Study on risk management in EU agriculture : case study no 1 : transition from single-peril to multi-peril crop insurance with or without public support under Article 37

The main objective of the case study is to analyse the transition from single-peril insurance to multi-peril crop insurance (MPCI), being either pure private-based or public-private under Article 37 (Regulation (EU) No. 1305/2013). Policy makers in Germany and the Netherlands have the ambition to create conditions for liberalisation. Before Article 70 (Regulation (EC) No. 73/2009) became available, allowing public subsidies from CAP, both Member States did not subsidise premiums (besides subsidies for pilots) and did not establish disaster funds in contrary to France and Italy. Subsidising MPCI in Germany is politically controversial and not considered as a step forward. Within the liberal Dutch policy context, a temporarily premium subsidy was agreed upon between policy makers and the farming community. Recent impact study revealed that MPCI is still not commercially viable in the Netherlands and the subsidy scheme is prolonged. Existing public-private insurance schemes were transformed in France and Italy to align with EU regulations for subsidising crop insurance instead of financing it from the national disaster funds as it was before. The transition in the Netherlands was more disruptive, since premium subsidies as well as MPCI were introduced simultaneously. Although private-based MPCI is introduced recently in Germany, uptake is lagging compared to France and Italy (and to a lesser extend the Netherlands). In general, a pure private-based MPCI with substantial outreach is difficult to establish even in mature single-peril crop insurance markets, as in Germany, and this is in fact world-wide the case.