Insurance of Agrarian Risks in Azerbaijan Requires Efforts of State Organizations (video)

Azerbaijan, Baku, 26 September / Trend /

Leyla Abdullayeva, expert of Trend Analytical Center

Today the agrarian sector in Azerbaijan 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. The first plan includes the tasks of developing 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 insurance of the agricultural production is an important element of the system of financial-credit provision. 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.

But in each system of the insurance of agriculture there is one special feature - its high cost. Taking into consideration the climatic risks, the insurance companies should establish higher tariffs in the agrarian sector than in other branches in order not to prove to be in the loss. Only with the real state support it will be possible to reach the equilibrium between proposal and demand in this the field and speak about the creation of the system of agricultural insurance capable to give real guarantees to producers in the entire country. State must push slightly farmers to the insurance, not only explaining its need, but also assuming part of the insurance payments of producers.

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. 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.

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.

For example, in the USA the system constantly develops and the Government makes changes, introducing provisions to the Law on Agrarian Sector. Here it is necessary to note that such changes in the USA mainly deal with financing of program and procedure of subsidies.

As a whole, the functioning of system is realized by introducing laws and provisions on institutions, which are responsible for the agrarian insurance (Agency on Control of Risks, Federal Corporation for Agrarian Insurance). In Spain the basic condition of the system is fixed in the law on agrarian insurance. There are appropriate legislative documents in Canada at the level of provinces.

The correspondent can be contacted at: [email protected]

