Friday, August 31 2018 13:18

ArmInfo. Since March 2019, in the Ararat, Armavir and Shirak regions of Armenia, a pilot agro-insurance program has started, risks of hail and frosts will be insured. This was announced on August 31 by Armenian Minister of Agriculture Artur Khachatryan.

 

According to the minister, in Ararat and Armavir regions, the risks to be covered are grapes and fruits, in Shirak - crops of potatoes and grains. "If everything goes according to the desired scenario, it is expected that the program will spread to all regions of the country," the minister said. At this stage, the process is underway to establish the National Agroinsurance Risk Management Agency for National Agricultural Risk Management (NARMA). The Bureau will be the instrument by which the consequences of natural disasters will be assessed. An institute of damage appraisers will be established, the main insurable risks will be selected. NARMA will also develop insurance products. The body is expected to be established by the end of December. As previously believed by the Ministry of Agriculture, by the end of 2018 it will be possible to launch a pilot preliminary program on agricultural insurance. In the first quarter of 2019, insurance policies will be ready, and specialists from KfW have already been selected for this purpose, which together with the hydrometeorological service, the Ministry of Emergency Measures and the National Statistical Service are collecting data. During the pilot program, KfW will grant a grant of 5.3 million euros, of which 4.8 million euros will be used solely to subsidize the purchase of insurance policies, and the remaining 515,000 euros will be used to cover the costs associated with consulting. The RA Government, represented by the Ministry of Agriculture, will co-finance the program in the amount of 5 million euros. The Climate Investment Funds will also provide 2 million euros, of which 200,000 euros will be used to subsidize the purchase of insurance policies, and 1.8 million euros for consulting services.  Consulting will be carried out by a consortium of three companies, in cooperation with which the Ministry of Agriculture and the Central Bank will prepare the first pilot agricultural insurance project in Armenia in 2018,

within the framework of which the National Agroinsurance Risk Management Agency (NARMA) is planned to be established. The creation of the Bureau, the retraining of personnel and the formation of an appraiser's institution, the development of by-laws and the services of a consulting company will be allocated 1.9 million euros. The Ministry of Agriculture is confident that the insurance system will serve as an incentive for increasing investment by small and medium-sized farmers who, with the launch of the system, will feel themselves more protected.

 

To note, in order to reduce risks, a pilot program for the introduction of missile anti-hail systems is already being implemented jointly with the Ministry of Emergency Situations. In addition, from 2018, the state program began to subsidize interest rates for the introduction of anti-hail protection systems.  ACBA-Credit Agricole Bank, INECOBANK, Converse Bank, Armswissbank, UKC "Farm Credit Armenia", Ardshinbank, Armbusinessbank and UKC "Corporation for Development and Investments of Armenia" (DICA) already participate in the implementation of this state program.  According to the Ministry of Agriculture of the Republic of Armenia, under the program of subsidizing interest rates on loans for the installation of anti-hail grids, loans will be issued with a maturity of up to 7 years, at a rate of up to 14% per annum, subsidizing which will allow the client to lend at a rate of 2%.