Summary
Higher frequency and intensity of extreme weather events have increased farmers’ risk exposure, which has increased the need for integrated risk management. EU Regulation No. 1305/2013 allows subsidies for insurance instruments, for mutual funds compensating production losses, and for mutual funds to compensate for income losses. The EU toolkit in this respect has been largely under‐utilised, and an integrated EU policy for risk management has not been developed. Comparing the situation in different EU Member States leads to conclusions on options for EU policymakers to consider. The existing EU technical documents explaining the content and details do not provide clear explanations and interpretation of the current regulations and so more efficient guidelines for Mutual Funds and sectoral Income Stabilisation Tools should be developed. This could be facilitated by establishing a platform for public consultation, knowledge sharing and learning which would include stakeholders, farmers unions’ representatives and academics, to help the process of building shared experiences or even common benchmarks. The platform would be part of a dissemination and innovation effort to capitalise knowledge in a learning curve and would act as a catalyst for the implementation of MFs and ISTs.
Extreme weather events have strong impacts on agriculture and crop insurance. In France, drought (2003, 2011, 2017, and 2018) and excess of water (2016) are considered the most significant events in terms of economic losses. The crop (re)insurance industry must estimate its financial exposure to climatic events in terms of the average annual losses and potential extreme damages. Therefore, the objective of this paper was to develop a model that links meteorological indices to crop yield losses with a specific focus on extreme climatic events. We designed a meteorological index (DOWKI: Drought and Overwhelmed Water Key Indicator) based on a water balance cumulative anomaly that can explain drought and excess of water at the department scale. We propose a crop damage model calibrated by combining historical yield records and the DOWKI values. To estimate the financial exposure of insured crops at a national level, stochastic simulations of the DOWKI were performed to produce one thousand years of yield losses. Our objective was to estimate the effect of climatic extremes affecting the global production. Simulated average annual losses and the possible maximum claim for three crops (soft winter wheat, winter barley, and sunflower) are presented in the results.
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