A new universal compensation scheme for crop losses resulting from climatic hazards is created as of January 1, 2023. This scheme is based on national solidarity and the sharing of risk between the State, farmers and insurers.

One unique three-stage device risk coverage is planned:

  • for so-called low-intensity risks, payment by the farmer;
  • for medium-intensity risks, pooling of risks between territories and sectors through a harvest insurance contract (MRC) whose premiums are subject to State aid;
  • for so-called catastrophic risks, a direct guarantee against risks for all crops by the national agricultural risk management fund (FNGRA). The compensation conditions will be less favorable for farmers who have not taken out a crop insurance contract.

The thresholds for the various hazards will be determined by regulation in 2022.

parliamentarians changed the bill. They set programmatic objectives for the government by making the text an orientation and programming law. A new article includes the objectives set for the State in the new universal system for managing climate risks in agriculture. It reiterates the government’s financial commitment to pay up to 600 million euros per year to operate the system. To better meet the visibility needs of economic players, a report setting the objectives to be achieved in terms of agricultural land insured by means of an MRC insurance contract, by production, by 2030 has been appended to the bill.

The second stage of the system was also improved by the parliamentarians. Insurers offering crop insurance contracts will have to follow specifications, defined by a future order, in which a price scale will be defined per production, as well as the preventive measures practiced by farmers which may be taken into account to reduce their insurance premium. A lowering of the deductible threshold on these contracts at 20% and an increase in state aid to 70% of the amount of the insurance premium paid by farmers (i.e. the most advantageous rates allowed by European law) are made possible by law. In the report annexed to the law (which has only an indicative value), the parliamentarians specified their wish for state intervention from 30% of losses for the least insured sectors such as grasslands. Multi-annual public intervention rates will be defined by the Government after consulting the consultation body.

The parliamentarians also recalled the possibility for the farmer to choose the most favorable solution between the Olympic average (average of the yields achieved over the last five years, excluding the best year and the worst year) and the rolling three-year average. In recent years, with the vagaries of the weather, this average has fallen, greatly reducing farmers’ compensation.

To encourage young farmers to take out insurance, the senators have provided for the possibility of modulating their installation assistance based on taking out insurance or carrying out a risk diagnosis.

MEPs have allowed agricultural cooperatives to set up an accounting provision that they can release in the event of the occurrence of an agricultural or climatic hazard.