Reference : The possible implementation of the income stabilisation tool in Wallonia
Scientific congresses and symposiums : Unpublished conference/Abstract
Life sciences : Agriculture & agronomy
The possible implementation of the income stabilisation tool in Wallonia
Burny, Philippe mailto [Université de Liège - ULiège > Agronomie, Bio-ingénierie et Chimie (AgroBioChem) > Modélisation et développement >]
International Conference "The CAP and national priorities within the EU budget after 2020"
11-13 June 2018
Institute of Agricultural and Food Economics - National Research Institute (Poland)
Lidzbark Warminski
[en] Income stabilization tool ; Wallonia ; Belgium ; Farm income ; Milk production ; Cattle ; Crops
[en] After several reforms of the Common Agricultural Policy and the disappearance of intervention prices and production quotas, price volatility is the rule on agricultural markets and, as a consequence, farm income is more and more unstable and unpredictable. In such conditions, risk management becomes an important tool within the CAP (regulation (EU) n° 1305/2013, regulation (EU) 2017/2393). In such a context, the Walloon administration dealing with agriculture ordered a preliminary study in order to examine the possible implementation of the income stabilization tool (IST) in the region. The paper deals with examples from Canada, the United States, Spain and Italy and with scenarios about Wallonia. Two hypotheses were tested : an income loss of 20% and 30% compared to the mean income of the previous period of three years. The used data come from the FADN network. The tested period covers the years from 2010 to 2016 included, so that the implementation of the IST is examined for four years, from 2013 to 2016. The calculations are made on the total FADN sample (more than 400 farms) on one hand, and on four specialized farm groups : bovine meat, milk, general crops, crops and cattle, on the other hand. The results show that the IST would not have been implemented when the total sample is considered. When specialized farm groups are considered, the IST would have been implemented only for the threshold of 20% of income loss, once for the dairy, once for the general crops and once for the crops and cattle specialized farm groups. The first condition being fulfilled, the calcultations are made for each individual farm, and Financial compensations are granted to farms which have registered an income loss of at leat 20%. Then the mean compensation for the specialized farm groups is extrapolated to the regional Walloon level. The compensation is fixed at 70% of the loss and the public support to this compensation is fixed at 70%. The public subsidies must be co-financed at least by 25% from the EU budget. Finally, it appears that the potential cost of the IST is affordable, but the participation of the farmers in this mutual fund is uncertain, making the success of the IST still doubtful.

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