Risk is inherent in the agricultural sector, and farmers have to develop strategies to address higher price volatility, increasing pressure on income and risks stemming from climate change. Greater market orientation of the Common Agricultural Policy (CAP) led to more exposure to market risks and expectations that risk management should become more important in the CAP.
The aim of this market brief is to describe the current state of risk management in EU agriculture. Different drivers of agricultural risk are explained and perceptions, attitudes and responses of farmers towards risk and how risks can be managed on farm are discussed.
The different private or public-private instruments that can be used by farmers to prevent, mitigate or cope with agricultural risks are reviewed subsequently, followed by a discussion of risk management instruments that are present in the CAP to mitigate catastrophic risks. This brief explains how these instruments work, describes the extent to which they are currently used by farmers, and identifies obstacles in the uptake of the instruments in the EU.
Source – https://ec.europa.eu