Weather insurance comes at the expense of payment entitlements

Funds need to be released to make broad weather insurance more attractive. This is at the expense of payment entitlements. According to State Secretary Martijn van Dam, there is no other way. He responded to parliamentary questions on Tuesday. LTO does believe that things should be done differently. The House of Representatives will make a decision next week. 

Answers to parliamentary questions of 4 July show that Van Dam expects that the entire POP budget of €2018 million will have been used by the end of 743. “That is why I see no reason to use money in a different way within the second pillar”, writes van Dam on Tuesday.

Money from CAP Budget
Martijn van Dam wants to make extra budget available for broad weather insurance and agricultural nature management. This concerns an amount of €30 million that will be transferred from the payment entitlements to the second pillar (POP3 funds). This equates to an additional 4,5% discount on payment entitlements.

Discount
Should more money for broad weather insurance be at the expense of the payment entitlements budget? LTO thinks not. According to the farmers' organisation, this means an extra discount of 4,5% on the payment of payment entitlements and only 12% of the budget is used from POP3 funds. When this money is not used, it must be returned to the EU. According to Jacob Bartelds, portfolio holder for the Environment, it is not necessary to shift budgets. Bartelds: “Talk to the extra demand for broad weather insurance and for agricultural nature management by shifting parts within the current program. Then 4,5% extra discount on payment entitlements is not necessary at all and you prevent money from going back to the EU.”

Broad weather insurance
An evaluation of broad weather insurance shows that high premiums, high deductibles and limited coverage are the main reasons for not taking out comprehensive weather insurance. In order to allow entrepreneurs to make more use of the broad weather insurance, the budget must be increased. The House of Representatives will make a decision on this next week.

© DCA Market Intelligence. This market information is subject to copyright. It is not permitted to reproduce, distribute, disseminate or make the content available to third parties for compensation, in any form, without the express written permission of DCA Market Intelligence.