1

The implementation of CAP in the risk management field

Aleksandra Szelągowska, MARD

2

The risk management tools

• Subsidies to crop and livestock insurance premiums

• Subsidies to mutual funds• Income stabilization tool• Anti-crisis tool

3

Limitations of the implementation of aid

• The requirement of 30% damage to the

production of the whole farm• Reimbursement up to maximum 70 % for the

lost income• The individual income loss estimation per farm

4

A proposal of extending the aid

- abolition of 30% requirement,

or- an incorporation of the supplementary state aid to

an agricultural insurance in case of:

10 % damage to the crops or the headage of cattle - 30 % damage to the whole farm

5

Insurance companies’ role in providing the subsidies to insurance premiums

On the basis of an overall application submitted by an insurance company, a paying agency should pass the payments from  the European Agricultural Fund for Rural Development (EAFRD) intended for subsidies to insurance premiums for the insurance of crops and livestock against adverse weather conditions, directly to insurance companies who signed an insurance contract with a farmer – a form of a public-private partnership

6

The European Financial Stability Facility (EFSF)

A form of an reinsurance fund for the member states which implement the aid programmes for farmers who suffered adverse market conditions damage (for example the decrease of agricultural production prices) or adverse weather conditions damage

7

Flat-rate payments:- to the amount of agricultural production sold at

prices significantly lower than the forecast prices,

- to the area of damaged agricultural crops or to the number of compulsory slaughter of livestock from adverse weather conditions

8

Polish experiences in implementing subsidies to crops

and livestock insurance

9

Subsidies From the State Budget*1 euro = 3.9 zloty

Year Plan in the budget bill (in million euros)*

Execution (in million euros)*

2006 14.1 2.5

2007 53.9 8.1

2008 139.7 38.4

2009 38.5 33.4

2010 76.9 24.8

10

The number of insurance contracts

0

20

40

60

80

100

120

140

160

2006 2007 2008 2009 2010

the number ofsigned insurancecontracts inthousands

11

The area of insured crops

0

500

1000

1500

2000

2500

3000

2006 2007 2008 2009 2010

the area ofinsured cropsin thousandhectares