Income Stabilisation in a Changing Agricultural World: Policy and Tools

This paper attempts to draw conclusions regarding Risk Management instruments (RMI) for potential development or expansion in the EU (Garrido and Bielza, 2007). Using data from EU countries, compiled in the course of two EU research projects about RMIs, we perform a cross-sectional analysis of the role of agricultural insurance and ad hoc payments. Tests of comparisons of means of key insurance data reveal the impact of insurance policies and the degree of competitiveness in supply side. While the presence of subsidies explains differences across EU member states' (MSs) insurance data, the degree of competitiveness is not a differentiating factor. In the last part of the paper, we rate a number of RMIs on the basis of a number of criteria. We conclude that RMIs on EU scale should be flexible enough to accommodate very diverse risk contexts, farmers’ demands and ongoing national programmes. Our conclusions may be useful in defining RMIs within the scope of European Agricultural Policy, and as an extension of similar studies (Cafiero et al. 2005; European Commission (2006a)