Actuarial evaluation of the EU proposed farm income stabilisation tool

Mathieu Pigeon, Bruno Henry de Frahan and Michel Denuit

No 122485, 123rd Seminar, February 23-24, 2012, Dublin, Ireland from European Association of Agricultural Economists

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.

Keywords: Risk; and; Uncertainty (search for similar items in EconPapers)
Pages: 16
Date: 2012-02-23
New Economics Papers: this item is included in nep-agr and nep-eur
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:eaa123:122485

DOI: 10.22004/ag.econ.122485

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