Crop insurance reform stirs controversy among farmers

The government wants better insurance coverage for farmers in the face of climatic hazards. This is what is at stake in the bill presented on 1is December 2021, in the Council of Ministers and put under discussion in the National Assembly, Wednesday January 12, for an entry into application expected on 1is January 2023.

Among farmers, there is no consensus on the subject. Christiane Lambert, president of the FNSEA agricultural union, hopes to see this long-awaited reform succeed. “We pushed for its adoption. This represents ten years of work by the FNSEA ”, she asserts. Conversely, the Confédération paysanne, associated with thirteen environmental organizations, opposes the bill, judged “Unfair and excluding”. This group believes that by relying on private insurance “The government excludes all the peasants who, for lack of cash, do not have the means to take out crop insurance”.

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What’s more, “By deciding to subsidize insurance premiums paid by farmers, the public authorities are putting themselves at the mercy of the pricing policies of insurance companies. The same people who did not fail to let it be known, a few weeks after the presentation of this bill, that they intended to increase their rates from 10% to 25% from 2022 ”. The Rural Coordination, another agricultural union, is also opposed to the reform, calling for “Prices for farmers, not subsidies for insurers”.

The government’s objective is to fundamentally reform the existing model, where only 18% of farms are covered. The coverage rate is also very variable depending on the sector: within arable crops and viticulture, more than a third of farmers are insured when the meadows are only 3%.

Many gray areas

The frost of spring 2021, which strongly affected vines and fruit trees, served as a detonator by giving a boost to the reform. The state then pledged to pay 1 billion euros to support companies that were victims of this brutal climatic episode.

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 the insurance. Finally, in the event of a climate disaster, the State will directly help farmers.

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If the main lines of the reform, considered by Julien Denormandie, Minister of Agriculture, “As the most structuring of the mandate of Emmanuel Macron” for the agricultural sector, are included in the bill, there are still many gray areas. The different cursors will be fixed by decree or ordinances, knowing that European law sets ceilings. It will also be necessary to establish, by ordinance, the organization of a Reinsurance “pool” to pool risks between different insurers. Without delay, the government pledged to double state subsidies to the tune of 600 million euros per year.

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