expenditure. In other words, as disaster relief increases, expenditure on ARM tools tends to decline, pos- sibly because such aid may render market-based risk management options less attractive. This pattern may also be influenced by moral hazard: when farmers expect state aid, they may be less motivated to adopt pre- ventive ARM strategies. In parallel, given the precedence of providing state aid, farmers might anticipate receiving it and therefore choose not to adopt expenditure ARM. It is important to recognize that state aid ulation between risk transfer and risk coping instruments at national level. As already noted, if farm- ers expect that governments would cover large losses, they might reduce their ARM uptake (or/and invest- ments in prevention), relying on ex-post payouts instead. This could distort insurance markets with private