Armenia’s Farmers to be Provided Insurance

Agriculture Monitor Worldwide
 Friday


Armenia's Farmers to be Provided Insurance



The Armenian government announced on Tuesday plans to start gradually
introducing next year a national system of agricultural insurance
increasingly seen as a vital necessity for struggling farmers across
the country.

Thousands of low-income villagers lose their crops each year due to
hailstorms, droughts and other natural disasters. They receive little
compensation from the cash-strapped government.

According to Deputy Agriculture Minister Armen Harutiunyan, the
government will launch at the end of 2018 a pilot project that will
insure some farmers growing fruits, vegetables or cereals against one
or two types of risks. The government will subsidize insurance
premiums with a special 10 million-euro ($11.8 million) fund set up
for that purpose, he said.

Germanys state-owned development bank KfW will contribute half of that
money through a grant allocated to the Armenian Finance Ministry. The
two sides signed a relevant agreement in Yerevan on Monday at a
ceremony attended by Prime Minister Karen Karapetyan.

During the first year the [agricultural insurance] bureau will select
the main risks and the main crops for the pilot project, Harutiunyan
told a news conference. In the first phase there will be [insurance
coverage for] maybe one or two risks and several crops: vegetables or
cereals. We will test the system within that framework and see which
model works best.

Harutiunyan said that the government is inclined to prioritize
hailstorms as the number one natural risk. He also announced that the
Central Bank of Armenia, which is also involved in the effort, is
already working with private insurance firms. The latter are
interested in the scheme despite the high risks involved, added the
official.

Harutiunyan could not say which rural areas will be first covered by
the agricultural insurance program and whether it will be mandatory or
optional for local farmers. The insurance bureau will work out these
and other details in the coming months, he explained.

Some farmers cautiously welcomed the government plans while warning
that agricultural insurance will not work if it places a heavy
financial burden on them. They also said that it must not be
mandatory.

It all depends on the amount of premiums, Haykaz Asatryan, a grape
farmer from the southeastern Vayots Dzor province, told RFE/RLs
Armenian service (Azatutyun.am). Right now villagers finance 90
percent of their agricultural work with loans [extended by commercial
banks.] If they had cash they would already be able to buy insurance.
2017 Global Data Point.