1. Ron H.M. Bergevoet , Marcel A.P.M. van Asseldonk
Cost and responsibility sharing arrangements in the EU to prevent and control notifiable veterinary risks
Ron H.M. Bergevoet , Marcel A.P.M. van Asseldonk

2. Background
Continuous interest for prevention and avoid disaster relief
A number of countries show interest in cost sharing arrangements/ risk management instruments
On-going review by the EU what could be improved

3. Objective of this presentation
To review the distinct features of a Cost and Responsibility Sharing Scheme (CRSS)
enabled by a Public Private Partnership (PPP)
to prevent and control veterinary risks in case of epidemic livestock diseases.
Main focus on compensation schemes

4. Costs and losses during outbreaks of epidemic livestock diseases
Direct costs:
Compensation to farmers for animals culled and products destroyed;
Infrastructure costs to control the epidemic;
Costs associated with culling and destroying infected and contact animals; and the destruction of feed and eggs on detected farms;
Vaccination costs.
Consequential losses:
Income losses of farmers directly or indirectly affected;
Restricted national and international market access for animals of susceptible species and the products from these animals and return to pre-epidemic market conditions.

6. Costs and losses during outbreaks of epidemic livestock diseases
Direct costs  Exotic Disease Compensation Schemes
Public: most EU MS’s
Public private (e.g., NL, Be, D)
Consequential losses  New developments for creating private or mutual insurance under Common Agricultural Policy (CAP) for example
FMSE in France
AgroSegura in Spain

7. Actors involved
Farmers
Government
National EU

8. The role of a PPP is to: Raise more awareness, Reduce risk exposure,
Provide incentives for rapid disclosure, and
Increases support of control strategies if outbreaks occur.

9. Possible compensation schemes in Exotic Disease Compensation Schemes

10. 50%1 up to a ceiling2 once that ceiling is breached; farmers pay 0%.
Example 1: General characteristics of the compensation arrangements in the Netherlands
Funding
Direct losses
Consequential
losses
Compensation
Control costs EU
50%1
No direct involvement
National Government
0% up to a ceiling2; once that ceiling is breached; Government pays 50%1. 0%
Farmers’ contributions
50%1 up to a ceiling2 once that ceiling is breached; farmers pay 0%.
Individual farmers are responsible for their own costs.
The EU Veterinary Fund reimburses 50% of compensation and some other direct costs mentioned in Regulation (EU) No 652/2014. In practice the contribution is smaller than 50% as not all direct control costs are eligible for reimbursement. 2A maximum contribution ceiling for each industry sector is set out in an Agreement between Government and industry every 5 years.

11. Farmers’ contributions
Example 2: General characteristics of the compensation arrangements in Belgium
Funding
Direct losses
Consequential
losses
Compensation
Control costs EU
50%1
No direct involvement
National Government 0%
50%
No involvement
Farmers’ contributions
No national collective arrangement
Regional arrangements
The EU Veterinary Fund reimburses 50% of compensation and some other direct control costs mentioned in Decision 90/424/EEC. (In practice the contribution is smaller than 50% as not all direct control costs are eligible for reimbursement).

12. Example 3: General characteristics of the compensation arrangements in Germany
Funding
Direct losses
Consequential losses
Compensation
Control costs EU
50%
up to 50% EU1
No direct involvement
National Government
25%
25%-50%2
No involvement
Private / farmers’ contribution
0%-25%2
Individual farmers responsible for covering own costs; there is a high level of insurance available
The EU Veterinary Fund reimburses 50% of compensation and some other direct control costs mentioned in Decision 90/424/EEC. (In practice the contribution is smaller than 50% as not all direct control costs are eligible for reimbursement).
Funding control cost by farmers varies from federal state to federal state (mostly born by Government but in Lower Saxony 50%).

13. Cost and Responsibility Sharing Scheme (CRSS)
A CRSS looks for the balance of responsibilities and funding between animal keepers and taxpayers, and how well each system encourages positive disease risk management by animal keepers
Is prevention-driven and incentive oriented,
It balances the distribution of costs and responsibilities between authorities, EU institutions and farming sector,
Is effective and efficient on prevention and eradication of animal diseases,
It has simple and clear rules,
It prevents distortion of competition,
It avoid risks for the EU and MS budgets,
And ensures economic sustainability of farming business.
However most schemes in the EU do not comply with these requirements

14. Evaluation of current PPP compensation schemes
Criteria
Criteria met?
Prevention-driven and incentive oriented approach
Balance the distribution of costs and responsibilities
Effectiveness and efficiency on prevention and eradication
Simple and clear rules
Prevent distortion of competition between MS’s
To avoid risks for the EU and the MS budgets
Ensure economic sustainability of farming business in the EU 
Ensure consistency with the animal health, animal welfare and food safety policy objectives as well as broader EU policies (climate change, sustainability) and international commitments of the EU (WTO)

15. Conclusions MS’s reveal diverse and complementary views;
some are more in favour of the more advanced options of the compensation system, whereas other MS’s are more conservative
Determining an appropriate base for cost, risk and responsibility sharing is a highly complex matter and it is unlikely there is to be a “one size fits all” solution to cost sharing but there is a need for a systematic approach
New possibilities created by the CAP enable an integrate approach in which direct and consequential losses can be covered

16. Questions?