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On the effectiveness of mutual funds to cope with lasting market risks: The case of FMD in Brittany

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  • Rault, Arnaud

Abstract

Foot and Mouth disease, like other epizootic outbreaks, can have wide and lasting impacts exceeding the agricultural field. Within Europe various ad hoc policies exist to cope with these consequences. In this paper we develop a dynamic CGE model allowing us to simulate a FMD outbreak, its economic consequences and the effect of the implementation of a mutual fund as a structural risk management policy. Our results show that a financial support to farmers thanks to the mutual fund may encourage a quicker recovery from the market losses, especially helping to rebuild the cattle herds after a period of trade bans. However, counterproductive effects may be encountered in the case of mandatory participation of farmers to finance the mutual fund.

Suggested Citation

  • Rault, Arnaud, 2012. "On the effectiveness of mutual funds to cope with lasting market risks: The case of FMD in Brittany," 126th Seminar, June 27-29, 2012, Capri, Italy 125994, European Association of Agricultural Economists.
    • Handle: RePEc:ags:eaa126:125994
    DOI: 10.22004/ag.econ.125994
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    References listed on IDEAS

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    Keywords

    Agricultural and Food Policy; Agricultural Finance; Risk and Uncertainty;
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