Subscribe to Trend in Google News! Subscribe
Private sector is actively involved in construction of administrative center in Turkmenistan
Private sector is actively involved in construction of administrative center in Turkmenistan
Russian Economy Ministry unveils priority spheres for co-op with Azerbaijan
Russian Economy Ministry unveils priority spheres for co-op with Azerbaijan
Russia’s Astrakhan, Baku discussing possibility of building ships for Azerbaijan
Russia’s Astrakhan, Baku discussing possibility of building ships for Azerbaijan
Loading Bars
Latest
Switzerland recognises Georgian Covid-19 certificates
Economy min: Facilitating banking transactions part of Iran-Russia agreements
Turkey expects coronavirus cases to peak in February
Number of COVID-19 cases in Kazakhstan tops 1,100,000
Chinese bridge at Pangong Tso nears completion, show satellite images
Beijing city raises vigilance as local COVID cases tick higher before Olympics
Over 300 mln COVID-19 cases confirmed all over world, WHO says
U.S., UK launch talks to resolve steel, aluminum dispute
India should adopt risk-based approach not blanket bans to contain Covid - WHO India head
Turkey, UAE sign FX swap deal worth $5 billion
Covid-hit microfinance industry in India seeks higher credit guarantee scheme
Excellent Iran-Russia ties serving strategic goals - Iranian president
Turkey soon to leave currency volatility behind: Erdogan
Cryptocurrency Bill in India unlikely to be introduced in upcoming Budget session
Head of EU delegation expresses condolences to Azerbaijan on occasion of January 20 tragedy
First Vice-President Mehriban Aliyeva shares post on her official Instagram page in connection with 32nd anniversary of January 20 tragedy (PHOTO)
Azerbaijan commemorates 32nd anniversary of 1990 'Black January' tragedy
Organization of Turkic States makes post in connection with January 20 tragedy
UK shares experience in mine action with Azerbaijan - Ambassador
Azerbaijan adheres to start of delimitation of border with Armenia process without any conditions - minister
PM Johnson drops COVID rules in England
President Ilham Aliyev makes Facebook post on occasion of anniversary of January 20 tragedy (PHOTO)
Afghanistan opens gates of Kamal Khan Dam allowing water into drought-hit Iran
Azerbaijan hosts auction for commissioning mineral deposits
Russia allows tomato imports from several Turkmen enterprises
Azerbaijan to showcase its non-oil products at int’l exhibitions
Price indexes of financial, construction sectors at Uzbek stock exchange fall
Uzbekneftegaz creates new unit to handle partnerships with world's largest financial institutions
Money transfers from Georgia to Azerbaijan increase
Kazakhstan’s December compliance to OPEC+ deal unveiled
Chinese company discloses volume of cargo containers sent to Uzbekistan in 2021
Georgia's Imereti Agrozone receives investment proposals
No apparent crude export impact from civil unrest in Kazakhstan - EIA
Baku refinery increases oil output
Uz-Kor Gas Chemical company opens tender for supply of protective equipment
Gas consumption grows in Azerbaijan
Activities of military units stationed in Azerbaijan's liberated territories inspected (PHOTO)
Azerbaijani FM rejects unfounded allegations of Armenian representative at OSCE forum (PHOTO)
SOCAR boosts oil and gas exports
Iranian Ministry of Roads, Urban Development reveals data on activities of ports
Iran’s Bahar Azadi gold coin rising in price
Azerbaijan significantly increases gas production
Kazakhstan discloses cargo traffic via Aktau port for 2021
U.S. mortgage interest rates climb for 4th straight week
Azerbaijan provides lump-sum allowance to families of January 20 tragedy martyrs, victims
Azerbaijan announces increase in freight traffic by all modes of transport
MP: Pecresse's illegal Karabakh trip gives rise to legal responsibility
Azerbaijan announces priorities as chair of OSCE Forum for Security Co-operation
Georgia’s domestic electricity production up in 2021
SOCAR increases oil production y-o-y
Uzbek Central bank shares data on number of bank cards used in 2021
Azerbaijan's traffic police to check citizens going on trips to liberated lands - ministry
Kazakhstan unveils trade indicators with largest trade partners in EU
Cargo transportation through Iran’s Mashhad Airport soars
Azerbaijan discloses number of people involved in self-employment program in 2021
Private sector is actively involved in construction of administrative center in Turkmenistan
Azerbaijan shares data on number of vaccinated citizens
Iran declares amount of loans issued for housing, construction sector
Transportation of oil from Kazakh Aktau port to Azerbaijan unveiled
Azerbaijan's ANAMA shares information on mine incident in Azerbaijan's Goranboy region
Iran beats new record on gas consumption
Azerbaijan confirms 1,151 more COVID-19 cases, 543 recoveries
Azerbaijan's Azerishig talks appeals of businesses for electric supply in liberated areas
Uzbekistan's UzAuto Motors faces semiconductors shortage
Turkmen plant produces significant volume of urea fertilizer
Azerbaijan, Ukraine discuss prospects for transport cooperation
Azerbaijani servicemen take part in parachute training in Turkey (PHOTO)
Germany surpasses 100,000 daily COVID-19 cases for first time
Azerbaijani citizens allowed to visit liberated Aghdam, Shusha once a year - ministry
Iran reveals COVID-19 data for January 19
Azerbaijani MFA issues statement on occasion of January 20 - National Mourning Day
IRICA shares data on import of COVID-19 vaccine to Iran
Uzbekistan Airways to conduct regular flights to Russia's Ufa
Turkmen state concern increases natural gas production in 2021
Indian Vijay Mallya can be evicted from London home over unpaid loan, UK court orders
Iran sees increase in passenger transportation via railways
Russia documents 33,899 daily COVID-19 cases, highest number since November 27
Salaries of employees of presidium, office of Azerbaijan National Academy of Sciences up
Turkmenistan increases volume of loans issued to economic entities
Azerbaijan reduces electricity exports to Georgia
Azerbaijan's ANAMA creates new operational groups
Azerbaijan hands over several prisoners to Iran
Chamber of Commerce talks steps Iran could take to boost trade turnover with Russia
Investigation will show whether Nazarbayev was involved in unrests in Kazakhstan - MFA
Kazakhstan's Minister of Defense appointed
Veyseloglu Group of Companies presented its retail index for 2021
Ethylene output up in Azerbaijan
Georgia's motor oil imports drop, one of possible reasons made public
Revenues from compulsory state social insurance grow in Azerbaijan - minister
Azerbaijan blocks betting payment method in bookmakers using bank cards
Georgia continues path to sustainable growth – World Bank
Azerbaijan boosts gasoline, diesel production
Azerbaijan records growth in nominal GDP
Azerbaijan increases salaries of employees of some organizations financed from state budget
Georgia retains its macroeconomic stability – minister
Iran to improve economic ties with neighboring countries - official
UK inflation rises to highest in nearly 30 years
New minister of health appointed in Azerbaijan
State Oil Fund of Azerbaijan reveals distribution of investment portfolio
Value of Turkmenistan’s imports from Azerbaijan rise for November 2021
All news