German side ready to render agro insurance grant funding  in Armenia

ArmInfo. To increase the regional standing  of  Armenia, the most important is the implementation of the efficient management principles and the consequent struggle against corruption, and the unification of the power, Matthias Kiesler, the Ambassador of Germany to Armenia, stated on the margins of the session of  German-Armenian Commission on financial and technical cooperation, held at the Ministry of Finance of Armenia. 

As the press office of the Ministry of Finance states, during the session the  Germany -funded  projects under implementation were also discussed, particularly, in respect to the further funding by the German Bank of Development KfW, projects on solid household waste management in Vanadzor and project on support in the field of energy saving etc.

According to Armen Hayrapetyan, Armenian Deputy Finance Minister, German-Armenian intergovernmental cooperation  has  long and productive history, which is  a good basis for the further improvement of cooperation and good relationship.

As  Matthias Kiesler, the Ambassador of Germany to Armenia, stated, Germany is one of the biggest financial donors for Armenia. According to him, to increase the regional authority of Armenia, the main priority is to implement principles of effective management and the consequent struggle  against the corruption.

During the session issues, related to agro insurance  implementation in Armenia, were also discussed, and the German side expressed readiness to allocate grant funds.

The agenda comprised also other projects, implemented at the cost of regional grant funds, particularly, the Caucasus Nature Fund Project, the Southern Caucasus Biodiversity Management Project etc.

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.