Farmers’ income stabilisation: comprehensive set of tools, but low uptake of instruments and overcompensation need to be tackled

Summary:

Risk is inherent in the agricultural sector therefore farmers need to develop strategies to address losses following climate events or plant and animal diseases and price volatility. The common agricultural policy (CAP) includes instruments to support risk management by farmers and respond to crises. The recent CAP reform proposals aim to increase the focus on risk management. We found that the CAP offers a comprehensive range of preventive instruments to increase farmers’ resilience, but that the impact of these on farmers’ behaviour is limited. The use of EU support for insurance remains low and has benefitted only a fraction of farmers. No specific criteria were used to consider the use of exceptional measures following the Russian ban. We also found that the EU support for withdrawing products for free-distribution was costly leading to some overcompensation cases. We make recommenda􀆟ons to the Commission, aimed at encouraging farmers to better prepare for crises, designing and monitoring of support for insurance, clarifying the criteria for triggering and ending exceptional measures, and adjusting compensation for withdrawal operations.

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