Abstract

Any risk in agriculture, finally, will lead in farmers’ income fluctuations. This fluctuation can result different effects on various income groups. In this study, Dynamic Stochastic Simulation (DSS) is used to investigate effect of mentioned program on income stabilization. The results indicate that small farms were more supported due to high variation of income in comparison with large farms. Although, the ratio of income standard error decreases in this group, is smaller than larger groups. This issue together with the reverse effect of fertility on stabilization ratio indicates that the insurance policy has some limitations to provide investment safety in agriculture, especially in the case of supporting small farms.