Tag: insurance

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COMAGRI co-rapporteur proposes Omnibus Regulation amendments

We are pleased to bring you this guest post by Paolo de Castro MEP who is a co-rapporteur for the European Parliament’s AGRI Committee on the so-called Omnibus Regulation which proposes to amend the CAP basic acts with a view to their simplification. Mr de Castro introduced his draft report at the AGRI Committee last Monday 13 March, and it is now open for amendment by other AGRI Committee members until March 21st. The following is an edited version of his remarks.

The Omnibus proposal represents, despite its significant management and administrative complexity, an important opportunity to improve and solve the major issues that our farmers have been facing over the first three years of application of the new CAP. We welcome such initiative from the European Commission, but I believe the Parliament has the duty to make the Commission’s proposals more ambitious, while complying with the two main objectives of the overall text, which are procedural simplification and red tape cutting.… Read the rest

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The US farm safety net

In its most recent Farm Bill in 2014, the US eliminated its decoupled direct payments, in part because it was hard to justify making income support payments to farmers at a time when farm incomes were booming due to favourable prices. Instead, it substituted a new set of counter-cyclical payments as part of the US farm safety net. At the same time, it expanded the scope of its federal crop insurance programmes by introducing a new programme to cover ‘shallow losses’ not normally covered by these programmes.

These US developments have led some in Europe to argue that the CAP should move in the same direction. Direct payments should be reduced and the money used instead to support insurance products for farmers or to fund counter-cyclical payments. This blog post does not discuss the merits of these proposals (for discussion, see this report prepared for the European Parliament’s COMAGRI). The US programmes are not widely known.… Read the rest

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Use of risk management tools in the CAP

It has long been recognised that greater price and income volatility would accompany the move to a more market-oriented Common Agricultural Policy (CAP). Already in the run-up to the Fischler Mid-Term Review (MTR) in 2003 which led to the decoupling of direct payments, the Commission published a working document on risk management tools for agriculture, with a special focus on insurance, in 2001. The Council MTR agreement mandated the Commission to study specific measures to address risks, crises and natural disasters that agriculture may face. This led to a Communication from the Commission in 2005 on risk and crisis management in agriculture which discussed different instruments that could be implemented in the CAP. Some tentative steps were taken in the 2008 Health Check to encourage member states to give greater attention to this issue.

Yet farmers, processors and policy-makers have struggled to respond. Risk management instruments supported by the CAP up to 2013 were not very successful.… Read the rest