2454 final report.pdf - Agra CEAS Consulting

Evaluation of the Community Plant Health Regime: Final Report
DG SANCO Evaluation Framework Contract Lot 3 (Food Chain)
any additional cost incurred by a farmer as a result of exceptional measures taken with the
objective of reducing supply on the market concerned or any substantial loss of production.
Article 70 further defines the conditions and limits for such contribution, as summarized
below for the plant health area:
The plant disease or pest infestation must have destroyed more than 30 % of the average
annual production of the farmer in the preceding 3-year period or a 3-year average
based on the preceding 5-year period, excluding the highest and lowest entry;
The financial contribution granted per farmer shall not exceed 65 % of the insurance
premium due. MS may limit the amount of the premium that is eligible for a financial
contribution by applying appropriate ceilings;
Coverage by crop and/or plant insurance shall only be available where the occurrence of
the outbreak of a plant disease or pest infestation has been formally recognised as such
by the competent authority of the MS concerned;
Any financial contribution shall be paid directly to the farmer concerned;
MS expenditure on the granting of financial contributions shall be co-financed by the
Community (from the up to 10% of their national budget ceilings allowance under
Article 68) at a rate of 75 % of the financial contribution.
Article 71 foresees that MS may provide for financial compensation to be paid to farmers for
economic losses caused by the outbreak of an animal or plant disease or an environmental
incident by way of financial contributions to mutual funds. Mutual funds are defined as a
scheme, accredited by the MS in accordance with its national law, for affiliated farmers to
insure themselves, whereby compensation payments are made to such farmers affected by the
economic losses.
The financial contributions may relate to (a) the administrative costs of setting up the mutual
fund, spread over a maximum of 3 years; (b) the repayment of the capital and interest on
commercial loans taken out by the mutual fund for the purpose of paying financial
compensation to farmers; (c) the amounts paid by the mutual fund from its capital stock as
financial compensation to farmers.
As imposed for the contribution to premiums, any financial contribution shall not exceed 65%
of the cost. Any cost not covered by financial contributions shall be borne by the affiliated
farmers. Also, MS expenditure on the granting of financial contributions shall be co-financed
by the Community at a rate of 75 % of the financial contribution.
France is currently analysing the possibility of using such a mechanism.
Because both mechanisms (i.e. insurance premiums and mutual funds) give the possibility to
cover the economic losses incurred by farmers as a follow up to a pest outbreak, they are
complementary with the solidarity regime as currently implemented. As outlined in the 2007
FCEC evaluation of the solidarity regime, this regime covers the costs paid by public funds
for inspection and testing, destruction, and disinfection and does not cover the economic
losses incurred by farmers. The solidarity regime had foreseen the coverage of financial losses
other than loss of earnings due to prohibition or restriction but these have been only recently
Food Chain Evaluation Consortium 263