Perspectives of Income Stabilisation Tool : The Case of Polish Agricultural Sector

Under the new financial framework for the period 2014 to 2020 the shape of Common Agricultural Policy (CAP) will undergo several important changes. With regard to the risk management policy new regulations allow every member state to establish subsidized agricultural insurance scheme and incorporate it into the European Union Rural Development Policy (RDP). In this paper, financial consequences of implementation Income Stabilisation Tools (IST) will be evaluated. IST is one of three new instruments in RDP supporting agricultural insurance. Farmers’ income risk reduction and minimum insurance premium is assessed on the basis of data collected by Farm Accountancy Data Network. The analysis is preceded by presentation of theoretical background and major problems of global and Polish agricultural insurance market. Some disadvantages of currently used traditional agricultural production insurance schemes are also presented in the paper