Insurance of agrarian sector is important and difficult process

In present development stage of the agriculture of Azerbaijan, when mainly the transfer to the private form of management was completed, the first plan includes the tasks of developing the infrastructure of the agrarian market. The important element of this infrastructure is the system of financial-credit provision, in particular, the system of insurance of the agricultural production. The insurance in the agricultural sphere of Azerbaijan is one of less developed sectors, its share in the general portfolio of insurance comprises less than 1%.

The problem of the financial protection of their property interests in view of the high dependence of the agrarian sphere of the economy on the spontaneous forces of nature always stands before the agricultural producers. Thus, for instance, natural cataclysms in Azerbaijan showed the importance of the development of insurance in the agricultural sector at the beginning of the present year.

The forces of nature are not predicted. Therefore, there is insurance with one of the effective instruments of managing risks in the agriculture and making it possible to ensure stable conditions of the production activity of economic subjects irrespective of the natural anomalies. The effectiveness of this protection under the market conditions depends on the level, development of economic system as a whole and system of agrarian insurance in particular.

Unfortunately, today the agrarian sector lost its positions in the national economy. The collection of the industrial crops of cotton growing, tea growing, tobacco-cultivation and viticulture especially sharply reduced. However, at the beginning of 1980 the viticulture was the priority sphere of agriculture, which brought nearly 40% of the national income.

But even today the viticulture has large chances to be revived. The development of the agrarian sector in Azerbaijan can become one of the priority directions of the national economy, being serious alternative to the oil sector of the country. The farmers need support for this. State repeatedly rendered financial aid to the agrarian sector, special attention was paid to the agricultural production.

Due to the measures taken, it was possible to achieve the noticeable successes in the collection of grains, and also to re-establish the activity of the poultry-breeding enterprises for creating industrial production of the bird meat and chicken eggs. Over recent years, due to an increase in the financial possibilities of State, the agrarian sector began to obtain significant financial aid and grants for agricultural production.

New stage for the development of the country's agrarian sector must be State Program on Reliable Foodstuffs Supply for Population of Azerbaijan in 2008-2015, which was approved by the President of the country. The Program envisages measures on insurance in the agriculture. The measures imply the introduction of contemporary insurance in the agricultural production, and also the improvement of the list of risks for the financed agricultural property.

The list of the agricultural crops being insured due to the Public budget includes the wheat, barley, corn, sunflower, potatoes, sugar beet, vegetables, verdure. The list also includes fruits, fig and leguminous cultures. According to the additions made to the law on aid and development of agriculture in Azerbaijan, the share of State financing for the agricultural insurance was increased from 25% to 50%. The average tariff for the agricultural insurance in Azerbaijan is nearly AZN 1500 per year (five percent per hectare), provided that the average profit on 1 ha is nearly AZN 25,000 per year.

The insurance of the agrarian risks is an important and difficult type of insurance, which requires joint efforts of insurance sector and governmental bodies for its development. The insurance of the risks of the agricultural production in the entire world is an important element of the financial-credit system for agricultural producers. The first and central goal of the insurance of the agricultural risks is to partially or completely compensate farmer the loss of harvest, which is possible due to unfavorable natural occurrences such as drought, hail, hurricane, etc.

The second goal of insurance is to improve the financial condition of agricultural producers from the point of view of his solvency. The credit organizations of all types - banks, credit unions, private individuals - give preference to the agricultural producer, who has a guarantee of maintaining certain level of his income in case of natural calamities and loss of harvest.

At present in the world there are different systems of the agricultural insurance supported by States. Thus, for instance, in Greece the system of insurance is in the hands of State. Through its state insurance company the State collects insurance payments, manages functioning of the program and covers losses. Commercial insurance companies deal only with the insurance of the cultures, which do not have support from the State.

The systems based on the close co-operation of state and private sector effectively work in Spain and Portugal where the State plays a key role, ensuring the subsidy of insurance premiums and re-insurance. In Italy, France, Austria and Germany the preference is given to the private sector.

