Climate risks make adaptation crucial for EU agriculture, says World Bank

Rising climate risks and growing challenges for smaller farms are putting pressure on EU agricultural systems, highlighting gaps in support and preparedness, according to a World Bank study.

The study examined the use, effectiveness, and areas for improvement of Risk Management Tools (RMTs) and provides a detailed analysis of current policy developments, making recommendations for the European Union and its member states.

It also offers guidance on potential actions that could be developed further, as outlined in the Vision for Agriculture and Food, helping to chart the way forward in ongoing policy discussions.

The World Bank report highlights the importance of mandatory RMTs linked with a strong Unity Safety Net and demonstrates how proactive risk management complements reactive crisis support.

It stresses the need for a more consistent and comprehensive approach to risk management across member states and underscores the issue of accessibility to RMTs, particularly for smaller farms.

The study also recognises direct payments as a crucial safety net for farmers, ensuring that support mechanisms remain effective during adverse events.

It provides complementary analysis on the ongoing work of the European Commission in collaboration with the European Investment Bank’s (EIB) fi-compass initiative, noting areas for further attention in future Common Agricultural Policy discussions.

The World Bank’s findings reinforce the EIB’s conclusions in data harmonisation, technical assistance, and layered risk management, calling for increased consistency across strategies and delivery approaches.

The report highlights the growing frequency, severity, and duration of loss events, making it essential to contain or reduce climate risks to maintain the insurability and viability of farms.

It emphasises that large-scale adaptation interventions are necessary, while crisis management and preparedness should enhance, rather than discourage, farmers from adopting risk management strategies and resilient farming practices.

The study reflects strengthened collaboration between the European Commission and the World Bank.