Baseline crop insurance contract (France, 2016)

The contrat socle is the three-tier multi-peril climate crop insurance design that France introduced for the 2016 season. Tier one, the baseline: subsidized at up to 65%, it triggers at a 30% loss, with a 30% deductible for crop-group policies or 20% for whole-farm policies. Its insured amount is capped by an official price scale, designed to cover roughly the cost of production. Tier two: add-on covers, aided at 45%, that raise the insured amount up to the actual selling price, cover quality loss, or lower the deductible to 25% on crop-group policies. Tier three, with no aid: yield buy-back and whatever extensions the market was willing to offer. The idea was to widen uptake with a simple, cheap product, with the farmer buying additional cover at his own cost. The 65% and 45% rates were guaranteed for 2016 and 2017, then set by order each year, subject to budget; the 2019 and 2022 CAP notices still carried them. Take-up stayed thin. About 13% of French farms were insured in 2020, with vineyards and field crops making up most of the acreage and orchards very little. For an underwriter, the baseline tier locked in a two-speed book: an aided tier with little appeal, and options that carried the margin and the adverse selection. The reform of January 1, 2023 eliminated this split in favor of a single contract subsidized at 70% with a 20% deductible.