A safety net would allow the government to cover serious disturbances in the market, resulting from climatological, veterinary or phytosanitary calamities or temporarily low prices. LEI investigated the possibilities
The following issues are important in terms of a safety net in the CAP after 2013:
- In the case of climatological, veterinary or phytosanitary calamities, the current public and private insurance agencies and funds offer a sufficient basis for more joint optimisation in the future with the goal of reducing production risks.
- A publicly-financed income stabilisation scheme should be critically observed as a part of the reforms in the CAP after 2013.
- Interventions for dairy and grains should stay at a low price level for the medium and long term so as not to encourage extra production, until a private system is applied.
- More awareness must be generated for the futures market as a private initiative, so that entrepreneurs are given the opportunity to cover price risks.