In the face of climate change, a new crop insurance

“The increase in the frequency and intensity of adverse climatic events caused by climate change has jeopardized the ability to ensure the resilience of French agriculture.» : “These last five years (…) the cost of claims (…)(A) more than double ”, Notes the Agricultural Insurance Reform Bill, introduced on Wednesday 1er December in the Council of Ministers.

→ EXPLANATION. Freeze: farmers still too uninsured

In this context, the “The system of compensation for crop losses resulting from climatic hazards is unanimously considered out of breath.” Agricultural disaster relief schemes, created by the state in 1964, and multi-risk climate insurance in the private sector will merge to make way for a single system of compensation for farmers, largely funded by public funds.

“Farmers can’t deal with climate risk alone”

“The meaning of the reform is to say: farmers can’t cope with climate risk alone,” he said. explains to The Cross Julien Denormandie, Minister of Agriculture. A three-stage rocket is emerging, with each stage taking its share of the risk. A first step, the franchise: the farmer alone will bear the least significant losses, from 20 to 30% of potential production. The second tranche goes to insurers: up to 50 to 70% of production losses. Beyond that, it is the state that will come to the rescue in the face of agricultural calamities.

→ SURVEY. Sécheresse, grêle, gel … French agriculture of climate change

“With this project, the government is creating universal coverage for all sectors,” precisely Julien Denormandie. The minister is counting on a vote in Parliament before the end of his term, for an entry into force in 2023. The envelope allocated to the device will be 600 million euros, double the pre-existing device.

Only 18% of farmers are insured

The existing bicephalous architecture was unsatisfactory. The Fund for Agricultural Disasters, funded by the state and the European Union, which supports farmers in exceptional climatic events, has been criticized for slow implementation. Above all, it did not include certain sectors: viticulture, for example, benefited from the exceptional frost at the beginning of the year only thanks to ad hoc state intervention.

Private insurance, 65% subsidized subsidies, inaccessible residences for many farmers… and few interests for insurers, structural deficits in this branch of activity. The Ministry of Agriculture estimates that only 18% of farmers are insured.

In any case, the government estimates that insurers could not manage the risk alone. „One of the first debates was whether to increase the number of policyholders to reduce the price through pooling, continues the Minister. That is an answer. But it is not enough: the use of national solidarity is essential. »

However, the private insurance part is renewed: insurers will have to share data on contracts and claims in order to standardize premiums. It must be obliged to propose an insurance product à tout agriculture which must meet the demand.

Push for bonuses

By regulating insurers, the device is made accessible to as many people as possible: it will be important to aim to create groups of insurers because it is necessary to prevent insurer X from taking only the “right risks”, while Insurer Y only finds itself with “bad risks”. explains Julien Denormandie.

→ MAINTENANCE. Julien Denormandie: “National solidarity must fund recognition”

The government intends to push farmers to take out insurance policies and aims to have half of the crops insured by 2030. Exploatatorii will be encouraged to move forward because, due to risk-sharing, the uninsured we will be less compensated in the event of an agricultural disaster. On the other hand, contrary to the concerns of some operators, the ministry announces that European aid from the CAP will not be conditional on taking out an insurance contract.

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