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Azerbaijan interested in development of reliable agricultural insurance strategy

Business Materials 2 July 2015 16:35 (UTC +04:00)
Azerbaijan is interested in attracting international experts as part of working out the law on agricultural insurance, Azerbaijani Finance Minister Samir Sharifov said during the sixth Azerbaijan International Insurance Forum (AİİF-2015) in Baku July 2.
Azerbaijan interested in development of reliable agricultural insurance strategy

Baku, Azerbaijan, July 2

By Azad Hasanli - Trend:

Azerbaijan is interested in attracting international experts as part of working out the law on agricultural insurance, Azerbaijani Finance Minister Samir Sharifov said during the sixth Azerbaijan International Insurance Forum (AİİF-2015) in Baku July 2.

"Azerbaijan is interested in developing a reliable agricultural insurance strategy," he said. "It could ensure further development of agrarian industry and render support to farmers."

"This type of insurance is characterized by high risk," he said. "However, the government will play a leading role in the development of agricultural insurance in the country."

"We have already begun working out the bill on "State support for agricultural insurance" together with the Ministry of Agriculture," the minister said. "After coordinating in the government, it will be submitted for discussion to the parliament."

Currently, the government delivers subsidies for agricultural insurance, but their coverage is very small.

According to the amendments to the law "On assistance and agricultural development in Azerbaijan" approved in the summer of 2007, the share of public financing of premiums in agricultural insurance increased from 25 to 50 percent. Besides wheat, barley, maize, sunflower, potatoes, sugar beets and vegetables were included in the list of crops, insured through the state budget. The average tariff for agricultural insurance in Azerbaijan is about 1,500 manat per year (five percent per hectare). The average profit per hectare is approximately 25,000 manat per year.

Every year the state budget of Azerbaijan envisages the amount to cover 50 percent cost of the insurance contract with farmers, but, unfortunately, it has never been fully used. According to the experts who have studied this segment, one of the causes of underdevelopment of agricultural insurance in Azerbaijan is the lack of awareness of farmers about insurance and their opportunities.

According to the State Insurance Supervision Service under the Ministry of Finance, the charges on insurance of agricultural products of plant origin totaled 204,230 with payments at 61,270 manat, insurance of animals - 1.2 million manat with payments at 115, 300 manat in January-May 2015. The share of agricultural insurance in the total amount of fees is 0.65 percent, payments - 0.24 percent.

The official exchange rate is 1.0489 AZN/USD July 2.

Edited by CN

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