Risk and Crisis Management in the Reformed European Agricultural Policy (original) (raw)
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Forum for Social Economics, 2023
The purpose of this article is to study the development of EU agricultural policies from a historical reconstruction perspective. The 1957 Treaty of Rome, the basis of today’s European Union, gave birth to the Common Agricultural Policy (CAP) in order to coordinate production across different European countries, to ensure food self-sufficiency and the certainty of supply to member states. Over time, several choices, as well as certain subsidies and policies (e.g. milk quotas) have been called into question as part of the liberalisation of the common agricultural market. Others persist, but continue to favour the unequal management of funds in favour of large companies specialised in intensive agriculture and livestock farming. These choices represent a loss in terms of both biodiversity and traditional farming knowledge and know-how. The decisive changes of the CAP at the institutional level have transformed the socio-economic as well as geographical landscape of Europe. It should be added that with the current crises—the COVID-19 pandemic, the war in Ukraine, and the ecological crises—the entire model is being called into question. Consequently, this article, after providing a brief overview, aims to reconstruct the common agricultural policies. It then provides an explanatory framework in quantitative terms of the French and Italian agricultural sectors to highlight what are, in the authors’ opinion, the limits of the CAP, even in the face of the crises mentioned above.
The New Instruments of Risk Management in Agriculture in the European Union
Procedia Economics and Finance, 2014
The specific character of farming was perceived since the beginning of the creation of the European Community. Initiation and systematic evolution of Common Agricultural Policy aim at harmonious development farmstead. Any negative events, especially catastrophic, don't allow to execute plans and it can be a cause of abandonment of farms by farmers. This can upset the situation on food market. European Community, in its regulations, allows and even recommends the use of various support instruments. In response to Commission Regulation (EC) No 1857/2006 of 15 December 2006 on the application of Articles 87 and 88 of the Treaty to State aid to small and medium-sized enterprises active in the production of agricultural products, subsidized crop and animal insurance were introduced in Poland. Much larger opportunities are offered by solution which are financed by assets derived from the mechanism of modulation and defined by Council Regulation (EC) No 73/2009 of 19 January 2009 establishing common rules for direct support schemes for farmers under the common agricultural policy and establishing certain support schemes for farmers. That can be wider range of subsidized crop, animal and plant insurance or mutual funds. Mutual fund is a mechanism that allows affiliated farmers pay compensation for economic losses incurred as a result of animal and plant diseases and environmental incidents. This regulation defines the financial rules of the fund and the possible use of this mechanism in the public and the EU. At the same time, there are many concerns about the practical implementation of this solution. Mutual fund can be a complementary tool for the protection of risks, which cannot be accepted by the insurance market. Experiences of Member States with regard to its use are small, but the examples of countries in which it operates (in this article indicates the Italian example) suggest that it may be a simple in its design but highly effective tool. And it will allow for more complete protection of agricultural production The paper tries to identify the organizational and financial solutions to the mutual fund concept and proposed the establishment of specific solutions for this mechanism in Poland. This paper will present a discussion of the benefits from the introduction of this solution on the Polish and European market for agricultural insurance.
Report on state and outlook for risk management in EU agriculture
2020
The aim of this deliverable is to find the opportunities to improve risk management to enhance the resilience of EU farming systems. Three specific objectives are defined: 1) Providing an outlook of the risk management strategies in the EU farming systems; 2) Defining the ways to improve risk management strategies; and 3) Assessing the ways through which risk management contributes to resilience. The focus of the resilience analysis is on the farming system, i.e. the resilience assessment considers not only farmers but also the other actors in the farming systems such as farmers' associations and cooperatives, value chain actors, financial institutions and the public administrations. To reach this end, a multi-stakeholder approach is followed considering two different regional scales: i) at local level to involve stakeholders with experience and knowledge at farming system level; for that purpose focus groups are held in 11case study (CS) regions across Europe; and ii) at Europe...
D 2.6 Report on state and outlook for risk management in EU agriculture
2020
The SURE-Farm project aims to analyse, assess and improve the resilience and sustainability of farming systems in Europe. Farming systems face a whole range of social, ecological, economic and political disturbances and changes, such as sharp market fluctuations, severe weather events, climate change, new technologies, changes in consumer preferences and in governance structures and so forth, operating at a range of scales (local, regional, national and global). Some stresses on the farm system can be predicted (e.g. retirement of farmers), while other shocks are more uncertain and unpredictable (e.g. flooding, sudden price drop, illness). Project’s WP2 aims to comprehensively understand farmers’ risk behaviour and risk management (RM) decisions, and to develop and test RM strategies and decision support tools that farmers can use to cope with increasing economic, environmental and social uncertainties and risks. WP2 contributes to the development of RM in EU farming systems by unde...
2020
Resilience is the ability to deal with shocks and stresses, including the unknown and previously unimaginable, such as the Covid19 crisis. The aim of this paper is to assess responses of farming systems (FS) to this crisis and to assess them from the perspective of resilience thinking. We build on a resilience framework developed in the SURE‐Farm project and on ongoing resilience assessments in 11 FS across Europe through which we have an in‐depth understanding of the ‘pre‐Covid19 situation’ in each FS. This includes insights whether an FS has an enabling (or constraining) environment, who are the relevant system actors beyond farms, and what are the social, economic and ecological functions to be delivered by the system. The analysis allows us to understand which resilience resources and strategies were mobilised in different FS and thereby to explain differences in the ability of FS to cope with and respond to the crisis. Furthermore, the approach enables us to put crisis response...
Financing risk management in agriculture in the light of the Common Agricultural Policy
2016
1. The paper discusses issues connected with supporting risk management instruments in agriculture. These issues are highly important as an agricultural producer is exposed to an immense amount of insecurity. Despite the progress in agricultural production owing to mechanisation, innovation and the introduction of the most beneficial plant varieties and animal breeds, an agricultural producer is not able to predict the production outcome, which is subject to factors beyond a farmer’s control which he can neither predict nor prevent. The source of the risk in question may be of a production or a market character. The former relates to the level of crops, healthy growth of animals, as well as the occurrence of unexpected and often swift changes of the weather like hail, drought, and ground frosts. The latter, in turn, is a consequence of changes within the agricultural market itself, which can be exemplified by the prices fluctuation and, as a result, the production profitability. The...
Managing the Risk in Agriculture Production: The Role of Government
European Countryside, 2016
The aim of the article was to define the essence and the role of state in managing the risk in agricultural production. Nowadays risk management is one of the core priorities of reformed CAP. Wherefore it was necessary to highlight the variety of tools and essay the reason why the farmers do not implement them. The main method applied in the work was a descriptive method and a dogmatic analysis of normative acts. Reference books and international analyses and reports were also used. The weather conditions, as well as climate change have fair impact on agricultural production, its quality and quantity, as well as farmers’ income. They are infrequent but lead to severe damage to a whole region, like the droughts occurrence this year. Such events fall under the catastrophic risk layer, for which market solutions plays a less important role, mostly due to public involvement. Due to the current legislation, Member States have the authorization for granting subsidies for farmers who had l...