“Significantly cheaper harvest insurance for all sectors”


We would have liked to have an indication of the impact of the project to reform risk management tools on the amount of contributions for multi-risk climate insurance (MRC). We will be at our expense. ” Our first simulations show a significant drop in the price of insurance premiums for all sectors “says the Ministry of Agriculture, without venturing to state a lower percentage, taking refuge behind the” complexity of the impact study. But the ministry is sure of its cost and blow. Julien Denormandie has stated on several occasions that the overhaul of the climate risk management system was ” the biggest structural reform since the CAP “. Even if it will be up to the next term to press the button on 1er January 2023, the reform should not disappoint, at least the greatest number. In any case, we cannot blame the minister in office for having passed on the hot potato to his successor, a potato always a little hotter, by the way.

Limited risk, more subsidized insurance

If the ministry is sure of its cost and its impact, it is because it relies on two tangible elements, starting with the subsidization of the MRC. On January 6, when presenting the project to the Economic Affairs Commission of the National Assembly, Julien Denormandie decided to use ” at most » the European Omnibus regulation, which sets the RCM subsidy rate at a maximum of 70% and its minimum triggering threshold at 20% losses. Currently, the MRC is subsidized at 65%.

“The fact of capping the risk taken by the insurer reduces its exposure to risk and allows, mechanically, to reduce the cost of the insurance premium”

But the challenge lies more in the weight of the remainder to be borne by farmers. This is the core of the reform project’s reactor and its three-stage architecture, with a 2th floor, corresponding to the MRC, squeezed between self-insurance (below the deductible rate) and the threshold of exceptional losses, beyond which the State will draw each year on its budget, as stated by Emmanuel Macron before the JA on September 10, 2021, under national solidarity.

Rates in a vise, sort of. ” The fact of capping the risk taken by the insurer reduces its exposure to risk and allows, mechanically, to reduce the cost of the insurance premium “says the ministry.

Incidentally, the FNGRA has a third section, namely the Exceptional Intervention Fund, alongside the funds dedicated to crop insurance subsidies and loss of funds.

Two governance bodies

The bill provides for the creation of a “pool” of insurers, the operational tool for the distribution of crop insurance, to which are assigned obligations of transparency, pooling, non-exclusion, all at the best cost. It will be up to the pool, of which the State will be a member, to outline the contours of the MRC, and in particular to define what is insurable and what is not, ” in a logic of support and transformation of French agriculture “.

The bill establishes another governance body, the Crop Insurance Orientation and Development Committee (Codar), bringing together insurers, reinsurers, the agricultural profession, the State and the Regions. The Codar, which will coexist with the CNGRA, is intended to issue opinions for the pool concerning the different settings for crop insurance.

Device unknowns

Among these parameters are the famous thresholds surrounding the MRC, namely the rates of deductibles and exceptional losses, crop by crop, which do not appear in the text of the law. ” Fixing these thresholds in the law would have deprived the system of any steering tool in the years to come. “, justified Julien Denormandie.

“The reform will live very well with an Olympic average that remains over five years”

The Olympic average will remain the standard, due to regulatory constraints, with the EU adopting the prerogatives of the WTO. ” Being able to move the Olympic average would be an additional advantage the reform will live very well with an Olympic average which remains over five years “, assures the ministry.

As soon as the law is promulgated, potentially next February 10, the ministry has planned to organize a conference of sectors, a kind of “pre-Codar” to reflect collectively on the final settings. One thing is certain: the bill sets in stone the discount of 50% of state aid paid for exceptional losses for farmers who have not subscribed to an MRC. ” A strict application of the European regulation, simply recalled in the law “, specifies the ministry.

A time mentioned, we do not know if the additional tax on insurance contracts will be raised from 5.5% to 11%, just to consolidate the financing of the device.

The contours of the future one-stop shop, intended to speed up compensation procedures as much as to clarify them, also remain to be defined, due to the duality between the insured and the uninsured. Insurers, DDTM, other players? ” The doors remain open “.

Finally, with regard to grasslands, the ministry has not decided on the choice of the tool evaluating their (non) growth, even if the Grassland Production Index (IPP), known as the “Airbus” index because it is satellite-based, holds the rope. The case of the uninsured, in a situation of exceptional losses, could force the State to go through a public procurement procedure.

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