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Harvest insurance: a new system to protect farmers against climatic hazards

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Drought, episodes of frost or even hail… Farmers are increasingly affected by climate change, causing significant losses to their farms. The purpose of this new insurance scheme: to better protect them against these difficult-to-predict dangers, which are increasing in number.

A new legal framework to protect farmers

Orientation Act No. 2022-298 regarding a better distribution of crop insurance in agriculture and reform of the tools for managing climate risks in agriculture, establishes from January 2023 a new risk coverage system, divided into three levels:

  • current unforeseen expenses will be borne by the farmers. The latter can also rely on other existing systems (such as those in the French recovery plan) to invest in protective equipment to improve the resilience of their operations to climatic hazards,
  • significant hazards will be covered by subsidized insurance for farmers who have chosen to take out insurance,
  • finally, extraordinary hazards will trigger government intervention, even for uninsured farmers.

This risk management system is thus based on national solidarity and risk sharing between the state, farmers and insurance companies according to these different levels of loss. The goal of this new system: to create universal protection for operators to enable their resilience to climate change.

Excess and compensation limits specified by sector

The texts validated by the National Committee for Risk Management in Agriculture (CNGRA) are the result of long consultations carried out over several months, in particular the decree, which in particular sets out the quantified parameters for the next three years:

  • a threshold and a minimum subsidized deductible for insurance of 20% and a subsidy rate of 70% for all crops,
  • a compensation rate from the state for the insured for all crops of 90% and a compensation rate from the state for the uninsured of 45% in 2023, 40% in 2024 and 35% in 2025,
  • a threshold to trigger national solidarity set at 50% for the groups “arable crops, industrial crops and vegetables” and “viticulture” and at 30% for the other productions, especially wood farming and meadows.

This decree also contains the review clause in addition to 680 million.

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