Agricultural insurance is a thorny issue. It is an essential tool for ensuring the profitability of many agricultural activities,but the notable increase in accidents in recent years calls into question the sustainability of the current model.In this context, the Ministry of agriculture approved the 46th Combined Agricultural Insurance Plan, increasing the budget to 315 million euros by 2025, 10.7% more than in 2024, when 284.5 million were allocated of euros. This is an amount that is used to subsidize policies.
The UPA spoke of progress and welcomed this increase in available funds and also underlines that in 2025 ther will be a difference in aid depending on the nature of the insured. “As we have asked, there will be more aid for young people, priority farms and professional farmers,” underlined the organisation, which believes that aid should be increased “even more”.
They also ensure that what was signed by the UPA and the Union of Trade Unions with the Minister of Agriculture in the agreement on 43 measures to support the countryside will be taken into account, as the new Plan includes measures 28 and 30 of that pact. Specifically, those that refer to increased support for agricultural insurance, especially among priority groups. It also includes actions to review and improve insurance lines, and also the implementation of various studies with the aim of incorporating new improvements into future insurance plans.
Furthermore, as Agriculture explains, another measure of great importance for professionals in the sector is included: they will obtain from the Ministry a minimum subsidy equal to 45% of the cost of the eligible premium when they contract Module 3, which will rise to 50% when take Form 2, – the most complete and most requested by insured people -.If we take into account that Module 1 already provides for a 65% subsidy, those insured in these three contractual methods will be able to obtain the maximum level of subsidy allowed by community legislation -70%- if the autonomous communities integrate this aid. At this point the UPA asks the communities to take advantage of the autonomous section. “Many of them are still far from the maximum allowed by law and must demonstrate their commitment to campaigns and adaptation to climate change by increasing aid,” they concluded.
ASAJA, for its part, called for a comprehensive reform of the current agricultural insurance system. According to the organization’s technicians, contractual policies have become significantly more expensive, while coverage has decreased and compensation has been cut. All this has caused widespread discontent among farmers and ranchers.The industry criticizes the current system that takes advantage of the accident rate to make adjustments that involve rate increases by cutting guarantees. For this reason, ASAJA calls for a drastic reform of all insurance branches to guarantee the income of farmers and breeders in the event of adverse weather conditions or animal diseases, phenomena against which little or nothing can be done.
The agricultural organization deplored the impossibility for producers to insure the entirety of their production or to be covered against any risk, not even by contracting complementary insurance or additional guarantees.Instead, they are penalized by placing limits to guarantee their production as much as possible and are forced to assume higher loss percentages, even more so when they have filed numerous grievance reports, they say. As an inevitable result, in the event of a disaster, the compensation they receive does not cover actual losses or lost profits due to lost production on farms, prompting farmers and ranchers to reconsider whether to continue or abandon stipulation policies.
Extraordinary accidents.
The Ministry wanted to highlight the growing importance that agricultural insurance is acquiring as a risk management tool, especially in a context of increasing accident rates, as observed in recent years.Thanks to agricultural insurance,producers who have taken out the corresponding policy and have suffered an accident receive the relevant compensation in a short period of time,on average less than 30 days,which undoubtedly contributes to the vitality of their farms.
However, on point 27 of the 43 provisions, which talks about “developing tools so that extraordinary accidents, mainly caused by climate change, can be covered by funds complementary to those established for the agricultural insurance system”, the Ministry said nothing. This possibility was strongly raised after the DANA that occurred a few weeks ago in Valencia and in anticipation that this type of episode could become increasingly frequent and devastating.
How can farmers better understand and engage with agricultural insurance policies?
Interview Between Time.news Editor and Agricultural Insurance Expert
Editor: Good morning, and thank you for joining us today. agricultural insurance is a critical yet complex issue in the farming community. Recently, the Ministry of Agriculture approved the 46th Combined Agricultural Insurance Plan, increasing the budget significantly.Can you give us a brief overview of what this new plan entails?
Expert: Good morning! Yes,absolutely. The new plan represents a significant commitment from the government, with an increase in the budget to €315 million by 2025, which is a 10.7% increase compared to last year. This funding is primarily aimed at subsidizing agricultural insurance policies, which are vital for ensuring the profitability and sustainability of various agricultural activities.
Editor: that’s engaging. The increase seems to respond to a growing demand,particularly with the claim that accidents in agriculture are on the rise. What are some of the key factors behind this increase in agricultural accidents?
expert: Right, the uptick in accidents can be attributed to several factors, including climate change, which leads to unpredictable weather patterns, and the intensive farming practices that many farmers are adopting. Additionally,new pests and diseases threaten crop yields,placing additional stress on farmers.as these challenges grow, the need for reliable insurance becomes increasingly meaningful to safeguard their livelihoods.
Editor: The UPA (Union of Farmers’ Associations) has expressed their support for this increase in funds but also calls for even more aid. Can you elaborate on what specific needs they have highlighted?
Expert: Certainly.The UPA has pointed out that the new plan shows progress, especially in its focus on different categories of farmers. There will be enhanced aid for young farmers, priority farms, and professional farmers. They argue that these groups face unique challenges, and tailored support will help to foster sustainability and growth in the sector. Their message is clear: while the budget increase is welcome, there’s still more to be done to truly support these crucial demographic segments in the agricultural community.
Editor: You mentioned that the new plan incorporates measures from a previous agreement involving the UPA and the Union of Trade Unions. How exactly will these measures enhance support?
Expert: Yes, the new plan specifically includes measures 28 and 30 from that 43-measure pact, which focus on increased backing for agricultural insurance. This entails not only higher financial support but also improved access to these policies for those in priority groups. For instance, simplifying the administrative process and providing educational resources to help farmers understand and engage with these subsidies can enhance their effectiveness.
Editor: Given that agricultural insurance is a “thorny issue,” as you noted at the beginning, what challenges remain ahead in achieving a sustainable model for agricultural insurance?
Expert: The challenges are multifaceted. First, there’s the ever-present risk of adverse selection—where only those who expect to suffer a loss take out insurance, driving up costs for everyone. Additionally, there’s a need for better risk assessment tools that can incorporate modern technology and data analytics to provide fairer premiums. engaging farmers in understanding and valuing agricultural insurance is crucial; many still view it as an unneeded expense rather than a vital safety net.
Editor: Excellent points. As we wrap up, what message would you like to convey to policymakers regarding the future of agricultural insurance?
Expert: I would emphasize the importance of a collaborative approach. Policymakers, farmers, and insurers need to work together to create a more resilient agricultural insurance framework. Investing in education, technology, and tailored solutions can help ensure that agricultural insurance serves as a reliable safety net for all farmers, securing the future of our food systems.
Editor: Thank you for your insights! It’s clear that while the increased funding is a step in the right direction, the journey toward a sustainable agricultural insurance model is ongoing. We appreciate your time today.
Expert: Thank you for having me! It’s been a pleasure discussing these vital issues.