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For instance, following the dioxin crisis, there was talk of creating a calamity fund, but finally dioxin and PCB contamination was included in the health fund. Voluntary solidarity funds are complicated due to the individualistic mentality. There is not really an urgent need for new insurance policies. Currently, the disaster fund and the health fund are available. Moreover, questions arise with respect to affordability.

However, what is under discussion is a kind of income-stabilising mechanism, given the great volatility of prices via cooperative solidarity, taxes, insurance, etc. In addition to drawing up an inventory, a number of risk management instruments have been studied in detail: the agricultural disaster fund, the health fund, the Agriculture and Fisheries Fund, the VLIF, taxes and insurance.

The agricultural disaster fund covers natural risks 1 of exceptional scale, i. The agricultural disaster fund is a public fund with only state funding and is a federal competence. The main climate-related risks that have occurred and qualified for recognition as agricultural disasters have been exceptional or excessive rain, drought and, to a lesser extent, severe or late frost. The disaster fund does not cover risks that can be insured privately, such as hail. Storms are covered via the natural disaster fund.


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Mainly damages resulting from rain and drought have been recognised as agricultural disasters in the past. Generally speaking, the compensation is relatively limited, both where frequency and total budget are concerned. Two types of health funds exist: the animal health fund and the plant fund. These are also a federal competence.

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The plant fund is largely limited to potatoes. The potato fund compensates for direct damage resulting from brown rot and ring rot. The animal health fund only compensates for direct losses and the management of diseases whose control is regulated by law i.

Indirect losses and losses due to unregulated industrial diseases economic or commercial diseases are not compensated for.

The fund is built up via obligatory sector-dependent contributions. The federal authorities do not compensate for direct damage, but they do pay for the operational costs involved in the control of animal diseases.

Managing Risk in Agriculture

With the permission of the European Commission, Flanders can compensate for indirect damages via state support see the Agriculture and Fisheries Fund and the Flemish Agricultural Investment Fund. After the regionalisation the Agriculture and Fisheries Fund has continued the management and the specific duties of the former federal Funds for Plant Production and Animal Health and Animal Quality. Under certain circumstances the fund can compensate for economic damage.

The contributions come solely from within the sector. There is no mechanism for automatic co-financing by the European Union. The fund recently participated in the compensation for economic damage as a result of the threat of bird flu in the autumn of and the spring of In addition, support is possible as compensation for damages suffered.

This support is financed exclusively with Flemish funds. Support can be granted for damages resulting from unforeseen circumstances such as natural disasters, unfavourable weather conditions or the outbreak of animal or plant diseases. For cases of damage caused by natural disasters and exceptional weather conditions the regulations do not provide for an immediate practical solution.

In the spring of support measures were in place to compensate for the damage resulting from the bird flu. Concretely, there were two measures: support in the form of a bridging loan and support in the form of a capital subsidy.

Platform for Agricultural Risk Management (PARM) - IFAD

There were approved applications only for the latter measure. Furthermore, the Flemish Agricultural Investment Fund can lend support to businesses with financial difficulties regional support. In , as a result of the energy crisis in horticulture, a regional guarantee on bridging loans and support in the form of bridging loans were granted.

The amount of support is equated with that of an interest subsidy over three years on a loan amount. In case of a severe crisis the role of the financial institutions banks is also important, e. Where taxes are concerned, if there is loss of production as a result of climate conditions or plant or animal diseases and the standard return is not used, this loss is accounted for via income tax.

Individual deductions comprise losses of crops and death of animals, veterinary fees and medicines. Insurance contributions towards a guaranteed income can also be deducted from the semi-gross profit. The majority of insurance policies with the highest degree of participation are insurance policies covering certain personal and responsibility risks private insurance, agri-business support. The principal insurance companies allow considerable coverage of buildings and their contents via fire insurance and related policies storm, natural disasters, etc.

There is no insurance for market and price risks, and insurance for production risks is scarce. The coverage of plant production in the field and animals is limited. For plant production there is hail insurance, but participation remains rather low except for certain sub-sectors of horticulture. The cost is felt to be rather high and a number of businesses, especially smaller ones, cannot afford it. In greenhouse horticulture there is a very common crop damage insurance. In animal production valuable breeding cattle are insured individually against diseases or accidents.

Annals of Agricultural and Environmental Sciences

Some insurers offer insurance for cattle as a group, concretely for dairy cattle enterprises, in which case a compensation is paid in case of death or emergency slaughtering following a disease or accident. In no case, however, will animal insurance cover damage resulting from diseases that can legally be controlled. In pig and poultry breeding there is insurance for damage resulting from climate changes and growth factors.

In the European Union Member States damage caused by natural disasters and climate-related risks is compensated for via ad hoc government aid or public funds. In addition, insurance policies are available for a number of risks and products. Insurance systems vary considerably as to organisation, coverage, complexity and government support.

In most Member States a few limited private insurance products are available, the most common of which is hail insurance. In some mainly Southern European Member States more extensive insurance policies have been developed with substantial public support.

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In exceptional circumstances ad hoc market support is possible as well. Generally speaking, there is no public support for indirect losses. Indirect losses are only covered partly. Private insurance usually covers death and loss of production as a result of accidents and some non-epidemic diseases. More often than not, epidemic diseases are excluded. Global policies for more common industrial diseases are also rare. Finally, private funds generally only include a limited number of specific diseases.

In the Netherlands , hail, wind and storm can be insured privately. Additionally, there is rain insurance and frost damage insurance for fruit growing , which receives government support via non-proportional reinsurance. In businesses took out rain insurance. The total insured amount was million Euros. Insuring indirect damage resulting from animal diseases is only possible in some European Union Member States. However, in Germany private insurers are prepared to insure against indirect losses as a result of contagious animal diseases, even those caused by a standstill interruption of business activity and losses in restriction zones , without any kind of government support.

The degree of participation is relatively high. The harvest insurance with premium subsidy in France originally comprised only the classical hail insurance for vegetables and fruit. In this experiment was extended to more crops and more risks hail and frost for orchards and vineyards, multi-risk insurance for cereal and oil and protein crops.

This requires the obligatory inclusion of four risks hail, drought, flooding and frost. Various crops can be insured vineyards, orchards, cereal, industrial oil and protein crops and vegetable growing. Two types of insurance are possible: insurance per crop and insurance per company. In there were 65, contracts, only of which insured per company; the support involved amounted to 21 million Euros. Besides the classical and most common harvest insurance, there are a number of recent initiatives: crop yield insurance in potato growing and comprehensive insurance against natural risks at company level.

Plant production can be insured against heavy hail, fire, frost, wind, flooding, drought, siroccos, heat waves, torrential and continued rains, diseases caused by climate conditions and the impossibility to harvest due to climate conditions. Animal production can be insured against accidents, death or emergency slaughtering, attacks by wild animals, floods, forest fires, complications during births, the birth of dead calves, economic consequences of certain diseases such as tuberculosis, BSE, brucellosis or peripneumony, and, finally, death as a result of certain diseases.

In the United States there is an extensive insurance system for plant production. The Government subsidises the premiums, grants subsidies for operational and administrative costs, and takes part in reinsurance programmes. Producers are insured against drops in production as a result of natural causes such as drought, excessive precipitation, hail, wind, frost, insects and diseases. Finally, two smaller programmes are currently in place with respect to crop yield insurance at the company level. In any given year, CAIS compensates for loss of income as a result of weather conditions, diseases and low market prices.

Although it is not really an insurance policy, CAIS has several characteristics of a fully subsidised income insurance programme at the company level. In addition, there is a production insurance programme for plant production.