The potential impact of the income stabilisation tool (IST) is analysed on a panel of Italian farms. The paper extends the existing literature by investigating two implementation issues: level of aggregation of mutual funds (MF); definition of farmers contribution to MF. Enlarging the MF to cover more sectors/regions allows to better pool the risk making the indemnifications less variable over time. Regarding the second issue, a flat contribution is compared with a contribution proportional to the expected income of each farm. The latter approach generates a less unequal distribution of benefits among farms and more effectively reduces income variability.