Deputy Minister: Introduction of agricultural insurance in Armenia is a top-priority issue

ArmInfo. Introduction of agricultural insurance in Armenia is a top- priority issue in confronting risks related to hail, drought and frost, Deputy Minister of Agriculture Robert Makaryan told ArmInfo's correspondent.

According to the Deputy Minister the proposal was included in the governmental program and soon action plan on its implementation will be developed. "Currently work is being conducted with various international structures aimed at organizing exchange of experience as well as attracting funds for development of the field", the Deputy Minister stated emphasizing that creating relevant preconditions for further development of this system is the key activity currently. 

Yesterday answering to ArmInfo's question how realistic is introduction of agricultural insurance the Minister of Agriculture Ignatiy Arakelyan stated that the initiative was included in the government's program. According to him proportional participation of the state and the German bank is envisaged in its implementation. "If the program is approved the pilot program will be launched and possibly will be introduced starting from the next year", he noted.

To note, the parliament has approved the governmental program today.

To recall, Minister of Agriculture of Armenia Ignaty Arakelyan told reporters on September 29 that a pilot program of agricultural insurance will be implemented in one of the Armenian communities. In his words, the agricultural sector is the most risky one. If the pilot program is a success, we will find solutions to all problems of farmers connected with the activity of anti-hail stations, pests and others, Arakelyan said. 

Earlier in May 2011, then Prime Minister Tigran Sargsyan said introduction of agricultural insurance is inexpedient in Armenia, as the sector comprises just small farms, while farmers will hardly make insurance payments. Nevertheless, KfW Bank allocated 400,000 EUR this year for development of a concept of agricultural insurance for Armenia and Georgia. Yet in late 2014, Minister of Agriculture Sergo Karapetyan said at a final press conference of the Ministry that in 2015 together with INGO Armenia the Ministry planned to implement a pilot program of cattle insurance in Vayots Dzor region. Where the inventory of the cattle was over. He said no other insurance company agreed to undertake such risks.

Meantime, INGO Armenia executive officer is not pleased with the results of the activity of the joint working group.  He said the working group was set up in 2013. It comprised one employee of INGO Armenia and 3 employees of the Ministry of Agriculture. The risks were assessed. That was all the group did.  "Agricultural sector, especially the one in Armenia, suffers high losses due to several factors. The first is concentration of all risks on the not-large territory.  Second is the risk of nearly all types of natural calamities - floods, freezing, hails, and landslides. Agriculture insurance in such case must be semi- compulsory so that at least 30%-50% of farms are insured.  Otherwise, it is unreasonable to insure the sector," Altunyan explained. German KfW Bank once expressed an interest in such insurance product, but the company lost its interest in the agricultural sector and the group was dissolved 5-6 months ago. The insurer promised to return to this issue when "an element of commerce emerges in the given sector and the insurance of the agricultural sectors becomes economically substantiated.  Otherwise, the scientific research institutions should study the sector," he said.