Government presents its reform of crop insurance

The government wants to make crop insurance more accessible to farmers. This is the stake of the bill presented on Wednesday 1^er December in the Council of Ministers. It should be submitted for consideration by Parliament in mid-January 2022 for entry into force in 2023.

The objective announced by the ministries of economy and agriculture, which worked jointly on the file, is to reform in depth the existing model, because the current rate of coverage of farms is less than 18%. It is also very variable according to the sectors: at the head of the queue, arable crops and viticulture, where more than a third of the farms are insured; at the back of the pack, the meadows – less than 3% of them are insured.

The spring frost, which strongly affected the vines and fruit trees, helped to accelerate the reform. The State then pledged to pay one billion euros to support companies that are victims of this violent climate hazard.

Inspired by the Spanish model

For its crop insurance project, the government says it was inspired by the Spanish model. It is based on a three-storey architecture, depending on the degree of severity of the damage. The first, which concerns the limited losses corresponding to the classic variations in harvest, is the responsibility of the farmer. The second, which concerns more serious damage, will be covered by private insurance. But the state will subsidize the cost of insurance. Finally, in the event of a climate disaster, the State will directly help farmers.

While the broad outlines of crop insurance reform have been described, there are still many gray areas. The different cursors will be fixed by decree and have not been disclosed. The government affirms that the arbitrations are not finished and stresses that European law sets ceilings. It will also be necessary to establish, by ordinance, the organization of a reinsurance “pool” to pool risks between the various insurers. Without waiting for clarifications, the ministries estimate that state subsidies will double from 300 million to 600 million euros.