This study highlights the high diversity of agricultural insurance systems in the EU. The level of risk is also very heterogeneous from country to country, from one farm type to another and from small to large farms. The development of agricultural insurances in each country is linked to the needs (risk level), but the MS policy to support the system is also a decisive factor. For non-systemic risks (hail), private sector offers suitable insurances, but for insurance products offering a wide coverage, there is a direct relationship between development and public support. The development of insurances in the livestock sector is generally lower than in the crop sector. Livestock risk management relies on sanitary assistance programs; major crises (diseases with high externalities) are covered by public aids.
Strategies to reduce income risk depend on the characteristics or risk and require a set of tools and instruments. The role for the government in risk management is to provide a sound business environment with competitive markets and clear regulations, to facilitate the development of market mechanisms and, when market fails, to provide instruments (in general from high levels of risks) according to reform principles.
Presentation on Risk and Crisis Management in EU was done by Bensted-Smith (EU Comission) at the International Conference in Madrid, Spain. The presentation provides recent information on agricultural risk management initiatives curently introduced in EU countries. The readers can get the update on the situation with agricultural insurance in European States. The conference was conducted in November 2006. This event was organized by the Ministry of Agriculture of Spain.
Farming is too risky for insurers and reinsurers to cover alone. That was the message from the International Cooperative and Mutual Insurance Federation's 16th meeting of reinsurance officials in Athens, when delegates said government help is needed to provide adequate cover for European farmers. The high risk nature of agricultural production means insurance is too expensive for farm budgets, yet producers' exposures are too high without it. Consequently, leading reinsurance industry figures believe governments should subsidize coverage to help EU farmers compete with their wealthier US counterparts.
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