Insurance

a classic scheme with no incentive to transition

The reform of agricultural insurance finalized during the Varenne is presented as a three-tier system mobilizing the farmer, the insurer and the State to deal with the vagaries of climate change. Without, however, any incentive to transition.

Frost, hail, heat wave… If, because of their profession, farmers integrate climatic hazards into their daily lives, their increase resulting from global warming raises the question of compensation. According to a study by France Assureurs, published at the end of 2021, the cost of claims related to natural events could thus reach 143 billion euros between 2020 and 2050, an increase of 93%. ” This study covers movable and immovable property, relating to agriculture; for living things like plants, the estimate is more difficult to perform, but we know it’s gonna get worse “says a source from the insurance sector.

In response to this growing challenge, the reform of the agricultural insurance system, which has been in preparation for several years, took advantage of the dynamics of the Varenne agricole de l’eau to structure itself. The old device was considered outdated and out of breath by all the players. ” The two dietsRCM insurance [multirisques climatiques] and agricultural calamities, are not designed to support the changes in French agriculture in the face of climate changedetailed the impact study of the law. The absence of reform exposes France to a risk of degradation of its food sovereignty by not guaranteeing the resilience of agriculture in the face of shocks that it does not have to face alone. »

The idea is to create a safety belt for farmers in relation to climate change

The Minister of Agriculture

The long-awaited law for that was finally published in Official newspaperthe 3 of March. It outlines the framework of a three-tier compensation system: thus, during a common hazard, it is the farmer who alone bears the cost of the loss. The second level targets significant events, which will then be covered by private insurance. Finally, the last floor concerns exceptional hazards, compensated by the State via a national solidarity fund (FSN). Although the reform was expected, its final version did not meet with the same reception according to the stakeholders. And the support of agriculture towards more climate resilience does not seem to have been integrated into the system.

A triggering of national solidarity according to cultures

This reform comes at the right time in relation to the disasters that we have had: frost, drought, excess water, heat wave”, says Joël Limousin, vice-president of the National Federation of Farmers’ Unions (FNSEA), responsible for managing climate and health risks. For the union, several advances have been made. First, state support for the most violent events, but differentiated according to culture.

“For example, for arable crops and viticulture, it has been estimated that insurance could cover 20 to 50% of losses and, beyond that, the State could take over, illustrates Joël Limousin. For meadows and arboriculture, the part to be borne by the farmer could be between 20 and 30% loss – and this remains at low costs in terms of insurance. Beyond that would be the state. To support this national intervention, each year, State and European funds will be mobilized to the tune of 600 million euros. A critical amount. ” VShis year, the state has put a billion on the freeze… We realize well trust that the 600 million will only spend years without an accident “regrets Denis Perreau, national secretary of the Confédération paysanne.

Recourse to insurance that is not mandatory, but encouraged

If the use of climate multi-risk insurance (MRC) is not made compulsory, it is nevertheless strongly encouraged. The government is thus planning an increase in the rate of public subsidies at 70% to help farmers pay for their insurance contract. Another appeal of the foot: the uninsured will be entitled to national compensation for exceptional hazards less important than those who have an MRC. The device is also simplified, with a one-stop-shop system for all. ” Compensation via a one-stop shop should provide speed of execution and processing of filesemphasizes Joël Limousin. The big advantage of insurance is its speed for compensation, unlike the agricultural calamity fund for which it was necessary to recognize the department, go through the national risk management commission, set up files for each farmer, etc. delays of nine to twelve months after the disaster were not tenable in terms of cash flow. »

The Confédération paysanne deplores, for its part, this recourse to a private intermediary. ” With this reform, we have entrusted the keys to the truck to private insurance, believes Denis Perreau. The Confédération paysanne had brought forward the idea of ​​creating a mutual and solidarity fund that takes into account the risks of all farmers, even those without insurance coverage, even those who do not have the means to insure themselves. Our proposal was brushed aside. » The union fears that insurers will abandon territories or productions considered too risky. ” Small farms such as diversified market gardening, beekeeping, do not have an insurance offer, insurers have undertaken to offer them one, but it remains unclear “, believes Denis Perreau.

The constitution of a group of insurers

On this point, the government wishes to condition the proposal of insurance offers – which will benefit from state aid – to the creation of a group of insurance companies. The idea? Counterbalance the poor knowledge of sector risks, such as arboriculture, by sharing claims data and pooling risk between companies with a panel of territories and sectors more or less exposed. Specifications should also be drawn up to, in particular, regulate the procedures for the assessment and compensation of claims by insurers. ” There will be transparency on the offer, on the terms that will apply, the criteria for calculating the loss, etc.. “, emphasizes Joël Limousin.

On this subject, the government now wants to move forward quickly. Discussions are underway and an order should specify the device within six months. The law should, for its part, come into force from 1East January 2023 (or 1East August 2023, for certain provisions). ” The idea is to create a safety belt for farmers in relation to climate changehad indicated during a press briefing the Ministry of Agriculture. A shock absorber therefore, but not a tool to help change course.

Within the framework of the Varenne agricole de l’eau, the overhaul of the insurance system had nevertheless been put on the agenda of a working group, which aimed to ” acquire tools for anticipating and protecting agriculture as part of the overall climate hazard management policy “. Regarding prevention, the law does provide that an advantage could be granted to the most far-sighted farmers. ” For example, if farmers install hail nets, the first may decrease by x%”says a source from the insurance industry. But the law and its variations should not go further in terms of helping farmers transition.

A missed opportunity to finance the transition

However, the needs are great. ” If we want an agricultural landscape capable of better retaining water, we must recomplex these landscapes and rediversify the types of products that are grown there.Sébastien Treyer, director general of the Institute for Sustainable Development and International Relations (Iddri), had thus explained at the start of the Varenne agricole de l’eau to Actu-Environnement. However, we cannot ask farmers to carry out this rediversification alone: ​​we must build, on the scale of a territory, a region or a production area, a sector that allows both collection, processing and placing on the market with real outlets. »

To support this transition financially, Sébastien Treyer proposed several avenues (for example through water agencies, but also insurers. “The issue of diversification of production can constitute a risk reduction strategy, he had estimated. The way in which insurance premiums weigh on this or that sector, how the insurer assesses the risk and the level of the insurance premium, all of this is linked to the agricultural model. However, large monoculture areas are very vulnerable to climatic hazards, while complex agricultural landscapes, with hedgerows and a set of crops, which do not have the same times of maturity, are more resilient. »

This track will therefore not have been retained within the framework of the law for the overhaul of the agricultural insurance system. ” This awareness, this cultural management is business management. Insurers cannot do everything; our business is the transfer of risk, it is preventionestimates a source close to the insurance sector. The job of the farmer is to manage and transform his crops. It’s really up to the farmers to do that work. »









Article published on March 30, 2022

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