Russia (bbabo.net), - Last year, the Russian agricultural insurance market grew by almost one and a half times. True, less than 8% of sown areas are still insured. Starting this year, the situation should change dramatically: in the first days of February, the first insurance contract with state support against natural emergencies (ES) was concluded. Such insurance will cost several times cheaper, it will be much easier to issue it and receive payments.
The first contract under the new agricultural insurance system was concluded by an agricultural enterprise in Primorsky Krai, which insured crops on an area of 1,740 hectares in the amount of 37.6 million rubles, the Ministry of Agriculture reported. Crops include spring wheat and barley, oats, corn, soybeans and potatoes. The law on the new agricultural insurance system came into force on July 1, 2021. But until then, it did not work, because several by-laws were missing.
Last year, we managed to implement a fundamentally new stage in the agricultural insurance system, thanks to which the situation should change dramatically in the next 2-3 years. And this is the main result of 2021, says the President of the National Union of Agricultural Insurers (NUA) Korney Bizhdov.
For ten years, the damage from drought and floods has exceeded 150 billion rubles
Two significant innovations appeared in the law on agricultural insurance in 2021: the first is the new crop insurance program in case of emergencies, the second is the possibility of so-called additional agricultural risk insurance programs at the request of individual regions, the expert explains. Both of these innovations are intended to solve the main problem that existed in agricultural risk insurance: the low insurance coverage of crop risks in Russia, which does not correspond to the scale of risks and losses caused by natural disasters annually.
According to the Ministry of Agriculture, in 2021, a natural emergency regime at the regional level was introduced in 14 regions of Russia. According to the NSA, in 10 years the damage from drought and floods exceeded 154 billion rubles. The maximum damage of 42 billion rubles was noted in 2010, when there was a serious drought.
Crop insurance with state support in case of drought or floods can be used by Russian farmers on a par with the long-standing multi-risk crop insurance system: you can choose either one of the types of insurance, or both at the same time. Under the new program, insurance payments will be made for each hectare of dead crops, provided that an emergency mode is declared in the region due to natural hazards and the death of crops is established. Farmers will be able to reimburse the direct costs of cultivating fields. At the same time, insurance under the program in case of emergencies will be carried out according to simplified and accelerated procedures, the cost of the policy will be reduced by 4-6 times compared to the multi-risk program, and the amount of subsidies will be increased to 80%. In 2022, the Ministry of Agriculture allocated 5.3 billion rubles for agricultural insurance subsidies.
“Agrarians now have access to easy-to-understand and inexpensive policies that protect against damage within the limits of farm costs for seeds, fuels and lubricants, fertilizers - that is, the cost of cultivating crops. The main advantage for both the agrarian and the state is that such a mechanism assumes that if The commission of the constituent entity of the Russian Federation for assessing damage from emergencies confirmed the fact of the destruction of crops and the farm has an insurance contract against emergencies, then the payment is guaranteed. At the same time, the insurance company is obliged to make it in a short time with a minimum set of documents," says Bizhdov.
This does not mean that, apart from the new emergency protection system, nothing else happened last year. According to the NSA, in 2021 the agricultural insurance market with state support in Russia amounted to about 7.7 billion rubles, while in 2020 it was 6.6 billion rubles. Of these 7.7 billion rubles, 5.5 billion rubles were for insurance of crop production risks - harvest and planting, 2.2 billion rubles - for insurance of farm animals, and 0.1 billion rubles - for insurance of commercial aquaculture. The largest increase was provided by state-supported livestock insurance, which grew by 42% over the year. Over the past three years, the insured livestock has doubled: from 4.5 million conditional heads of farm animals in 2018 to 10.6 million conditional heads in 2021. So investors tried to protect animals from diseases: last year bird flu and African swine fever raged around the world.
But more than half of all insurance fees are now accounted for by crop production. The premium accrued under crop insurance contracts concluded in 2021 reached 5.5 billion rubles. True, the increase last year was only 9%. By the end of 2021, farmers have purchased insurance policies that provide protection for 5.8 million hectares. And this is just over 7.5% of the total sown area.
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