Managing the Risk in Agriculture Production: The Role of Government

Abstract

Abstract The aim of the article was to define the essence and the role of state in managing the risk in agricultural production. Nowadays risk management is one of the core priorities of reformed CAP. Wherefore it was necessary to highlight the variety of tools and essay the reason why the farmers do not implement them. The main method applied in the work was a descriptive method and a dogmatic analysis of normative acts. Reference books and international analyses and reports were also used. The weather conditions, as well as climate change have fair impact on agricultural production, its quality and quantity, as well as farmers’ income. They are infrequent but lead to severe damage to a whole region, like the droughts occurrence this year. Such events fall under the catastrophic risk layer, for which market solutions plays a less important role, mostly due to public involvement. Due to the current legislation, Member States have the authorization for granting subsidies for farmers who had loss. They set up provisions for damage recovery and compensation. It seems to be one of the main reasons why the farmers do not try to avoid the risk themselves applying some on-farm strategies.