With the evident consequences of climate change, high price volatility, greater exposure to the agricultural global market and other uncertain factors, it is vital for European farmers to have access to suitable and appropriate risk management tools.
The Commission's agricultural and rural development department published today a market brief on the topic, describing the current state of risk management in European agriculture. The brief includes the different risks that exists, the instruments that can be used to prevent, mitigate or cope with these risks, and to what extent the available tools are used.
Various risk management tools exist, depending on the type and scale of the risk. Risks can be linked to price, production or income, but are also categorised depending on their frequency and on the scale of their damage. To deal with those, risk management tools need to be adapted.
Among the existing tools, the EU's common agricultural policy proposes a series of instruments to manage risks of different type and scale. However one of the main obstacles is the low uptake of these varied tools by farmers.
Other instruments include public-private tools, such as insurance or mutual funds, and private tools, such as for example non-subsidised insurance.