Crop insurance dictated by climate change

In order to reform risk management, the government started from an observation: just under 31% of agricultural land is insured in the country. Inversely proportional to the multiplication of events Forecast that influence cultures. The new system is expected.

One late frost the killer drought infinite: in the face of risks climatic which are becoming common, the reform ofcrop insurancewhich comes into force on 1eh January, aims to protect better farmers.

While just under 31% of farmland French people are insured, the goal is to “create a real shock in the distribution of insurance”, confirms the government, which proposes a system that is open to “all farmers, insured or not”. This new system, defined by a law announced in March, “is based on national solidarity and risk sharing between the state, farmers and insurance companies”, according to the Ministry of Economy and Agriculture.

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As a replacement for the current units, this “universal compensation scheme” has three levels: a first level is the responsibility of the farmer, who alone will bear the losses up to a deduction threshold of 20%; another level falls under the private insurance company (up to 50%); and a third level mobilizes public funds to respond to disaster situations.

This reform was expected by both operators and insurance companies hoping for“stop losing money”, according to a Groupama executive.

Among farmers, the frost of 2021, which destroyed vineyards and fruit trees, served as a “trigger”, says Joël Limouzin, who is responsible for the matter at the majority agricultural union FNSEA. “We are no longer facing a hard blow every five or six years: it is now every year. After 2021, operators realized that they could no longer cope with climate change alone”, he continues.

Breeders’ concern

The previous system, since the 1960s, had been based on the system of agricultural disasters, co-financed by the state and industry. “It excluded the fields of arable crops and viticulture” who from 2005 were encouraged to take out insurance against partial payment of the premiums, explains Joël Limouzin, according to whom these productions were not necessarily well covered by the insurance. “The new system is for everyone, which is important to us”he adds.

For insurers, it was necessary to return to a minimum balance without inflating premiums too much to remain attractive. “The reform responds well to these major problems”, believes Delphine Ltendart, director of insurance for Groupama, the main insurance company for farmers at Pacifica (Crédit Agricole).

In order to encourage farmers to take out insurance, the public compensation for the uninsured in case of major losses will be reduced.

The insurance company is placed at the center of this new arrangement and will be the single point of contact for operators for any claims, regardless of whether the surfaces are insured or not.

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But this system of “one stop shop” will not be ready 1eh January for the vast majority of farmers, the Ministry of Agriculture announced on 19 December.

In fact, the state has not yet reached an agreement, financially and technically, with the insurance companies that will manage the compensation for the uninsured in the event of extraordinary losses on its behalf.

The latter will therefore have to turn to government services at departmental level on a transitional basis, “until 31 December 2023 at the latest”.

By 2030, we hope to reach 60% of the insured in field crops and viticulture (compared to 30% today) and 30% in meadows and tree farming. (less than 4%), Joël Limouzin states and emphasizes that “the more people sign up, the lower the premiums”.

The concern is already there among breeders, who dispute the method of assessment (via satellite) of damage to the meadow, synonymous with feed loss.

In field crops or in the vineyards, most of the farmers contacted are concerned about prices and say that they do not yet have enough information to make a choice.

In the Gard, Jean-Luc Lapeyre, who lost 50% of his vines in 2022 and is not insured, estimates that “insurance should be made compulsory to really lower premiums.” Because now it isn’t “not convinced”.

The insurance companies themselves awaited the final arbitrations on the reform before launching major information campaigns.

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