Farming is at the mercy of weather, volatile prices, natural disasters, pests and diseases to such an extent that, every year, at least 20% of farmers lose more than 30% of their income compared with the average of the previous three years.

The Commission says that farmers, as entrepreneurs, are ultimately responsible for designing their own on-farm income protection strategies.

However, it will set up an EU risk management forum to help farmers exchange experiences and best practices.

It says the existing CAP toolbox of direct payments, market intervention, post-crisis compensation, the Income Stabilisation Tool (IST) and insurance support should be assessed to see if they can be improved.

Financial instruments to encourage private capital to overcome cashflow shortages are suggested.

Individual member states could change tax policy to encourage farmers to save in good years to cope with bad years, it says.