Insurers - government support for agricultural insurance

The insurance company Bashak Inam made ??a proposal to change the payout structure and the radical changes under crop insurance.

According to the Head of Business Development of the structure Hikmet Allahverdi, today the field is costly for insurers - from January to November, all the companies collected premiums 669.77 thousand with payments 531.47 thousand manats (79.4 %) that market - not the best indicator.

Calculations have shown that in Azerbaijan the main producers of agricultural products, including meat and dairy products , are households with low productivity . The share of large private owners in this segment is small (only 5 % interest) as a result of the collapse of the collective and state farms , although in the mid -1990s , they accounted for 32.7% . Today, the average farmer-treated privateer land area - 10.2 hectares. For comparison - U.S. farms are operated on 180 ha, in the Czech Republic - on 84 ha, in the UK - on 55 hectares. Even the Spaniards with a relatively high density of the villagers for Europe, treat an average of 22 hectares of land.

In Azerbaijan, the largest owners and management are deprived about half of land. If small and medium private owners in 2000 had over 9.2 hectares from 2009 to this day, they accounted for 10.2 hectares. In large farms ratio otherwise - was 155.4, was 76.6 hectares. Use a different picture allotments and distribution of profits . Small private traders do not have the ability to apply advanced technology, enjoy the benefits of leasing equipment and storage because of high prices for services. They also can not due to lack of vehicles and high prices to transport ready to implement crop in the capital (where the greatest demand ) markets , and forced to sell perishable products on site in just a pittance.

In Azerbaijan, low level of accounting and preventive measures in the agricultural business - expert believes . According to him , it is the insurance companies with the assistance of the government will be able to settle in this area. If the solution will take the insurers , they are properly explain to the villagers the causes and trends of natural disasters , which will calculate the optimal rate risk. Increase the level of professionalism in such a promising sector of the local economy , and less load will fall on the budget allocated annually hundreds of millions to overcome the effects of rain , hail, floods and landslides.

If insurers are interested in agricultural insurance , while banks and non-bank structure will be willing to lend to farmers (not a secret that the National Fund for Entrepreneurship and local banks prefer to deposit in the capital , but not provincial land). Also today, the farmers in the event of failure at harvest faced with the threat of loss of the mortgaged property , when an established insurance system they will share the risk with the insurer having a long-term contract with peasants . In this case, the rise and bank lending - Local farmers need 1 billion manats of total subsidies , but because of the conditional (almost virtual ) Secured Loans receive only 150-200 million per year, which allows you to " fill holes ", but not furthermore . According to the Central Bank of the Republic of Azerbaijan , the share of problem loans in the total portfolio of 43 banks amounted to 5.4% , or 795 million manat , with most of the non-payment fell on the agricultural sector. If we look at trends , we see that the low security of agricultural loans , increase in problem loans and very low liquidity of the mortgaged property in the regions determine consistently high lending rates.

The insurance company Bashak Inam, referring to the government deems it necessary to adopt a special bill on amendments to the conditions of agricultural insurance. Among the proposals - the introduction of preferential rules of security in areas of risky agriculture, supplement the list of natural phenomena, which is harmful to agricultural production. Should increase insurance amounts paid in crop insurance to at least 70% from the budget. It is proposed to tighten liability insurers evading payments in this strategic segment, up to revocation of licenses. At the heart of the agricultural insurance scheme to its development should be based on the principle of the system of compulsory liability insurance (CTP).

According to specialists , the events of 2010 in the areas along the rivers Kur and Araz when affected tens of thousands of hectares of land , tens of thousands of households suffered proven damages of 350 million manat , showed that we must act quickly , taking the corresponding bill .

In Azerbaijan, there is a law "On stimulation of agricultural insurance ", in early March of this year, the profile ministry submitted to the government and Parliament proposals for the inclusion of agriculture insurance in the "Law on Compulsory Insurance ." The problem on the agenda of all the 22nd anniversary of the state independence, the last time the government in October 2010 established a working group to develop recommendations, but the public does not know about the results of its activities. - 17D-