Loss threshold (crop insurance)

The loss threshold is the minimum loss percentage, measured against reference production, below which a crop policy is neither eligible for subsidy nor paid. EU law sets it. From 2014 to 2017, Regulation (EU) 1305/2013 required a loss of more than 30% for the premium to be subsidized. The Omnibus Regulation 2017/2393, in force on January 1, 2018, lowered it to 20% and raised the maximum aid rate from 65% to 70%. Article 76 of Regulation (EU) 2021/2115 keeps both figures for the 2023-2027 CAP. In a subsidized policy, threshold and deductible overlap: the loss must exceed 20%, and that 20% stays with the farmer. Since 2023, the French structure has three tiers. Below 20%, the farm retains the loss. Between 20% and the national solidarity threshold, the 70%-subsidized insurance pays. Above 50% for field crops, vineyards and vegetables, or 30% for orchards, grassland and other production, the state pays national solidarity compensation. It covers 90% of the loss above the threshold for an insured farmer, and a declining rate for an uninsured one: 45% in 2023, 40% in 2024, 35% scheduled for 2025. For an underwriter, the public threshold works as the exhaustion point of the private layer. The market's risk stops where the state attaches, which slices pricing into tranches and trims exposure to extreme years. Before 2023, the agricultural calamities threshold (30% of a crop and 13% of gross output) played a similar role, but only for uninsurable production.