On 1 January 2023, the crop insurance reform will come into force with the aim of better protecting farmers against climate risks. State intervention, trigger threshold, group of insurance companies: what does the new system consist of and why is it more of an incentive for farmers? Pascal Viné, director of institutional relations at Groupama, outlines the main lines of the reform.
Long awaited, the one the crop insurance reform comes into force on 1 January. The system is based on the work carried out within the framework of Varenne de l’eau, around the report of the deputy Frédéric Descrozaille, whose main lines (the size of national solidarity, then the thresholds and the aid rate) have been announced by the President of the Republic himself in 2021 – and the 2022 editions of Terres de Jim.
Instead of relying on both insurance and the agricultural disaster scheme, the new system will benefit from national solidarity in addition to insurance. The law sets a threshold and a minimum subsidized deductible for insurance of 20% and a support rate of 70% for all crops, a threshold to trigger national solidarity set at 50% for “arable crops, industries and vegetables” and “viticulture” and 30% for other productions, especially timber and meadows.
“The insurance system was at risk”
For Pascal Viné, director of institutional relations at Groupama, this reform constitutes “a historic reform”, “very positive because it will make it possible to maintain the system”. “Until today, the insurance system was in danger, it became very expensive and covered less and less well. Tomorrow, with government intervention and a 70% subsidy on the insurance premium, we will get much broader and much more effective coverage for the farmer. In the longer term, it is intended that all farmers must be insured and enter the system,” he explains.
Watch on video the entire interview with Pascal Viné about the main lines of the new insurance system, conducted at Sima on November 7:
A new more incentive system
To better protect farmers from the increasingly significant impacts of global warming on agriculture, the law aims to bring as many farmers as possible into the system. The latter will therefore be encouraged to insure themselves, “because if they are insured, they will have national solidarity at the full rate, if they are not insured, national solidarity will be at a reduced rate”, recalls Pascal Viné.
In fact, the compensation rate from the state for the insured of all cultures is 90%, while the compensation rate is different for the uninsured: from 45% in 2023, it then drops to 40% in 2024 and 35% in 2025.
A group of insurance companies to pool risks
The sustainability of the new system will also require the creation of a group of insurance companies. “The idea is to pool the risks as widely as possible, so that the premiums paid by farmers are as fair as possible, estimated as accurately as possible”, emphasizes Pascal Viné.
At the moment, the creation of the group is the responsibility of the insurance companies, but if it does not succeed in the coming year, the state would create it by decree. In any case, Groupama’s director of institutional relations wants to be reassuring: “I believe that the group is created because it is the very logic of the system. If we want to tackle climate change, if we want premiums that remain fair to the farmer, we need the widest possible pooling. And if we want the system to be universal, we also need broad pooling, and only a group of insurance companies allows this broad mobilization, as Spain has done for 40 years, it works in Spain, there is no reason for it do it. ‘t work in France,” he concludes.
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