Crop insurance becomes more affordable

Ukraine’s Cabinet of Ministers has adopted the resolution «On amendments to Procedure and conditions for provision of state support to agricultural producers in insuring crops by reducing insurance payments (premiums).» The measure simplifies the procedure and conditions for providing state support for agricultural insurance.

Agricultural experts say the new changes will eliminate the need for mandatory applications of crop insurance, which is subsidized by state.

The resolution deletes requirements for mandatory meetings of regional committees at least twice a month. Now the committee will hold meetings as the farmers applications come in.

The government has also accommodated farmers by expanding the list of insurance risks. For example, now crops may be insured against fire, the Information-analytical Bulletin of the Cabinet of Ministers of Ukraine says.

The resolution will also simplify procedures for paperwork approval. From now on, standard insurance contracts will be used. Also, the start and end dates for receiving applications and documents for partial reimbursement of insurance premiums by regional committees will be established legislatively.

Experts say that due to government support, agricultural insurance will become more affordable for farmers. Receiving partial compensation from the state (subsidizing insurance premiums), farmers will be able to avail themselves on the opportunity to receive insurance money, as well as indemnity, in case of manufacturer’s loss. The main advantage of the law for farmers, however, is the financial capability to transfer certain risks to reliable players of the insurance market through a partial state compensation under the state regulatory supervision.

Experts say the adoption of new legislative instruments will provide an opportunity to bring the mechanism of state support for agricultural producers in compliance with the European standards.