The Mechanisms of the Single CMO and Risk Management Instruments under the New CAP

15-03-2012

This note analyses the European Commission’s proposals for reform of the common agricultural policy for the period 2014–2020. The analysis focuses on measures intended to respond to the volatility of agricultural markets. After explaining the possible justifications for public action aimed at mitigating and managing risks in agriculture, we will examine the effectiveness of the new measures that have been proposed, which include a crisis reserve and mutual funds for economic losses, as well as the effectiveness of the measures that will be kept in place. Our recommendations include in particular the establishment of transparent and credible rules for public action in order to promote the development of risk management markets.

This note analyses the European Commission’s proposals for reform of the common agricultural policy for the period 2014–2020. The analysis focuses on measures intended to respond to the volatility of agricultural markets. After explaining the possible justifications for public action aimed at mitigating and managing risks in agriculture, we will examine the effectiveness of the new measures that have been proposed, which include a crisis reserve and mutual funds for economic losses, as well as the effectiveness of the measures that will be kept in place. Our recommendations include in particular the establishment of transparent and credible rules for public action in order to promote the development of risk management markets.