Description financing model: Cooperative-mediated supply chain finance and risk-sharing arrangement

The off-taker leverages its balance sheet to de-risk upstream suppliers, bundling yield insurance, with premiums covered by the cooperative, and technical assistance to incentivize the adoption of sustainable practices and secure supply.

Applicability: Best suited to well-structured supply chains with formal offtake agreements

Considerations: Scalability depends on the willingness of food & agri corporates to cover the insurance premium cost on behalf of their suppliers and on the availability of sufficiently granular MRV data to trigger payout reliably at scale

Description of de-risking tool(s):

Third party insurance premium coverage: Third party coverage of insurance premium costs, for climate, yield, or other production risks, enabling farmers and smallholders to access risk protection tools that would otherwise be financially out of reach, and reducing the risk aversion that deters adoption of new practices

Offtake agreements: Contractual commitments by value chain actors to purchase sustainably produced outputs at pre-agreed terms, providing revenue certainty for farmers and improving bankability for external financing

Case study description:

This model supports farmers in the Loiret region (France) in transitioning to protein pea cultivation – a low fertilizer, plant-based protein substitute that offers strong agronomic potential but is exposed to significant yield volatility. The cooperative addresses this barrier directly by bundling technical assistance with yield insurance for farmers who commit to supply, reducing the perceived risk of adoption and driving the uptake of regenerative practices across the value chain. By covering the insurance premium on behalf of farmers, the cooperative reduces significantly the financial deterrent at the point of decision, making the transition both accessible and commercially credible.

(1) Insurance broker Bessé works with Axéréal, a French agricultural cooperative and off-taker, to assess the insurance needs of protein pea growers

(2) AXA Climate designs a tailored insurance product for protein pea cultivation, defining premium costs, payouts levels (in €/ha) and the yield-loss thresholds that trigger them

(3) Axéréal subscribes to the AXA Climate policy distributed through Bessé, covering the premium cost on behalf of its growers to protect them against yield loss

(4) Axéréal provides growers with technical assistant to support the proper adoption of regenerative agriculture practices throughout the growing cycle

(5) Monitoring, reporting and verification (MRV) is conducted to assess harvests’ performance against agreed benchmarks

(6) Harvest performance data are shared with AXA Climate to assess whether payout thresholds have been breached and trigger disbursement accordingly

(7) Axéréal consolidates insurance payouts and redistributes them to affected farmers in case of yield loss

To date 400-500 farmers and 5,000-7,000 hectares have been covered by the insurance program. Estimates tell that without the insurance incentive, almost half of the farmers would have dropped growing peas.