for your helpful comment; I worked on the abstract trying to define concisely the aims and the theoretical contribution of the paper.

Throughout the paper I worked to clarify the paper's underlying idea, I decided not to modify the paragraph structure because it might alter the meaning of the discussion. The idea behind this structure was to introduce the need to view risk management in agriculture, and related public intervention, as a complex subject. This theoretical complexity (a concept expressed by the introduction of the "risk box" in Figure 1) corresponds to a methodological complexity. The theoretical section is essential for understanding how different assumptions about risk aversion, etc., can substantially alter empirical analyses and, therefore, misdirect public intervention policies.

[3] Relocate the “Worked Example” to a more logical position and use it explicitly to demonstrate the practical implications of the theoretical models.

thanks for your comment; I relocated "Worked example"

[4] Flesh out the “green portfolio” concept. Provide a conceptual figure illustrating its components and how they interact.

[5] Rewrite the “Final Considerations” to be a true discussion section that explicitly derives policy recommendations and research implications from the paper’s own theoretical analysis.

Thanks for your suggestion; I heavily modified "Final Considerations"

[6] Perform a thorough check to ensure all in-text citations and reference list entries match perfectly and conform to a consistent formatting style.

Done

[7] A thorough proofread by a native English speaker is still recommended to improve sentence fluency and clarity.

Done