Insurance for crops is becoming pricier. Frequent storms, frosts, and long-term droughts driven by climate change have pushed up the costs Agroseguro must pay in claims. As a result, premiums for farmers have risen, with many describing the trend as a form of luxury. This viewpoint was echoed by Ramón Espinosa, the technical secretary for Asaja Alicante.
Over the last few years, the price of coverage has climbed by roughly 50 percent. The organization projects a further average increase of about 15 percent for the next financial year, with some grains most exposed to weather disruptions seeing hikes that could surpass 30 percent.
The current agricultural insurance framework in Spain is rooted in the first major democratic-era legislation. It has long served as a model for other nations. In practice, a public-private system involves administrations at the national and autonomous levels, such as Enesa, bearing a substantial portion of the costs. In the Valencian Community, that share can exceed 60 percent.
Cherries battered by hail illustrate the stakes involved. Juani Ruz
“The problem lies in the system’s failure to adapt to a new reality fueled by climate-change-driven accidents,” says Espinosa. He calls for a larger contribution from the central government to keep Agroseguro sustainable without transferring the rising costs onto farmers.
So far this year, in the Alicante province, the total contracted premium reached 18.8 million euros. Farmers are paying a little over 35 percent of that amount. That figure is about 5 percent higher than last year, even as insured areas contracted by nearly 3.6 percent, covering up to 27,152 hectares.
Asaja Alicante also notes another consequence: supermarket-led price pressures are driving down lemon prices. The technical manager points out that, as premiums rise, some producers choose not to insure their crops. This decision, driven by cost concerns, leaves smallholders especially vulnerable after natural disasters. Espinosa laments that many small producers who lack insurance choose to quit farming after a disaster comes through.
Because provincial data is limited, the organization cites national figures to illustrate compensation trends. By last September, Agroseguro had paid nearly 1 billion euros this year, compared with 650 million euros in the same period last year. If current trends persist, year-end payments could approach 1.2 billion euros, a level not seen in years past when annual payouts hovered around 500 million.
Another consequence of rising costs is that the insurance pool is adjusting coverage in ways that affect farmers. For instance, the growing premium burden is accompanied by higher deductibles, the portion farmers must cover in the event of a claim, similar to practice in motor insurance. Coverage types are also being trimmed; for example, wind damage coverage on lemons, a key local product, is being reduced, which can cause cosmetic blemishes and complicate marketing efforts.
Espinosa also highlights the cherry sector, already facing five consecutive bad harvest years due to a warming climate and related weather patterns. The trees require a period of cold exposure, and shifts in temperature threaten their viability. Cereals, among the most affected crops, faced drought that stunted growth in numerous production zones last year and hindered planting plans for the current year.
In summary, the combination of climate change and evolving insurance policies is reshaping farm economics. Producers confront higher premiums, reduced coverage, and more deductibles, all while the market wrestles with price volatility that often undermines profitability. The debate continues about how to balance the need for sustainable insurance against the financial realities faced by farmers, with calls for greater government participation to sustain the system without pushing costs onto growers. [Attribution: Asaja Alicante]