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Actuarial evaluation of the EU proposed farm income stabilisation tool

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  • Pigeon, Mathieu
  • Frahan, Bruno Henry de
  • Denuit, Michel

Abstract

Recently, the European Commission proposed to introduce several risk management tools in the rural development pillar 2 of the CAP. One of them consists in providing co-financing support to mutual funds compensating farmers who experience a severe drop in their farm income. This paper analyses this new farm income stabilization tool for the Walloon region in Belgium, considering separately three groups of farms (crop, dairy and cattle farms). Relying on FADN data from 1997 to 2007, this analysis focuses on estimating the probability that such regional mutual funds would need to intervene to compensate farm net incomes and, in that case, the expected amount of each farm income compensation and the total expected amount of compensation. The budgetary compensation that would be required if an income insurance scheme was implemented to compensate Walloon farmers for their income losses is evaluated. Particular attention is paid to the cyclical pattern as well as to additional requirements that could be imposed to the EU income stabilisation tool.

Suggested Citation

  • Pigeon, Mathieu & Frahan, Bruno Henry de & Denuit, Michel, 2012. "Actuarial evaluation of the EU proposed farm income stabilisation tool," 123rd Seminar, February 23-24, 2012, Dublin, Ireland 122485, European Association of Agricultural Economists.
    • Handle: RePEc:ags:eaa123:122485
    DOI: 10.22004/ag.econ.122485
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    References listed on IDEAS

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    Cited by:

    1. Klimkowski, Cezary, 2016. "Farm Income Stabilization Effectiveness And Income Stabilization Tool," Journal of Agribusiness and Rural Development, University of Life Sciences, Poznan, Poland, vol. 41(3).
    2. Simone Severini & Giuliano Di Tommaso & Robert Finger, 2019. "Effects of the Income Stabilization Tool on farm income level, variability and concentration in Italian agriculture," Agricultural and Food Economics, Springer;Italian Society of Agricultural Economics (SIDEA), vol. 7(1), pages 1-22, December.

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