Challenges in Insuring Livestock in Azerbaijan: A Farmer's Dilemma

Azerbaijan's efforts to encourage farmers to insure their livestock face significant challenges despite state incentives. The Azerbaijani government has offered reduced insurance premiums and subsidies covering 50% of the insurance costs to promote agricultural insurance. However, many farmers remain hesitant to participate in these programs.

The reluctance stems from several factors, primarily financial concerns. Nijat Aliyev, a farmer from the Beylagan region, highlighted the costs involved, noting that insuring 50 sheep costs 450 Manats and 12 cows require 400 Manats, varying based on the animal's value. Farmers like Aliyev express skepticism about the return on investment, fearing that the insurance may not adequately cover losses in case of an animal's death.

Another major deterrent is the perceived complexity in claiming insurance benefits. Farmers argue that proving the circumstances of an animal's death to meet insurance conditions is challenging and often leads to disputes with insurance companies. This skepticism has led many farmers to view animal insurance as a risky investment, akin to "throwing money into the air."

Despite these challenges, the Agro Insurance Fund assures farmers of comprehensive coverage. The foundation told Turan that insurance protects against a range of risks, including infectious diseases, natural disasters, poisoning, animal attacks and even theft. The Fund emphasizes that payouts are made according to established rules, covering veterinary care, accidents during transportation, and other unforeseen incidents.

The Azerbaijani government's subsidy of 50% of insurance premiums aims to make insurance more accessible to farmers. For instance, insuring cattle valued at 1,000 Manats costs farmers between 26-41 Manats, significantly reducing financial barriers. However, agriculture expert Vahid Maharramov, in an interview with Radio Azadlig, emphasizes the importance of independent verification of insurance claims to ensure transparency and fairness, suggesting that impartial experts be involved in the assessment of insurance claims.

Maharramov also points out broader industry dynamics, noting that some insurance companies are linked to oligarchs and officials who may prioritize profit over fair claims settlement. This perception further fuels farmers' reluctance towards insurance, despite the potential benefits of financial protection.