French vignerons ask government for insurance against bad harvests

Independent winegrowers across France are calling on the government to underwrite an insurance scheme to protect them from the effects of bad harvests or currency fluctuations.

Poor harvest: calls for income guarantees

As European aids such as crisis distillation and vine-grubbing schemes are coming to an end, winemakers are hoping the government can replace these with other forms of income guarantees.

‘With the 2012 harvest looking to have the lowest yields for 10 years, winemakers are once again reminded of the incredible instability of their businesses,’ Christelle Jacquemot of the trade association Vigneron Indépendant told Decanter.com.

‘It is imperative that we find legislative solutions to the problems facing independent winemakers.’

A 2011 study by Parisian insurance consultant Luc Boucher on behalf of Vigneron Indépendant found that yearly vineyard incomes across France typically fluctuate by as much as 40% from year to year, making long-range planning and control of cash-flow increasingly difficult.

This has been exacerbated by the financial crisis, as banks are increasingly unwilling to fund small businesses.

The study found a huge discrepancy in income, depending on location.

According to Ministry of Agriculture figures, average yearly revenues (after basic running costs but before owners pay themselves a wage) range from an average of €11,000 in the Languedoc to €25,000 in the Loire and Aquitaine, €40-60,000 in Alsace and Burgundy, and €125,000 in Champagne.

‘Clearly the introduction of this insurance would not be cost-effective in Champagne, or for the biggest estates in Bordeaux,’ Boucher told Decanter.com. ‘But it makes sense for average, small estates across France who find it very difficult to cope with such widely fluctuating revenues.’

‘Currently there are specific insurance products to guard against frost risk and other meteorological conditions. This would widen the cover to protect against economic risks,’ said Jacquemot.

‘It may be that the first step will be to introduce a mutual fund contributed to by winemakers and the European Commission, but a full insurance scheme is our long-term goal.’

Written by Jane Anson in Bordeaux