Drought, frost, hail… last straight line for the reform of crop insurance

AT On the eve of the Agricultural Show, Parliament is preparing to adopt Thursday by a final vote of the Senate a reform of crop insurance long awaited by the agricultural world, on the front line facing the consequences of climate change.

The bill, which according to Julien Denormandie “lays the foundations” of the “new house of climate risk coverage”, was adopted one last time on Tuesday by the National Assembly, in the compromise version obtained in the joint joint committee .

Faced with “a system out of breath” and a multiplication coupled with an intensification of climatic hazards, the Minister of Agriculture boasts “one of the most important reforms for our agriculture since the CAP”.

Sketched out in September by President Emmanuel Macron during a gathering of young farmers, it must be operational on January 1, 2023.

Concretely, the text creates “a universal system of compensation” on three levels: a first level concerns the farmer, who will have to assume the most modest losses, up to a threshold of deductible; a second level is the responsibility of the insurer, and a third is the responsibility of the State, which, above a loss threshold, will mobilize public funds to respond to disaster situations.

A one-stop shop has been created to simplify procedures.

The text provides for the creation of a pool of insurers. Adhering to it would be mandatory for insurers in the sector, thus allowing data sharing and pooling of risks, to establish the fairest possible insurance premium.

Compensation for crop losses has hitherto been based on the parallel operation of two schemes.

The first, that of agricultural calamities, has existed since the 1960s. Co-financed by farmers and the State, it excludes certain sections of agriculture (viticulture and field crops) and its deadlines are considered too long.

The second is the insurance system, private, but 65% subsidized by the State, in deficit and still little subscribed by farmers (about 18% all crops combined, according to the ministry).

The late frost episode in spring 2021 clearly showed the limits of the system: the State had to announce exceptional funding of one billion euros and make wine-growing areas eligible for compensation.

“Trust feeling”

The senators fought to transform the text “into an ambitious orientation law”, by introducing quantified elements. The law will thus enshrine the commitment of 600 million euros per year in public expenditure to support the deployment of the reform, over the period 2023-2030 and in the appendix, the objectives to be achieved for insured agricultural areas, by type of culture, by 2030, as well as indicative objectives for the levels of State intervention by production.

For the president of the Economic Affairs Committee Sophie Primas (LR), “the senators have done useful work to create the climate of confidence necessary for this new architecture of crop insurance”.

The ministry aims for around half of crops to be insured by 2030.

Farmers are strongly encouraged to take out insurance: compensation paid under national solidarity will be reduced for uninsured farmers. A mechanism for “modulating” the installation aid will encourage young farmers to take out multi-risk climate insurance as soon as they start their business.

The bill “will be able to better protect our farmers” who “cannot bear the cost of climate change alone”, welcomed the leader of LREM deputies Christophe Castaner.

“The success of the reform now depends on a clearly displayed political will to resolutely strengthen the resilience of our agriculture in the face of climate change,” said Senate rapporteur Laurent Duplomb (LR).

For the FNSEA, “the work must continue”, without “losing time”. “As soon as the law is promulgated, consultation with the representatives of the sectors and all the stakeholders will have to be committed within the commission responsible for the orientation and development of insurance”, declared the first agricultural organization in a statement.

02/24/2022 04:20:09 – Paris (AFP) – © 2022 AFP

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