Agricultural insurance in Andalusia had never reached the compensation figures that we will reach in 2023: 135 million euros, in the absence of definitively finalizing the olive grove campaign or some other accidents that may occur in the last weeks of the year, as well as accidents or livestock diseases, which are a daily reality. We spoke with Juan Francisco Delgado RuizTerritorial Director of Agroseguro in Andalusia.
–What percentage of those 135 million have already been paid?
–A very important part, specifically 101 million euros. The largest amount, almost 64 million, has been paid to producers of arable crops, mainly winter cereal, sunflower or legumes due to damage caused by the lack of precipitation. In addition, Agroseguro has paid another 14 million euros to insured citrus growers or almost 10 million for all livestock lines. The rest, up to 135 million euros, correspond to the damage we estimate the olive grove will have and accidents from other productions.
–64 million euros in just one insurance line are quite unusual figures in Andalusia
–Totally unusual, but the drought that has been suffered in the countryside during the first half of 2023 cannot be compared with practically any of the previous ones, only with 2012. It has been practically six months without a single drop of water, without any day respite for producers. The rains came when the harvest no longer had any margin for recovery.
–What area of herbaceous crops has suffered an accident?
–In the national total there are more than 2 million hectares of arable crops, and more than 3 million hectares in all insurance lines as a whole, both for damage caused by drought and by hail storms, rain and wind that we have suffered during the summer and especially in the month of September, with the constant passage of several Isolated Depressions at Low Levels (DANA). In the case of Andalusia, almost 300,000 hectares have been damaged in herbaceous crops alone, which means that practically 100% of cereal growers who signed a policy in the last campaign have suffered an accident and have received their corresponding compensation.
“Almost 64 million have been paid to producers due to the damage caused by drought”
–Almost 300,000 hectares, I imagine it has been a challenge.
-No doubt. In fact, in Andalusia the damage assessment began in mid-May, two or three weeks earlier than usual, compared to other years, in order to advance all processes, including the payment of compensation. In addition, Agroseguro made it easier for those insured whose farms were not viable for grain production to be able to use green land for forage or for extensive livestock. This demanding planning is what has allowed us to evaluate such an extension of the field in a timely manner, and pay compensation within 23 days from the final appraisal. That is, the year of the greatest drought in our history and with almost 300,000 hectares evaluated, farmers have received their compensation – on average – 23 days after the expert’s visit. We know that the policyholders are very satisfied and recognize Agroseguro for the effort made.
–Has it been the worst drought suffered so far?
–In the years in which we have suffered the worst drought incidents, the range of damaged area at the national level has been between 1 and 1.2 million hectares, however, on this occasion we are talking about more than 2 million. Regarding compensation, until now, the 2017 drought was the one that reached the highest figure, with more than 180 million euros at the national level, and in 2023 we are close to 500 million euros.
–A very short olive season is expected. Is it also noticeable in the accident figures?
–To date, the damage assessment campaign has begun in the earliest productions, those of table olives. Next, we will continue with mixed attitude olives and early harvest plots destined for organic oils and “green oils”; Without delay in time we will enter the rest of the olive mill. We estimate that more than 70% of the insured olive grove area has a loss, due to the lack of precipitation, extreme heat and also the effect of hail storms. The damage estimate that we handle exceeds 30 million euros, although it is a preliminary figure, at the expense of what is verified plot by plot. These are very high figures and they show a good example of the usefulness of insurance.
–Olive grove insurance is not widespread and has room for improvement.
–It is true that the implementation of olive grove insurance is low, but we believe that the trend is changing, after a year of 2021 of strong and constant hail and two consecutive campaigns, 2022 and 2023, of drought. A few years ago the olive grower did not feel a great sense of risk, but something is changing climatically and the perspective is beginning to be different. Also because the producer who has insurance and has suffered an accident, openly recognizes the added value that having agricultural insurance means for his exploitation.
–What insurance figures are handled, in general, in our Autonomous Community?
–Quite positive. The capital insured by agricultural insurance in Andalusia exceeds 2,500 million euros, which is distributed among very diverse productions: vegetables (672 million), strawberries and red fruits (469 million), herbaceous crops (281 million), olive groves (247 million) , citrus fruits (229 million), live plants (143 million), as well as nuts, fruit trees, garlic or tropical crops. To all this we must add 303 million euros of insured capital in all livestock insurance. Therefore, agricultural insurance in the region offers coverage to a very important part of our economy and our agricultural holdings in the face of the very complicated climate reality they face.
“The cereal farmers who signed a policy with drought coverage and suffered an accident have received their compensation”
–Farmers are at a crucial moment to ensure the next campaign.
–And to do it in the best conditions, too. Producers of arable crops have until November 30 to ensure their 2024 harvest, but in the case of Andalusia and for those who renew their policy before October 31, they can benefit from a 5% bonus. Without a doubt, for many policyholders it is an incentive, because they are convinced of the usefulness of the insurance, and they prefer to subscribe before that date and have the bonus. The autumn modules, which are now in the contracting period, are those that offer the most complete coverage to the herbaceous producer, since they include the risks of drought, non-emergence, non-implantation, frost and hail, among others. For this reason, they are also the ones that are mostly hired nationally, and also in Andalusia.
–And for the olive grove, until what date can it be insured?
–Also until November 30. In this case, the autumn modules, in addition to including the most complete coverage: against drought or hail, also allow biannual insurance of two consecutive harvests in the same policy. Furthermore, the end of the year is also the time to protect many other productions present in our field: almond trees, garlic, wine grapes or livestock insurance. Therefore, it is a good time to make decisions that will help us face the year 2024 with more security, knowing that we have the protection of agricultural insurance.
–Is public support for agricultural insurance maintained?
–It is maintained and reinforced. The public administrations, both national and regional, have always shown their empathy for the situation of the sector and have actively supported the Spanish Combined Agricultural Insurance System through the granting of subsidies for insurance premiums. We must not forget that the State Agrarian Insurance Entity (ENESA), dependent on the Ministry of Agriculture, Fisheries and Food, has approved consecutive measures to increase the subsidy it grants to policyholders, especially after feeling the economic repercussions of the war in Ukraine or after verifying the resignation that this year’s drought took. In addition, the Junta de Andalucía has announced, and is working on, an agreement to automatically deduct the amount of the regional subsidy. It is an announcement of great significance that we hope will see the light of day very soon. And finally, I do not want to forget the support offered by the Insurance Compensation Consortium through public reinsurance to compensate for excess accidents. Therefore, the support of the Public Administrations continues and, furthermore, in recent years it has only been reinforced from all areas.
