In the aftermath of the joint committee between senators and deputies ratifying a more “muscular” version of the reform of crop insurance, Groupama says it is optimistic that the latter will allow greater subscription by farmers to insure their crops. But the maintenance, or even the increase in insurance premiums will have to be compensated by other convincing arguments with producers who are currently doing without them. Otherwise, the objective of covering 60% of arable crop areas by 2030 will not be achieved.
With the increased frequency of climatic hazards in recent years, multi-risk climate insurance premiums should not fall, according to Groupama. (© Terre-net Media)
“Uhistorical reform, designed for farmers, placing insurers in a logic of public/private partnership, and based on the principles of solidarity and universality “: Here is qualified, by the representatives of Groupama, during a press conference Thursday, February 17, the project of reform of climate multi-risk insurance. A project that the senators had, Wednesday, February 8, somewhat “muscular” compared to the version validated by the deputies.
The day after the holding of the joint committee between deputies and senators, which confirmed the amended version, the representatives of Groupama showed their optimism as to the effects of this reform to save the system.
Because it is good to save crop insurance device : since its creation in 2005, the percentage of areas covered in arable crops did not exceed 30%. An insufficient figure, according to insurers, to be economically sustainable. The proliferation of climatic hazards over the past five years makes “the system untenable for insurers”, according to them. The vagaries of 2016 put the loss/premium ratio in the red and has not gone back into the green since.
According to Groupama, the current harvest insurance scheme is not tenable. (©Groupama)
With a loss charge of more than €200 million for the sole insurer Groupama, the exceptional episode of frost last April after an equally unusual mild spell a month earlier was the “triggering factor” for the reform. Throughout France, “more than 80% of our members in viticulture declared a claim, representing 105,000 ha of damaged agricultural areas. And nearly 20,000 ha of beet crops have used the “re-sowing” guarantee, explains François Schmitt, farmer and president of Groupama Grand Est.
The year 2021 was, with the exceptional episode of frost in April, the triggering factor for the reform of the multi-risk climate system. (©Groupama)
“Lower premiums not on the agenda”
However, the reform will not be synonymous with lower insurance premiums, quite the contrary. In a context of a “loss-making” system, the multiplication of contingencies, and therefore potentially of compensation, will lead to an increase in premiums. Pacifica and Groupama had already announced it last November for 2022. “Given the evolution of climate change, the reduction in premiums is probably not on the agenda”, confirms Pascal Viné, director of relations institutional Groupama. With all the farmers who do not take out crop insurance, in particular because of its cost, the insurers will then have to find other arguments.
“Until now there was a strong culture of state intervention”, especially for the most exceptional hazards. The State will only intervene at the third and final level of the system,” recalls François Schmitt. “And if the intervention of the State decreases with the uninsured, this will mechanically increase the number of subscribers. »
And just like the Government, the leading agricultural insurer is counting on the necessary education to be carried out with young people. “There is a real educational effort to be made! Choosing to insure against the consequences of a hazard on your crops must be like deciding to treat your plots against a disease once or twice. »
These arguments must be strong enough to convince young farmers to take out long-term insurance, and thus achieve the coverage objectives of the system now appended to the text of the reform: by 2030, it is a question, according to the report by deputy Frédéric Descrozaille, to cover 60% of surface areas in field crops and vineyards (compared to 30% in 2020), 30% of fruit crops (compared to just over 4% in 2020) and 30% of meadows.
The objective of the crop insurance reform is to at least double the coverage rate for arable crops and vines. (©Groupama)
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