Domestic market taking over world experience of agricultural insurance
2011-03-24 09:46:34
On the agricultural insurance market of Ukraine, standard products appeared for insurance of 8 crops over the complete cycle of production: winter grains (wheat, rye, triticale, barley), rape, corn, sunflower and sugar beet. They have been developed within the framework of the International Finance Corporation program for the development of agricultural insurance in Ukraine in cooperation with the market participants concerned.
As noted by the program manager, Harry Roche, the products have been developed based on best practices in the U.S. and Canada, taking into account the peculiarities of Ukraine. They provide for a full set of instruments, techniques and calculations for insurance (crop inspection, underwriting, assessment of damages and the amount of insurance reimbursement, etc.).
The price of insurance is based on a large array of statistical data from 1980 for each region, district and household.
This approach is used in Ukraine for the first time. Insurance companies that will offer standard products have committed themselves to adhere to these standards (including standard contracts).
Roche noted that the agricultural sector looks as taking the lead in Ukraine, and thus is in need of investment, and agricultural insurance helps provide access to resources through insurance of future crops.
Ukraine has already created an Agricultural Insurance Office; a pilot project has been recently completed with Raiffeisen Bank Aval based on the standard product, insurance of winter wheat for the entire growing cycle. Now the bank is launching throughout Ukraine a new program that includes all the standard products developed under the IFC.
It is also planned to attract other banks and insurance companies in order to provide access to credits for as many Ukrainian farmers as possible.
According to Roche, for systematic development of agricultural insurance in Ukraine, it is necessary to urgently approve an appropriate legislative framework and a concept of agricultural insurance.
Now the government has two concepts developed by the Ministry of Agricultural Policy and Food and the Financial Services Commission. They provide for different models.