F. Descrozaille: “In terms of crop insurance, the ball is in the court of farmers and insurance companies”

Will farmers comply en masse with the new risk management system?

F. Descrozaille: with what has just been decided, namely the parameters on the one hand, especially the Omnibus, and on the state’s budgetary obligations on the other, the professional leaders have the elements to carry out the reform in the area and say: we must go . But I don’t have a crystal ball. The ball is in the farmers’ court.

On what basis can we confirm, or invalidate, that the graft took?

F. Descrozaille: the justice of the peace, that will be the subscription rate, but I will refrain from giving a figure. In 2023 we will need positive feedback from trade associations and territories that recognize an increase in subscription levels to confirm that the membership process has begun. We won’t know until next year.

Will the system be effective on the condition of registering a massive subscription rate, a guarantee of pooling?

F. Descrozaille: absolutely, but it is less a prerequisite than a goal. The system becomes all the more efficient as the sectors adapt to climate change by basin, and that we gain a very detailed knowledge of the loss data, including for orphan productions, which until now were devoid of insurance offers. And these claims data, it is the pool of insurance companies, created by law, which will provide them. As a Member of Parliament, I would have liked to have created the pool much sooner anyway, because the period of 18 months is too long in my opinion.

Do you expect insurance companies to lower insurance rates?

F. Descrozaille: Until now we had a system where insurance companies covered all risks up to 100% loss. That the state takes 50% means 15% less risk, all other things being equal. If the crop insurance costs the same while I have a deterioration of my reference due to the Olympic average, the farmers will not go there. I therefore expect a reduction in the contributions. However, I do not rule out a bad surprise. But it is not complicated: either the premiums decrease or the conditions for compensation increase, it is one or the other. But as to the terms of compensation, we are caught in the issue of Olympic averages. The ball therefore also lies with the insurance companies.

Is the new system truly universal and does not exclude any farmer in advance?

F. Descrozaille:: it may not be quite in 2023, but it should be fast because the law allows for the use of Codar

for orphan productions. If the insurance companies consider that they cannot insure such and such production of data, e.g. the introduction of a tropical variety to which the insurance company does not have a reference, the law provides that the state plays the role of reinsurance by covering for two or three years the technical balance if it is deteriorated, the time when the insurance companies improve their knowledge about the market, as the idea is not to block innovation.

The Olympic average is perceived as a foil: what possible means?

F. Descrozaille: Established by the WTO under the Marrakesh Agreements of 1994, the Olympic average is supposed to protect against competitive distortions. With the Marrakesh agreements, all forms of support for agriculture were supposed to decrease until they disappeared. But no one does, so we made a mistake. I am convinced that these agreements should be terminated in order to restart multilateral negotiations on a different basis, with the issue of access to water and food in a radically different way than what was discussed then. Either we switch the insurance system into the orange box, like the Spanish are doing, and then we get out of the green box, and there is no longer an Olympic average. But it is something that can have consequences and makes the administrations take a risk because there can be fines. Either we move on a European level, that is, we translate the spirit of what was done in Marrakech in another way, or we gradually come out of it, but it will take years.

Committee responsible for orientation and development of crop insurance, an offshoot of CNGRA responsible for issuing recommendations on production loss thresholds, subsidy rates and compensation rates.

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