Monday, February 17 2020 15:24
Alexandr Avanesov

RA Ministry of Economy: Agricultural Risk Insurance Program to be  expanded in Armenia

RA Ministry of Economy: Agricultural Risk Insurance Program to be  expanded in Armenia

ArmInfo. Agricultural risk insurance program in Armenia will be expanded. This was announced at a press conference in Yerevan on February 17 by head of the   Department of Agricultural Programs Elaboration, Resource Use and  Cooperative Development of the RA Ministry of Economy Ira Panosyan.

According to her, until 2024 it is planned to include another 10  crops, including vegetables, in agricultural risks insurance. Ira  Panosyan noted that there is great interest in acquiring insurance  policies, but there is a need to increase the level of trust, given  that the program is new. She recalled that at present, as part of the  pilot program for the implementation of the agricultural insurance  system, it is provided that if, before February 21, an economic  entity insures the risks for degrees, fire, and spring frosts, then  state subsidies can reach 70%. In case of signing an agreement  separately for degrees and fire - up to 50%, and for spring frosts -  up to 60%. Ira Panosyan added that according to statistics, over 6  years, land users suffered damage by 110 billion drams, while not  receiving proper compensation.

"The old system of state compensation for peaches, apples, grapes,  apricots will no longer be valid, that is, we are talking about crops  for which the project is already in place. If we are talking about  crops that are not included in the program, while the old rules are  in force," she concluded.

 Earlier, ArmInfo reported that the Armenian government on October  24, 2019 approved the procedure for subsidizing insurance payments as  part of the pilot agricultural risk insurance program. Insurance  policies are sold in Ararat, Armavir, Aragatsotn, Kotayk, Vayots Dzor  and Tavush regions in case of hail, and farmers from Armavir and  Ararat are insured against spring frosts. The Armenian side together  with the German Development Bank KfW subsidizes half of the insurance  payments - in the range of 50-60%, depending on the conditions.  Farmers are given the opportunity to receive compensation for damage  caused by the insured risks, on average, in the amount of 500-600  thousand drams per hectare, depending on the location of the land and  productivity, paying 50-60 thousand drams per policy. Farmers will be  able to choose one of 5 insurance policies.

In this regard, the National Agency for Agricultural Insurers has  been established, whose so far Ingo- Armenia, Rosgosstrakh Armenia  and SIL Insurance are partners.  They specify the internal mechanisms  for the further maintenance of policies for this class of risks.  Reinsurance of agricultural risks will be a major SwissRe Swiss  company. The German bank KfW has allocated a grant of 5.3 million  euros for the implementation of the pilot program. 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 a 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  AINA, the retraining of personnel and the formation of the  institution of an appraiser, the development of by-laws and the  services of a consulting company.

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During the first 5 years, the agricultural insurance market in Armenia will operate at a loss
 Wednesday, November 6 2019

ArmInfo. From the next year, the agricultural risk insurance system will start operating in Armenia. At first this program will be pilot, since the situation is similar to the one in mathematics called the equation with many unknowns.

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