ArmInfo. The agricultural insurance process starts in Armenia. Prime Minister of Armenia Nikol Pashinyan announced on his Facebook page .
The prime minister expressed the idea that the agricultural insurance mechanism still needs to be streamlined, adjusted, improved, but it must be tested in such a way as to understand its strengths and weaknesses, according to the logic "a chain is no stronger than its weakest link," he wrote.
He informed that at the first stage the insurance will cover apricot orchards and vineyards, and that the risks covered by the insurance are hail, fires and spring frosts. Farms from Armavir, Ararat, Aragatsotn, Tavush, Kotayk and Vayots Dzor regions will be insured against hail and fires, and farmers from Armavir and Ararat will be able to insure against spring frosts. According to the information, insurance coverage, as well as agricultural crops falling under it, will be expanded annually, "until it covers all regions of Armenia."
In addition, it is reported that farmers will be able to choose one of 5 insurance policies. The size of the insurance premium will be determined based on a risk assessment on a particular land plot.
So far, with any insurance package, 50% of the amount of the insurance premium will be paid by the Armenian government, and with full insurance, that is, simultaneous insurance against all risks - hail, fire and frost, a 10% discount is expected.
Earlier, ArmInfo reported that the state within the framework of the agricultural insurance project will subsidize 50% of the cost of the insurance policy (against the previously mentioned 60-65% - Ed.). Created by the Agriculture Insurers National Agency (www.aina.am). So far, the partners of the agency are three companies - Ingo-Armenia, Rosgosstrakh Armenia and Sil Insurance. They specify the internal mechanisms for the further servicing of policies for this class of risks. As part of the pilot project, agricultural risks will be reinsured by a major Swiss company Swiss Re. The first insurance contracts are supposed to begin to be concluded in January 2020.
According to ArmInfo, the German KfW bank allocated a grant in the amount of 5.3 million euros for the implementation of the pilot program for the implementation of the agricultural insurance system in Armenia.
The main grant amount of 4.8 million euros was supposed to be directed exclusively to subsidizing the purchase of insurance policies by farmers. The remaining amount of 515 thousand euros went to cover the costs associated with consulting.
At the same time, the Government of the Republic of Armenia, represented by the Ministry of Agriculture, will come out with co-financing of the program in the amount of 5 million euros. The Climate Investment Funds 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 of three companies will handle consulting. 1.9 million euros were allocated for the creation of the National Risk Management Bureau in the field of agricultural insurance, the retraining of personnel and the formation of an appraiser institution, the development of by-laws and the services of a consulting company.