Recent legislation has created a universal compensation system for farmers.
Congress recently adopted the long-awaited crop insurance reform of the agricultural industry. Senator Denis Bouad, a former winemaker and former Vice President of Groupama Méditerranée, has been appointed as the leader of his group on the bill and is a member of the Joint Committee and is at the forefront of the matter. I was standing.
How do you recognize this reform?
This is the most beautiful reform in the last 20 years for the safety of the agricultural industry. You can pay tribute to the actions of the Minister of Agriculture who picked up the file and led it to the end.
What will the new law really change?
It creates a universal compensation system that must be put into operation on January 1, 2023. It gives farmers in “Ferme France” access to an insurance system that guarantees their income, whatever the production. One-stop shop simplifies the process.
The Diet voted for a three-tier system. The first level is the farmer’s responsibility and the farmer must undertake the most modest losses up to the deductible threshold. The second level is the responsibility of the insurance company, the third level is the responsibility of the state, and when the loss threshold is exceeded, public funds are mobilized to respond to the disaster situation.
What was the role of the Senate?
The government wants to do that in the ordinance, and the Senate is ambitious to freeze various levels of deductions, insurance, and the entire United Nations belt for wine producers, grain producers, tree growers, and breeders. I wanted to use the budget planning method. It is a matter of guaranteeing self-confidence, as these mandatory quantified factors speak to the farmers.
You can pay tribute to the actions of the Minister of Agriculture who picked up the file and led it to the end.
Did the late spring frost episode of 2021 clearly show the limits of the current regime?
That was the trigger. We no longer face the cold weather that freezes the hopes of harvesting for some farmers, but we have faced a nationwide disaster. I needed a matching answer.
Frost, drought, flood … Is the increase in hazards the result of climate change?
Twenty-five years ago, when I was a farmer, we started harvesting on October 1st. Today starts on August 15th. At the guard, it has been raining about the same amount of water for 100 years.
However, this amount now drops sharply over a period of concentration, followed by a long-term drought. Climate change is certainly a reality.
How can farmers be widely encouraged to take out insurance?
The ideal was to make this system mandatory, but there are still some restrictions. However, compensation paid under national solidarity will be reduced for uninsured businesses.
The aid coordination system set up will also encourage young farmers to take out multi-risk climate insurance as soon as they start their business. The goal is to have about half of the crops insured by 2030.
“Everyone’s Safety Net”
“The new project is positive because it’s aimed at at least everyone. It’s a safety net like a driver with third-party insurance. If you want, it could be more certain. “Beaucaire farmer David Seve said. He is the president of FDSEA du Gard (Federation of Farmers’ Unions).
“Given the increasing number of disasters caused by climate change, we had to tackle the problem head-on. These phenomena are expected to increase. Today, farmers cannot afford to spend their black years. I lost 15 to 20 farms .. “
But hell is paved in good faith, union officials continue. “We still don’t know how the future system will be clear between the insurer and the state. What will the payment deadline be? Amount?
Joël Limousin, Vice President of FNSEA, is responsible for insurance / disaster files and will be held in Rodian on March 16th. “I hope he can tell us a little more about future devices,” emphasizes David Seve, who invited Senator (PS) Denis Bouad.
“We expect more flexibility.”
The president of Bulldick Cellar wants a future insurance scheme inspired by complementary health insurance.
Cooperative cellar Bulldick And its 110 wine producers are an exception in Guard’s agricultural world in terms of climate risk management. Sellers have been insured for operating losses since 2009. In terms of insurance, this is called a “lack of contribution”.
Eighty-five percent of the surface of the grapes, which are essentially homogeneous areas of the 12 municipalities surrounding Uzege, are also insured. “At the annual meeting, I recommend insuring wine producers as much as possible. Cellar President Gerard Bansillon argues. Our wish is that all wine producers have 1 hectolitre. It’s about getting a decent income. Droughts, floods, hail … The work remains the same and 80-90% of our costs can’t be reduced, so we need to protect ourselves from the dangers that continue. It could ruin the frosty episode farms of the country as we know it. “
The disaster also brought huge deficits to insurance companies. “Their reinsurers no longer want to cover this type of contract. There is no longer what we find quite interesting.”
After that, the rate rose mechanically. The same is true for deductibles (losses not covered by insurance companies), increasing from 10% to 25%. “We did a price simulation. If we keep the same conditions as last year, the contribution will increase by 350%!”
“A la carte option”
At the same time, contributions to the Agricultural Disaster Fund are increasing. The government intervened to help uninsured farmers. “The insured receives nothing from this extraordinary funding,” he said as he passed through Gerard Bansillon.
Despite this double penalty, he still advises farmers to take out insurance. Recent legislation passed by Congress finally provides a framework for crop insurance. The reform also “made it possible to keep insurers in a loop that threatened to leave, while we would need to pay close attention to the enforcement order so that we wouldn’t.” say. More expensive contracts are not fully covered. You must be able to return to the option deduction and be insured a la carte. In a complementary mode of health. We expect future systems to be incentives and more flexible.
Specifically for the president of the Bulldick Cellar, “If a farmer needs sales of € 6,000 per hectare, for example, to maintain business sustainability and live from work, he insures himself. Must be able to spend up to 6,000 euros.
“We have to make the contract more attractive”
The crop loss compensation system is currently based on a solidarity fund managed by the Ministry of Agriculture and a state-sponsored private insurance system. This system is widely considered obsolete. “70% of wine producers are not insured,” said Denis Verdier, chairman of the IGP du Gard Federation.
According to the IGP boss, the cost of the contract is considered too high and the method of calculating compensation is inadequate, especially explaining this complaint. Due to the surge in climate hazards and the lack of better risk pooling, “the higher the deductible price, the fewer farmers will be insured.”
Dennis Verdier describes this virtuous circle as a “downward spiral” that needs to be reversed. If the damage is too great, the country’s solidarity will be insufficient. This was the case of an exceptional frost episode last spring, when the Minister of Agriculture released 1 billion euros under the Agricultural Disaster Fund.
“But wherever we go, we’ll run short. To make contracts more attractive than facing a national disaster, public institutions fund the creation of a national pool of insurance companies. It would be cheaper. “
It is good that the government and parliament have taken up this issue, and the president of the IGP Guard said, “The situation had to be improved, but if you know the origin of the evil, I would apply the decree. Wait, then cure. Burned cats are afraid of cold water. “