Agricultural producers face a series of risks affecting the income and welfare of their households. These are mainly production risks related to weather conditions, pests and diseases, market conditions, liberalization policies, climate change, etc. In recent years the European Union has been considering a possible integration of risk management in the common agricultural policy and is analysing risk and crisis management strategies to provide an improved response to crises in the agricultural sector.
This report reviews the agricultural risk management systems in the EU-27 (candidate countries Turkey and Croatia are also analysed) with a special focus on types of agricultural insurance. The study contains a collection of data on the realities and modalities of agricultural insurance in Europe. This information mainly comes from fact sheets filled in by experts or consultants from the different European countries and data from the European Committee of Insurers (CEA). Many of these data were unpublished because there is no obligation for the insurance companies to report to the EU institutions.
The report quantifies and maps different types of risks, from climatic risks to yield and revenue risks. The role of Governments in helping farmers to face disasters is analyzed for every country: providing aid ex-post and offering or subsidizing insurances. The Member States definitions of crisis and disaster when authorising state aids are described and contrasted with the EU and international legislation. Aid is sometimes given on an ad-hoc basis through compensation schemes, or funds partially financed by the agricultural sector (on a voluntary or compulsory basis). Mutual funds, calamity funds and ad-hoc payments existing in European countries are summarised. The levels of ad-hoc payments per country are compared.
Agricultural insurances are fostered in a number of countries. The different types of agricultural insurance systems and key figures in each country are analysed. Some technicalities are described, such as reinsurance, triggers and deductibles. The relationship between Government involvement and insurance development is highlighted. Usually private companies insure only hail and fire, and the government subsidies and public reinsurance are needed to make possible the insurance of agricultural systemic risks.
One conclusion is that the risk management tools available in the Member States (MS) could be further developed. Conditions for a feasible EU-wide insurance scheme have been analysed. The possible amount of costs of an EU-supported insurance system has been roughly quantified for a few hypothetical scenarios. However, given the heterogeneous situation in the MS, the interest of a harmonised EU-wide system of agricultural insurances is debatable.JRC.G.3-Agricultur