It is early to speak of how this system will function in Azerbaijan in future, but the experience of other countries testifies that it is necessary to accept at least 5 years with the prospect to form the system. Usually firstly the basic concept of the system of agrarian insurance is devised, in which it is desirable to prescribe the role of basic sides (state, insurance companies and producers) and to determine the tasks of system, and then it is possible to make additions.

Azerbaijan confirms 1,259 more COVID-19 recoveries
Azerbaijan confirms 1,259 more COVID-19 recoveries
Azercell’s Mobile Eye Clinic joins campaign for IDPs initiated by the UN (PHOTO)
Azercell’s Mobile Eye Clinic joins campaign for IDPs initiated by the UN (PHOTO)
Teimur Radjabov defeats Levon Aronian at Skilling Open tournament
Teimur Radjabov defeats Levon Aronian at Skilling Open tournament
Loading Bars
Latest
Uzbek-Korean JV to buy accumulator batteries via tender
Preliminary instructions have already been given for restoration of railway to Nakhchivan - President Aliyev
We have destroyed Armenian fascism - President of Azerbaijan
We will restore Kalbajar, let no-one have any doubts about that - President Aliyev
Armenian “historians” and fraudsters Armenianized ancient Albanian churches - President of Azerbaijan
When I was in Aghdam, I could not find single safe building - President Aliyev
Uzbekistan discloses tasks for service sector dev’t
Iran considering extraterrestrial farming in Azerbaijan
Export of leather goods from Turkey to France down
Uzbekistan’s Ministry of Finance to provide Uzbek banks with funds for family entrepreneurship dev’t
If Heydar Aliyev had not come to power in 1993, Azerbaijan would have lost its statehood in general - president
Main culprit in occupation of our lands is Popular Front of Azerbaijan - President Aliyev
Demand for Turkish clothing on Georgian market edges up in October
Georgian Basis Company to negotiate with Turkey and African countries for export
Italian companies interested in restoration work on Azerbaijan's liberated lands (PHOTO)
Azerbaijan lowers consumer spending indicators in 3Q2020
Azerbaijan reveals state budget expenditures for 3Q2020
President Aliyev congratulates people of Azerbaijan on occasion of Kalbajar's liberation from occupation
Iran's Lordegan Company declares revenues
Iran slightly raises electrical goods import from Turkey in 10M2020
Details on Enguri HPP rehabilitation process in Georgia unveiled
Scientist talks Azerbaijani toponyms appropriated by Armenia
Procedure for quarterly payment of VAT in Uzbekistan stays unchanged
Georgia reports 3,071 new coronavirus cases, 3,366 recoveries
Rate of urea production doubled in Turkmenistan
Late-planting potatoes being harvested in Turkmenistan’s Dashoguz region
Building materials import in Uzbekistan down
Switzerland sees potential in strengthening ties with Azerbaijan in renewable energy
Gas production in Iran grows
Azerbaijani Finance Ministry puts up medium-term bonds for auction
Azerbaijan sends samples of local tobacco to Brazil, Germany
Azerbaijan fulfilled UN's resolution by entering Kalbajar- speaker
President Ilham Aliyev addresses the nation (PHOTO)
Hybrid cars gaining popularity in Azerbaijan - Toyota Center Baku
Kazakh soft drinks manufacturer eyes building plant in Uzbekistan
Equinor, SOCAR work on detailing possible development solution for Karabagh project
Azerbaijan shares satellite images of liberated Kalbajar district (PHOTO)
Cargo shipments in containers through Port of Baku up
Ukrainian Bees Airline plans to launch flights to Georgian Batumi
Azerbaijan contributed to protection of Christian landmarks worldwide - Azerbaijani Deputy Minister for Culture
Baku-Tbilisi-Ceyhan oil transportation to Turkey up m-o-m
Azerbaijani army firstly to take control of border with Armenia, highland positions in Kalbajar - MoD (PHOTO)
