The government on Friday clarified the compensation rules from 2023 to 2025 for future crop insurance, which must be put in place on January 1, 2023, according to a press release from the Ministries of Economy and Agriculture.
The new system, defined by a law promulgated in March, is based on national solidarity and the sharing of risk between the State, farmers and insurance companies, the two ministers said in a press release.
In replacement of the current arrangements, the new system will comprise three stages: a first level reporting to the farmer, who alone will assume the losses of the current contingencies up to a deductible threshold; a second level, for significant contingencies, will come under the private insurer.
Finally, exceptional contingencies will trigger State intervention, including for uninsured farmers.
The government has agreed with the opinion of the majority union FNSEA: it provides for a threshold for triggering coverage of 20% of production losses (compared to the 25% which were under discussion) for policyholders, and public subsidization at 70% insurance contributions (against 65% currently).
The disaster compensation rate, provided for within the framework of national solidarity, will be 90% for insured persons of all cultures, and, for the uninsured, 45% in 2023, 40% in 2024 and 35% in 2025.
A threshold for triggering national solidarity is also set at 50% for the field crops, industrial crops and vegetables and viticulture groups, and 30% for other productions, in particular arboriculture and meadows, according to the press release.
This vast reform will put an end to the current system, deemed insufficient, which brings together two complementary systems: the agricultural calamity scheme and the insurance scheme.
The public disaster plan, in force since the 1960s and co-financed by the State and the profession, can be triggered after a severe climatic episode. But it excludes certain parts of agriculture (viticulture and field crops). As for the insurance system, private but subsidized at 65%, it is still little subscribed by farmers, who consider it too expensive.
Nobanques: the cheapest offers to control your budget
These are only 30% insured in field crops and 5% in arboriculture, and the idea is to encourage farmers to subscribe.
The Minister of Economy Bruno Le Maire hailed a historic reform of the protection of farmers against climate risks, saying he wanted to make insurance cover really attractive.
It is a strong commitment for our farmers who are on the front line facing the consequences of climate change, added his colleague from Agriculture Marc Fesneau, also quoted in the press release.
The state will more than double its total contribution to the system, 600 million euros, promised President Emmanuel Macron during a meeting with farmers in early September. A review clause is provided in the event that the device would cost the State more than 680 million.