What can I do if the heat burns my harvest?
Description
Farmers want high temperatures to be covered by policies, just as is the case with frost
Extremaduran farmers have experienced hot summers, but it is likely that very few like this one. Summer fruits and vegetables have been cooked – literally – in one of the hottest summers since records exist in the region. Some regions have suffered average maximum temperatures of more than 39 degrees, which means exceeding the average of the last 30 years by four points.
After the end of summer, the first reports to agricultural insurance give a good outline of the disaster. Around 10,000 hectares of tomatoes (half of the insured area in the area) have suffered damage due to the extreme heat in Extremadura, according to Agroseguro, the organization that brings together the country's 18 agricultural insurers. Calling insurance is, for many producers with ravaged fields, the last resort to avoid going into the red. In the case of Extremaduran tomato growers, Agroseguro has already announced an injection of nine million euros due to the decline in harvests.
In situations like this, agricultural insurance works as a kind of legal lifeline. Unlike a motorcycle or a car, the law does not require you to insure a field; However, the trend indicates that more and more owners are deciding not to take the risk and ensure the harvest year after year. The succession of torrid summers, with mercuries exceeding 40 degrees day after day, has opened a debate in the sector. Unlike losses due to frost, hail or hurricane winds, even fires, insurers are reluctant to respond for the damage that the summer sun causes to crops such as pear, peach, nectarine, fig, corn, almond or grape.
The heat in summer is, after all, something predictable. But what has happened in recent years, farmers denounce, crosses the limits. And not all policies include this risk. Farmers, faced with the new climate scenario, demand greater protection against high temperatures to protect their crops. “There are agricultural productions that without insurance could not survive, and we are grateful. But the system is not prepared to adequately cover the damage caused by high temperatures in all crops,” says Jesús González, agronomist and technician at Cooperativas Agro-Alimentarias de Extremadura. “We are talking,” he denounces, “of new incidents, unprecedented situations that can cause more important losses than a hailstorm, a flood or a frost.”
The very high accident rate recorded this year is fueled by a Molotov cocktail of three ingredients: hail, drought and heat. Sergio de Andrés, director of the Production and Communication department of Agroseguro, believes that it is possible that “2022 will close as the year with the highest accident rate and compensation in the history of agricultural insurance.”
Higher accident rate
A look at the data serves to confirm the thesis of higher accident rates. While between 2006 and 2010 insurance distributed 2,376 million euros in compensation , between 2017 and 2021 compensation for damage to crops rose to 3,309 million. Although more and more owners choose to insure their crops, the increase in contracts (9% between 2006 and 2021) does not keep pace with the increase in the amount of compensation (39% more in the same period).
These forecasts have put the legal sector on alert. Esther Álvarez, partner lawyer at Gabeiras & Asociados, predicts that there will be more parties to insurance due to “the extreme changes that we are suffering.” For his part, Miguel Relaño, partner of the specialized insurance firm Clyde & Co, confirms that his firm is already noticing “an increase in inquiries resulting from the drought.”
Will friction between farmers and insurers grow? Will there be an uptick in lawsuits? Relaño sees it as difficult. Agricultural insurance is, he explains, a niche with low conflict. It does not seem likely that high temperatures, drought or hail will stir up the hornet's nest. The low litigation rate has its reason for being in the law. The agricultural insurance law, one of the first laws of democracy, provides for an amicable conflict resolution mechanism when the owner and insurer do not agree on the quantification of damages. If an agreement is not reached, the parties are obliged to call an independent expert as a prerequisite to judicial proceedings (third party, according to slang). It is rare, therefore, for blood to reach the river. Although there are cases and cases. “The normal thing is that there is no disagreement with the assessment of the damages since, in general, the appraisal criteria are clearly established in the law,” says Relaño. The few conflictive scenarios, he adds, may have their cause in the late notification of the incident (which makes it impossible to assess the damages), the damages that have many causes, the wrong taking of samples by the owner for the appraisal or the lack of preventive measures.
Fires are, in general, a risk that agricultural policies also cover. Although they are more frequent in areas of virgin forest and mountainous terrain, according to Agroseguro records, this year compensation for fire damage to crops has amounted to 4.7 million euros. These are worrying data. “The comparison shows the seriousness of the matter, because the average for the last five years was 1.4 million, which represents an increase of 235% in compensation,” Sergio de Andrés points out.