Turkmenistan, Japan have prospects for intensifying mutually beneficial relations
Uzbekistan to study Germany’s experience in renewable energy field
Azerbaijan reveals data on export and import of cotton over 10M2020
Uzbekistan launches legumes exports to Laos for first time ever
Weekly review of Georgian capital markets
Ukrainian refineries get around 138,000 tons of Azeri Light via UkrTransNafta
Azerbaijani Armed Forces units enter Kalbajar (PHOTO/VIDEO)
Revenue of Kazakhstan's KazMunayGas plummet year-on-year
Personnel changes at AccessBank
Kalbajar returned to its true owners - Turkish government
Assembly of new-generation combines starts in Azerbaijan
Azerbaijani currency rates for Nov. 25
Iranian currency rates for November 25
US welcomes observance of agreements on settlement in Karabakh - Pentagon
Kalbajar district's return to Azerbaijan - new triumph of historical justice, says expert
As winter approaches, Egypt braces for second coronavirus wave
Turkmenistan, Malaysia aim to boost co-op in oil and gas sector
Uzbekistan reveals its COVID-19 data for November 25
President Ilham Aliyev allocates AZN 5m for design and construction of Barda-Aghdam railway line
Iranian Energy Exchange announces products to be on sale November 25
Fitch withdraws ratings of Yerevan due to incorrect information
Iran to expand economic relations with Qatar
Iran announces readiness to increase percentage of enrichment
Davit Zalkaliani congratulates Gerry Connolly on election as President of NATO PA
First video footage from liberated Kalbajar region (PHOTO/VIDEO)
720 new coronavirus cases in Kazakhstan over last 24 hrs
Energy, transport sectors – main area of Romanian interest in Turkmenistan
1 dead, 2 missing after workshop collapse in SW China city
Import of Turkish clothes by Uzbekistan drops sharply
75 more coronavirus patients die in Moscow in past day — crisis center
Number of COVID-2019 cases across globe up by over 463,000 in past day — WHO
Israel reports 798 new COVID-19 cases, 330,796 in total
Units of the Azerbaijan Army enter Kalbajar region
Pennsylvania certifies election results for Biden
Iran, Qatar sign MoU to cooperate on economy
Kalbajar region of Azerbaijan being liberated from Armenian occupation today
China, Japan eye closer cooperation amid COVID-19 pandemic
Construction of the TAPI gas pipeline in Afghanistan territory will continue next year
ICESCO SecGen sends letter to President Aliyev
Azerbaijani, Russian presidents hold phone talks
Urban transformation back on track for ‘abandoned’ Istanbul neighborhood
“Scorched earth” strategy of Armenians leaving Azerbaijani Kalbajar region did not escape EC attention - report
President Rouhani: Iran to be able to mass produce coronavirus vaccine soon
Turkmenistan is convinced of the need to attract political-diplomatic tools to achieve peace and prosperity in Afghanistan
Georgian banks see increase in interest income
Azerbaijan’s revenues from export of hazelnuts down
Azerbaijan’s import of plastics and plastic products drops
Turkmenistan will continue to cooperate with Afghanistan on security issues
Nursing homes will be first to get COVID-19 vaccine in Spain
Troops from Azerbaijan's Nakhchivan who took part in Karabakh conflict, return home (PHOTO)
Speaker of Azerbaijani parliament takes part in int’l conference initiated by Turkish parliament, PACE (PHOTO)
Any result that acceptable for Azerbaijan - acceptable for Turkey too, FM says
Volume of paid services in Azerbaijan’s Nakhchivan Autonomous Republic down
Azerbaijan shows aerial footage of Shusha city (VIDEO)
Kazakhstan eyeing to develop information system for accounting of oil and gas condensate
Anglo Asian Mining's production of precious metals in Azerbaijan may decrease
Uzbekistan eyes to increase share of renewable energy sources by 2030
Airbus CEO says industry might need until 2025 to reach pre-crisis levels
All news