Agricultural insurance, together with CAP aid, is seen as a key element of agricultural policy to secure the income and profitability of farms from the effects of climate change. The insurance data are the best thermometer and in this case they certify an increase in accidents, with more frequent, more violent and unpredictable meteorological phenomena and in periods of the campaign in which they were not usual before.
In the face of what happened in the past, and contrary to the positions of climate change deniers, the data processed by the insurance companies reaffirm that something is changing when the more generalized frosts occur in the spring months and up to the beginning of summer; when indiscriminate droughts are more frequent, adding to the lack of water for the irrigation of key crops in the center and south of the peninsula; when hailstones become more frequent and damage cereals or woody crops, especially fruit trees or vineyards; and when torrential rains and floods are a nightmare for certain areas, especially in the Levant. Overall, an accumulation of claims that has dragged agricultural insurance in the last year to register claims that have misaligned the accounts of the insurance companies with the consequent negative impact on the premiums paid by farmers and breeders with more increases and fewer bonuses on some lines.
In this context, to support the sustainability of the insurance business as a whole, that of subjects who defend the profitability of their business and that of farmers who must have attractive insurance premiums for their farms behind them, Agriculture has foreseen in new For 2023, it foresees a 10-point increase in the concessions for the payment of policy premiums, bringing its contribution to the unprecedented figure of 317.7 million euros. Objective: that there is insurance with the policyholders and that farmers and breeders do not abandon the insurance business, maintaining the premium underwriting levels of recent years.
According to the provisional data managed by the insurance pool, the accident rate as at 30 October already envisaged compensation for 714 million euros against premiums of 707 million. Of those 714 million, 588 correspond to accidents in agricultural production – above all due to drought – and 54 to livestock, to which are added another 72 million euros for the removal of carcasses from farms.
The data processed by the insurance companies represent an average increase in the accident rate of 7% compared to that recorded on the same dates in 2021, the year in which compensation amounted to 222 million euros. If the claims continue along this line, everything indicates that the results will far exceed the record number of compensations, which dates back to 2012 with its 732 million euros due to the generalized drought of that period.
TWO MILLION HECTARES. To date, the area affected by the accident reaches almost two million hectares. In this context, the volume of compensation corresponding to fruit trees for frosts and torrential rains stands out, especially citrus fruits in the Levant, followed by dry cereals, almond trees or wine grapes, with a total of 110,000 complaints, to which are added another 80,000 in the livestock sector, essentially due to lack of grazing, followed by claims for illnesses and accidents.
Overall, the agriculture sector maintains bargaining levels of over 400,000 policies, but throughout the rest of the year it is aiming for extreme numbers. Together with the maximum claims, record figures are also expected on the insured capital, which increases every year and which in October has already risen to 14,000 million euros against 15,590 last year. In this period of the year, important insurance contracts such as cereals, olive groves or vineyards are still open, lines in which the higher price of the insured products must be taken into account, for which it is expected to reach figures higher than the previous maximum capital, higher than 16,000 millions
These figures, although very important, are far from the value of final agricultural production in recent years, which is around 56,000 million euros. However, they already represent almost half of the value of this production, reaching around 34,000 million, being much lower for the livestock activity, with sectors in which its implementation is very poor.
From the consideration of insurance as a key activity in agricultural policy, there has been a significant increase in the funds allocated by agriculture in recent years to support the payment of premiums. Compared to the practically frozen 211 million arranged by the Ministry in the previous decade, the budget for 2023 represents an increase of 60 million euros compared to the initial one for 2021 and 50% more than in 2020, to settle on the record figure of 317 7 million euros, to which must be added the amounts disbursed by each autonomous community on the basis of their priorities in the agricultural sector and which, together, represent another 100 million euros on average.
The contribution from the Ministry of Agriculture for this year means an increase of 10 points in the basic subsidy received by the majority of policyholders. In this sense, for this 2023 Plan, the average subsidy is close to 40%, compared to 32% the previous year. This percentage increases according to the circumstances of each farmer or breeder in different percentages in the case of professional farmers, producer organisations, cooperatives or priority farms and the aid can reach up to 65% of the premium amount in the case of young people farmers.
In addition to the amount or percentage of premium subsidies, it is important that other conditions, such as returns with the possibility of insuring, correspond to actual productions, as well as that the deductibles, premiums or penalties of each branch or policy are appropriate to the interests of both sides so that insurance is indeed a weapon in agricultural policy.
