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Which model of agricultural insurance suits Azerbaijan the most?

Business Materials 4 October 2017 17:26 (UTC +04:00)

Baku, Azerbaijan, Oct. 4

By Anvar Mammadov – Trend:

Turkish model of agricultural insurance, which is called TARSIM, is the best for using in Azerbaijan, Khayal Mammadkhanli, insurance expert, president of training and consulting center “Consultant”, told Trend.

“Various models of agricultural insurance are used in various countries – the ones fully supported by state, the ones where obligations are divided between state and private sector, and the ones financed completely through private capital,” Mammadkhanli said.

“The main problem today is that Azerbaijan has not yet decided on what model of agricultural insurance will be applied.”

Azerbaijan is studying the models of different countries, Mammadkhanli said.

“For example, Turkey uses the TARSIM model, where the state provides support to all farmers and farms in the form of a certain amount of insurance payments, while farmers pay on their own for additional insurance coverage,” he said. “Another neighbor of Azerbaijan, Russia, also uses a mixed model of agricultural insurance.”

He noted that it will be very easy to apply the Turkish model of agricultural insurance in Azerbaijan.

Mammadkhanli said that besides covering the risks of farmers, introduction of agricultural insurance in Azerbaijan will have another advantage, which may not be noticed at first glance.

“This will allow us to obtain qualitative statistical information on the livestock in the country, its mortality, yields, etc.,” the expert said. “As for the TARSIM model, its main services include insurance of plants, greenhouses, life insurance of animals and poultry. I think this model fully suits Azerbaijan.”

Currently, the International Finance Corporation (IFC), together with Azerbaijan’s Ministry of Agriculture and the Financial Market Supervisory Authority, is working on a project to introduce an agricultural insurance system in the country.

Earlier, Aliya Azimova, head of IFC Baku office, told Trend that at the moment, work is underway to improve the legislation in this sphere. Negotiations are also underway to choose an institution that will oversee the agricultural insurance, she noted.

Azimova added that most likely the institution will be created on the basis of an insurance pool and will operate as a fund including insurance companies operating in Azerbaijan (there are 22 of them in the country).

The fund, along with overseeing this sphere, will also develop new insurance services, she noted.

“We are also collecting information for assessment of risks in the sphere of agricultural insurance in order to prepare first insurance services the next year,” she added.

Azimova said the government of Azerbaijan is inclined to use Turkey’s TARSIM model of agricultural insurance. As part of the work on the project, the IFC is looking for the most appropriate options to introduce this model in Azerbaijan, she noted.

Azerbaijan has been cooperating with the IFC since 1995.

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