Georgian farmers are increasingly using the state agricultural insurance program


Georgian farmers are increasingly using the state agricultural insurance program

02/04/2020

Last year, 16,400 insurance policies were issued under the agricultural insurance program in Georgia

The number of beneficiaries of the state agricultural insurance program in 2019, compared to the previous year, increased by 31%, said Levan Davitashvili, Minister of Environment and Agriculture of Georgia.

According to the minister, last year 16,400 insurance policies were issued under the agricultural insurance program. The total amount of state subsidy under the program amounted to 5 million 846 thousand lari ($ 2 million 029.9 thousand at the current exchange rate). As compensation for losses, farmers were paid 913 thousand lari ($ 317.0 thousand).

“Until 2014, there was no mechanism in Georgia through which a farmer could protect his crop from climate risks. With the advent of the agricultural insurance program, insurance has become available to those farmers who have a small farm and who most require state support. The agricultural insurance program is a tool through which agriculture is becoming more predictable and investing in the industry of stakeholders is more attractive, ”he said.

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As Levan Davitashvili emphasized, “the state, together with the insurance industry, is working to create a long-term strategy for the agricultural insurance program so that this program becomes systemic”.

The state agricultural insurance program (the “Agricultural Insurance” project) was included in the “Unified Agricultural Project” implemented by the Rural and Agricultural Development Agency in 2014 and covers the following insurance risks: hail, floods, hurricane and autumn frosts (in the case of citrus fruits). The issuance of insurance policies is carried out by insurance companies participating in the program, while 70% of the cost of policies (in the case of grapes – 50%) is covered by the state, and the rest is by the farms themselves. Any individual or legal entity who has decided to insure the crop on its agricultural plot with an area of ​​up to 5 hectares (in the case of grain crops – no more than 30 hectares) can become a beneficiary of the program. At the same time, this site must be registered with the National Agency for Public Registry, as well as in a special register maintained by the Agency for Rural and Agricultural Development under the project “Farm / Farmer Registration Project”. The area limitation does not apply to agricultural cooperatives, however, the upper limit of state co-financing of the insurance premium has been set for them – no more than 50 thousand lari ($ 17.4 thousand) per 1 insured.

In 2020, the state budget of Georgia provides for 9 million lari ($ 3.1 million) for the implementation of the agricultural insurance program, that is, 1 million lari ($ 0.3 million) more than a year earlier.

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