Pilot agricultural risk insurance program launched in Armenia for the  first time

ArmInfo. For the first time in Armenia, pilot agricultural risk insurance program has been launched. On February 28, after the government meeting, answering the question  of ArmInfo, the First Deputy Minister of Agriculture of Armenia Gegham Gevorgyan said.

The project is being carried out in experimental mode in 5 regions of  Armenia - in Ararat, Armavir, Vayots Dzor, Tavush and Aragatsotn.  About half a billion drams will be allocated for financing the  program. The process of concluding contracts has already started, and  the insurance companies involved in the process will deal with the  sale of insurance policies.

In mid-February, it was announced about the start of training courses  for obtaining an appropriate certificate of agricultural damage  insurance. Upon completion of the course, an exam will be held,  according to the results of which, certified participants will have  the opportunity to cooperate with insurance companies of Armenia.

At the same time, Gegham Gevorgyan refrained from calling those  insurance companies that have documented their desire to cooperate  with the Ministry of Agriculture in the framework of the agricultural  insurance program. The Deputy Minister laid this "mission" on the  shoulders of insurance companies, which may themselves announce their  participation in the program in the coming days.

As ArmInfo informed earlier, a  pilot program on agro-insurance is   planned to be implemented in Armenia. "Nothing like this has been  done before  - the system provides for 100% compensation  for  farmers' losses,"  Gegham Gevorgyan said in the end of November 2018.  "All farmers are unequivocally in  favor of the introduction of the  program,"  Gevorgyan said, stressing  that the program provides for  subsidized  insurance contributions.  State subsidies will amount to  60-65% of the cost of the insurance policy, and the farmer will have  to pay 30-35 thousand drams per 1 hectare. NARMA - National  Agroinsurance Risk Management Agency (the name, as Gevorgyan pointed  out today, was changed, but the functions remained the same) will be  the tool to evaluate the consequences of natural disasters. An  institute of damage evaluators will be created, the main insurable  risks selected. NARMA will also develop insurance products.

According to the Ministry of Agriculture, the German KfW bank should  allocate a grant of 5.3 million euros for the implementation of a  pilot program for the implementation of the agricultural insurance  system in Armenia. The principal amount of a grant of 4.8 million  euros should be directed solely to subsidize the purchase of  insurance policies by farmers. The remaining amount of 515 thousand  euros will go to cover the costs associated with consulting. At the  same time, the RA Government represented by the Ministry of  Agriculture will co-finance the program in the amount of 5 million  euros.

Climate   Investment Fund will also provide 2 million euros, of which  200 thousand euros will be used to subsidize the purchase of  insurance   policies, and 1.8 million euros - for consulting  services. A   consortium consisting of three companies will handle  consulting.   

Together with these companies, the Ministry of Agriculture and the    Central Bank are preparing the first pilot project on agricultural    insurance in Armenia.  1.9 million euros will be allocated for the    establishment of NARMA, the retraining of personnel and the formation    of an institute of an appraiser, the development of by-laws and the    services of a consulting company.

At the same time, it should be noted that today agriculture losses  from natural disasters in the amount of about 12 billion drams (about  $ 25 million) are compensated by the state, however, in the case of  insurance, these compensations will be assigned to insurance  companies.