MRC: the new compensation system

On Monday, October 24, the Groupama Federation of Local Banks of the Jura presented the main lines of Multi-risk Climate Crop Insurance (MRC) to the Chamber of Agriculture and trade union representatives. In case of extraordinary losses, the agricultural disaster scheme is replaced by a national solidarity fund (FSN).

This new multi-risk climate insurance will enter into force on January 1, 2023. Presented during the Council of Ministers on July 29 by Bruno Lemaire, Minister of Economy and Finance, and Marc Fesneau, Minister of Agriculture and Food Sovereignty, the decree “on the development of climate risk management tools in agriculture” specifies the reform of the crop insurance scheme according to the law of 2. March 2022. This introduced new methods of compensation for crop losses due to climatic hazards through risk sharing between the state, farmers and insurance companies. A budget of 680 million euros has been introduced in the Finance Act to supplement this insurance and DSF.

“The sky has fallen on our heads”

“In 30 years we have never seen so many claims,” ​​contextualizes Jean-Pierre Gros, president of the Groupama Federation of Local Banks of Jura. “For the region, their number has doubled. There was drought, frost, but above all hail. The sky has fallen on our heads several times. This loss rate had become unsustainable: since 2016, crop insurance had been in deficit because it lacked policyholders”. In its magnitude, the historic April 2021 freeze caused an “insurance electroshock”.

The MRC wants to be the cornerstone of agricultural policy because it participates in national sovereignty. It is becoming the most important tool for securing farms in the event of a hazard and dealing with global warming. The main challenge will be to insure as many people as possible, the aim being to give every farmer the opportunity to sign contracts on reasonable terms.

Twice as many insured farmers

Nationally, only 17.2% of UAA is currently insured (30.9% for field crops; 34.1% for vines; 4.2% for orchards and just under 1% for meadows). The ambition of the reform is to double the share of farmers covered by 2030, to reach 60% in arable farming and viticulture and 30% in tree cultivation and grassland. Groupama wants to take advantage of the reform to relaunch its prairie insurance (Read interview with François Schmitt).

With the old crop insurance, the contracts were backed by 65% ​​with a 30% deductible. They will now be supported at 70% and policyholders will have the choice of three levels of excess: 20, 25 and 30%. The reference yield remains the Olympic average calculated from the past 5 years.

Ongoing contingencies, with a loss level lower than the selected deductible, will be borne by the farmers. Significant perils, up to 50% loss, will be covered by the insurance. In case of extreme dangers, losses of more than 50% will be covered by the solidarity fund. They will be 90% covered by FSN and 10% by the insurance company if the operator is insured. If not, DSF will only cover 45% of losses in excess of 50%.

Select an approved contact

Insurance companies will be responsible for paying all claims, including those arising from the FSN: All farmers, regardless of whether they have MRC insurance or not, must therefore choose a single authorized contact person by March 31 and report it on a platform of ‘State.

Hail risk is included in the MRC, but for those who do not subscribe to it, it will always be possible to take out this insurance separately.

Groupama now wants to communicate with farmers and especially with the relatively uninsured Jura wine sector: 32% of the national vineyard is insured against only 20% of the Jura vineyard. According to national figures, 2017 and 2021 are the worst years since 1945 for vineyards.

“Now is the time to think about your insurance,” concludes Jean-Pierre Gros. “We must not wait for the dangers”.


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