Drought, frost, hail, flood: new crop insurance

In Yonne, 50% of farmers are insured against climatic hazards (drought, hail, frost, etc.), according to the Chamber of Agriculture. But it is still well above the national average of 30%. “We are in an area in France where we are exposed to multiple hazards. Intermediate areas are often affected,” recalls Fabien Viero, head of non-life and life insurance at Crédit Agricole Champagne-Bourgogne, the second agricultural insurer in France. These areas are agricultural areas with low production potential.

Extraordinary drought and mildness are shaking up farmers’ practices

This reform must also make it possible to deal with recurrences of climatic accidents. “For 4-5 years there has been an acceleration of the dangers, comments Fabien Viero. We usually don’t know when the dangers happen. It happens every year”.

Fair risk sharing between the state, farmers and insurance companies

But with a small number of policyholders, “the premiums collected are not enough to pay the claims”, the manager continues. The reform is thus based on a “reasonable sharing of risk between the state, farmers and insurance companies”, clarifies the Ministry of Agriculture. “It’s a three-stage rocket”, sums up Arnaud Delestre.

Climate disasters: how will the new crop insurance work from 2023?

Thus, in the case of moderate dangers, it is the farmers who “take them up with their cash”, notes Fabien Viero. For the most significant hazards, beyond 20%, private insurance companies are called upon to insure farmers through multi-risk weather insurance (whose premiums are subject to a public subsidy and direct compensation from the state against so-called catastrophic risks).

The goal is to be able to protect everyone.

Finally, the state intervenes for disasters resulting in more than 50% crop loss (including for the uninsured, but with lower compensation) within the framework of the National Solidarity Fund (FSN). Where previously the system of agricultural disasters was taken into account, but which excluded certain sectors such as meadows or tree cultivation.

Finally, with this reform, the insurance companies will also have the task of being the only point of contact for farmers, to estimate damages and ensure the settlement of claims (also for the uninsured, within the framework of FSN, already next year). A system that requires restructuring with insurance companies. “We trained all our teams, we informed and then called our farmer customers to give them a price-calculated proposal”, explains Fabien Viero. The work is still ongoing, carried out by about thirty people in Yonne, until the end of the subscription periods, which will take place, depending on the type of crop, in January for winter crops, in February for winegrowers, in March for the prairies…

New grape varieties, rootstocks from the south, late pruning… Experiments are being carried out to adapt the Yonne vineyard to climate change

So many incentives that should be added to the climate context that has already motivated certain professionals. “For five years, the winegrowers have taken out more and more insurance”, notes Arnaud Delestre. “The aim is to be able to protect everyone”, concludes Fabien Viero. “Each farmer must define his strategy”. At the level of France, the stated goal of this reform is to reach 60% of insured farmers by 2030. This will allow farmers to secure their income, but also to imagine a reduction in the amount of the premium linked to the largest number of insured farms.

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