Comparative Analysis of Risk Management Tools Supported by the 2014 US Farm Bill and the CAP 2014-2020

15-12-2014

The 2014 Farm Bill includes risk management tools as an integral component of national agricultural policy whereas the CAP 2014-2020 seems to include them as an afterthought. While EU principles are sound, policies remain in limbo. They suffer from a double dichotomy: two CAP pillars and two administrative levels for implementation. Ten recommendations are proposed for transforming the current state of limbo for EU agricultural risk management policy into a coherent CAP linked to world markets. They cover (1) EU coordination between public safety nets and private risk management tools, (2) flexible funding with improved reserve funds and precautionary savings, and (3) field tests to take full advantage of the creativity of private-public partnerships and to create an experience curve.

The 2014 Farm Bill includes risk management tools as an integral component of national agricultural policy whereas the CAP 2014-2020 seems to include them as an afterthought. While EU principles are sound, policies remain in limbo. They suffer from a double dichotomy: two CAP pillars and two administrative levels for implementation. Ten recommendations are proposed for transforming the current state of limbo for EU agricultural risk management policy into a coherent CAP linked to world markets. They cover (1) EU coordination between public safety nets and private risk management tools, (2) flexible funding with improved reserve funds and precautionary savings, and (3) field tests to take full advantage of the creativity of private-public partnerships and to create an experience curve.