A new European farming insurance scheme
Farming income has always been subject to significant risk. Not only are farmers at the mercy of catastrophic events but production can be affected by many factors, disease for example, and fluctuating prices. Traditional insurance systems have been developed to cover certain aspects of income such as yield insurance to cover output or production and price insurance. A European Commission report suggests that European farmers are offered mainly classical insurance systems. However, none of these offer farmers adequate coverage to protect their revenue. This has the net effect of keeping farmers clinging to dependency on government subsidies and shying away from more adventurous, possibly higher return ventures. The prime aim of the Aginsurance project is to develop an optimal self-sustained, market-based agricultural insurance system. This innovative approach for Europe will allow farming households to manage and minimise their risks. Extensive comparison and contrast and analysis of different systems in agricultural insurance have been produced. Aginsurance has published several policy reports and participated in international conferences. Abstracts and presentations are available on the project website at http://www.aginsuranceproject.com. The website has also proved to be a valuable source of information for farmers and insurance experts featuring pages on key concepts of insurance, polls and recent media coverage on the topic. Research so far in the project has revealed some interesting statistics. For example, there is a huge variety of risk factors among EU countries. In terms of marginal probabilities Greece is the highest risk contributor and the countries in northern Europe have the lowest risk contribution. Future project deliverables will focus on creating a unique index using data from farmers' revenues and costs as well as weather. Including weather information in each region will include data such as rain per hectare and extreme temperatures. Aginsurance members expect their insurance model to be implemented within the near future. Successful application will allow farmers to stabilise their incomes. Training schemes for farmers will be introduced when the scheme has been finalised.
