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The actual Common Agricultural Policy (CAP 2023-2027) incorporates adaptation to climate warming and environmental challenges through various mechanisms, including strategic plans, flexible funding, and specific interventions. Member States are required to develop CAP strategic plans outlining their interventions to achieve EU objectives, which include climate action, environmental care and biodiversity.

Several mechanisms are enhancing resilience and adaptation to climate change as part of the current CAP. Here is a more detailed look:

• CAP Strategic Plans
  Each Member State drafts a plan with a dedicated climate risk assessment and specific adaptation objectives including actions and funding to enhance resilience.
• Climate Budget Target
  At least 40 % of the overall CAP budget (Pillars I & II) is earmarked for climate action including mitigation and adaptation measures.
• Eco-Schemes (Pillar I)
  Voluntary annual payments reward sustainable practices that boost resilience, such as crop organic farming, diversification, soil cover, agroforestry, and conservation tillage.
• Agri-Environment-Climate Measures (Pillar II)
  Rural development funds support water-efficient irrigation, biodiversity, soil health improvement, landscape restoration and hail/flood/drought prevention infrastructure.
• Promotion of Risk Management Instruments
  Subsidized crop insurance, mutual funds, and income stabilization tools help farmers manage increasing climate volatility and the associated extreme weather losses.
• Knowledge & Innovation
  Advisory services, training, and R&D promote climate-smart technologies, early warning digital tools for monitoring climate risks and best-practice exchange.
• Monitoring & Reporting
  Progress is tracked through climate-adaptation indicators.

The following are few examples of adaptation measures that have been taken (Pillars I and II):

• France: livestock and grazing adaptation
  Support for adjusting grazing calendars and introducing rotational grazing, subsidies for planting climate-resilient fodder species and for infrastructure like shade shelters and water points for livestock.
• Germany: crop diversification and risk reduction
  Support for crop diversification as a resilience tool, cultivation of drought-tolerant varieties, conservation tillage and efficient drip or recirculating irrigation systems.
• Italy: combating soil erosion and extreme rainfall
  Incentives for cover cropping and contour farming to protect soil, grants for retention basins and terraces in hillside farming and promotion of perennial crops in vulnerable regions.
• Spain: water management and drought resilience
  Investments in efficient irrigation systems and promotion of drought-resistant crop varieties as well as payments linked to soil moisture conservation and crop rotation.

Regarding risk management instruments, this tool is actively used, particularly with regard to promoting agricultural insurance and to raising awareness of risk management at farm level.

More than twenty Member States actively encourage and promote agricultural insurance. This occurs within Private Public Partnership (PPP) systems, which subsidize crop insurance premiums by 40% up to 70% (varies from country to country). These systems are financed nationally or co-financed on a national and EU basis.

In some cases, disaster funds or income stabilization tools (IST) may also provide compensation to farmers in addition to insurance payments (e.g. AgriCat Fund and IST in Italy and Spain for some special crops or sectors).

Finally, it is important to underline the link between any effective adaptation or prevention measures that reduce risk, making insurance more viable and sustainable, and the ability of insurers to offer discounts or better coverage to farmers who take such measures.

In conclusion, the CAP includes many measures to support climate adaptation and prevention and risk management. In view of the ongoing climate warming it must be assumed that the importance of these instruments will tend to increase.

The PIISA project works for innovative insurance solutions. In the agricultural pilot, PIISA is developing an index-based insurance, in other words parametric insurance, to meet farmers’ needs. They payment is based on a meteorological index, for example, rather than crop damage. At the moment, the work is going on with olive farmers in the Andalucia region in Spain. PIISA is also developing policy recommendations for both national and EU levels. For example, there is a need to harmonize the recognition of parametric insurance at EU level since it is not recognized in all Member States.

Authors

• Pascal Forrer, PIISA External Advisory Board Member