Spanish agriculture is campaigning for the development of agricultural insurance

This article is part of our special report Economic viability in the next CAP.

Spanish farmers and stockbreeders want the Common Agricultural Policy (CAP) to redirect its financial resources to a system of agricultural insurance. EURACTIV’s partner EFEAgro reports.

Farmers face many challenges: volatile prices, trade wars, the effects of climate change or trade agreements.

The Spanish agri-food cooperatives and agricultural organisations Asaja, COAG and UPA are all calling for flexible, efficient tools to respond to market crises.

As the Spanish minister for Agriculture, Fishing, Food and the Environment, Isabel García Tejerina, recently pointed out, the negotiations on the future CAP (post-2020) are conditioned by Brexit, the budget, the European calendar and sustainable development objectives.

All this directly affects the European sector, which exports the most food in the world.

Brussels is drafting a law to improve the functioning of the agrifood chain and thus increase the income of farmers and stockbreeders by protecting them against unfair trade practices. Producers view this project with hope but also with caution, as the power balance in price setting is a task that many consider essential in the new CAP.

Volatile market

The director of European and international affairs of Cooperativas Agroalimentarias, Gabriel Trenzado, maintains that “the current mechanisms are not sufficiently responsive and robust to prevent crises.”

“Intervention measures need to be taken and agreements on withdrawing a product from the market reached in a concerted manner. What is happening with the volatility is that with a fragmented sector and an imbalanced chain, producers have to face long periods of low prices. What we need are market management measures and a more structured producer sector,” Trenzado said.

As the director of international relations at Asaja, Ignacio López, points out, “the most recent reforms of the CAP have dismantled the public management measures and demonstrated that the market was not efficient enough to overcome the effects of huge volatility.”

“Given this reality, the EU needs to put in place flexible, efficient tools to respond to these crises. The market is an essential component in farmers’ incomes, which is why the CAP has to be sure to facilitate a better orientation of our production on the market.”

The secretary general of COAG, Miguel Blanco, said that “the EU must change the direction of its policy of market deregulation and the liberalisation of trade and introduce mechanisms that stabilise the agricultural markets and guarantee farmers prices that cover the production costs”.

Agricultural insurance: the Spanish example

Just recently, Jaime Haddad from the agriculture ministry stood up for Spain and its system of agricultural insurance, which is the most developed in the whole of the EU.

This system, in which the number of policies has tripled and which beats the record for capital insured, is intended for farmers and stockbreeders but also for aquaculture and forestry. The sector is convinced of its usefulness but is asking for improvements and more aid so that farmers can benefit from these insurance policies.

In this respect, Gabriel Trenzado believes that the funding of this system can be improved, that it can be extended to all products and made obligatory so as to make it more robust and enable it to benefit from economies of scale.

Asaja president Pedro Barato is calling for ‘positive discrimination’ for agricultural organisations as this is where farmers and stockbreeders turn to request assistance. He is also asking for more State support for agricultural insurance and would like the system to be adapted to the climate change variable.

Miguel Blanco wants a larger share of the state budget to be devoted to agricultural insurance in order to reduce the cost of policies and contribute towards the universalisation of the system. “Risk management must be the cornerstone of the agricultural policy and insurance policies are very important tools in this management.“

The UPA believes that what is needed is “a system of agricultural insurance that acts as a safety net, does not abandon professionals in the sector and prevents the closure of farms in a context in which the climate situation is becoming increasingly complicated.  For that, an increase in the budget dedicated to this system is essential.”

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