Brussels, 26/02/2002 (Agence Europe) - The Spanish Presidency of the EU Council recently published a memorandum offering paths of reflection on the setting up of a common insurance system in the Community. "The aim of the present memorandum is to demonstrate that the European agricultural sector will be more competitive and better adapted to new conditions of production that are looming, if, like other economic sectors, it has effective tools to manage its own risks. Agricultural insurance is one of these tools", the document explains.
So as better to assure the income of farmers, "we should envisage the possibility of introducing in the Common Agricultural Policy (Cap) a Community strategy of risk management, within which we would elaborate a common framework capable of facilitating the development of insurance systems in a Union country", says the Presidency, adding that the EU should also "begin studies on sectoral programmes for income stability" (definition of insurance programmes adapted to the conditions of the different farming sectors).
The Presidency calls on Member States to do more to strengthen the protection of agriculture and breeding against the consequences of natural and sanitary risks. "Experience so far in Community countries highlights the inability of the private insurance sector to place on the market guarantee systems against risks responding to the requests of farmers and breeders, other than through the intervention of the public authorities in the design and funding of insurance systems. To allow for an appropriate development of these systems, it is therefore necessary for the private and public actors concerned to collaborate in implementing them, through a system of partnership", the memorandum goes on.
The Spanish Presidency would like other Member States to seek inspiration from what occurs in Spain (as well as in the United States and Canada), where the insurance sector "offers farmers multi-risk cover, insurance on return and even income insurance" (in the great majority of European countries, there is only insurance providing for minimum cover against hail and fire). Spain even proposes offering its experience for all proposals relating to the study, design and introduction of specific insurance systems for the farming sector.
The memorandum has a part listing the instruments currently available to European farmers and breeders to stabilise their revenue: - strategies in the framework of farms (diversification of production, saving of financial surpluses or diversification of sources of revenue); - risk externalisation strategies for farms (notably, systems of production contracts); - public assistance instruments (especially in case of natural disaster); - specific instruments in the framework of the Cap (direct aid that is an important mechanism for supporting income). But, according to the memorandum, many types of production do not benefit from this type of protection, like fruit, vegetables, potatoes or pig farming.