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Farmers involved in modern agri-insurance
15:44 02/15/10

November 10 in Kyiv opened another exhibition "Farmer of Ukraine" is the thirteenth. Visitors could not only meet with exhibition stands, but also take part in numerous events.

During the annual farm exhibition traditionally held scientific workshops. One of the key measures of this class was a seminar on "How to increase profit farm field? Successful practice of management. "

In fact, this question is not rhetorical. It can enrich the field, and sometimes the farmer, who put all their strength and considerable money to grow crops, due to unfavorable weather conditions may at one moment to lose not only income, but generally left without livelihoods. Especially if he took a bank loan.

This was the case with many farmers this year. He will remember unprecedented frosty winter and too hot in summer.

From natural disasters that occurred this year, the economy suffered and the first vice-president of the Association of Farmers and Private Landowners of Ukraine Vitaliy city. Located in the Kharkiv region, it suffered losses of 5 million USD.

"It processed about 2 hectares of land - told the seminar Vitaly Lions. - Winter wheat sown on the area of ​​900 hectares, and gathered the harvest of only one hundred. Weather conditions in the region have developed extremely unfavorable. If you usually gathers in Kharkiv region 2-2.5 million tons of early grain crops, this year - only 480 thousand tons. In the previous two years, the yield was excellent, so I did not insured crops. "

Among the participants was a lot of farmers who, like Vitaly city, until recently, did not provide proper attention to agri-insurance. And just as Vitaly Lions were left with losses. That is why the organizers of the workshop gathered a special session devoted to issues of agri-insurance. It has an expert of the International Finance Corporation (IFC) «Development of agri-insurance in Ukraine" Roman Shynkarenko.

It is good that the workshop organizers invited the independent expert is a serious international structure, which is the third year are actively working to agri-insurance in Ukraine earned in full force and became an effective instrument of risk management for farmers.

Roman Shynkarenko gave an objective assessment of the current state of agri-insurance and outlined the prospects for its development. According to him, the fall of 2009 was signed 467 contracts of insurance winter crops. They were insured by 211.5 thousand hectares of crops. Indeed it is - a drop in the sea. Indeed, in the Ukraine winter cereals and canola (namely in these cultures were concluded mainly insurance contracts) are sown on the area of ​​the 7.6 million hectares. Thus, the insured was less than 3% of winter crops.

Farmers Insurance paid for 14.4 million of premiums. The total sum insured (the amount that insurance companies had to pay if all insured crops were lost) was 268 million. In fact, killed about 10% of insured winter. Therefore, the sum of payments for concluded contracts totaled nearly 26.5 million.

A lot of it or too little? Given that the insurance was paid 14.4 million USD, the amount of payments exceeds almost twice the amount of premiums! This means that insurance companies this year also have to calculate their losses. Nevertheless, understanding the importance of agro-insurance, they are ready to continue to engage in this business. Especially if the state restores support agri-insurance program, as is done in all countries where really care about stable income farmers.

But not everything depends on the intentions of insurers. According to Roman Shynkarenko: "Admittedly, agri-insurance culture in Ukraine is not yet formed. Not that compulsory insurance, which in Soviet times was carried out under pain of losing party cards, and voluntary, which has become a mandatory attribute of the agricultural business. And that is intended to force majeure to save him. "

And there are other reasons that make silhospnykiv mention agri-insurance in the least. One of them - contracts that are offered insurers until recently, at fault due to excessive complexity. Their texts are available unless the lawyers of the highest qualifications, and in no way farmers.

Contracts have been developed taking into account the interests of insurers, but not farmers. Because developed ... insurers. And it appears as if in that prypovidtsi - "everyone has something that protects."

The agreement had to provide a large number of documents. Documents in the farmers, of course, is but the time that they gather, no. And it turns out that Ukraine, which found itself among agricultural countries and which has the most serious intentions of becoming a global breadbasket, has not managed to create a comfortable environment for a sustainable and dynamic development of the agricultural and insurance markets.

The situation should soon change for the better. At least, all the prerequisites for that. More recently, project IFC «Development of agri-insurance in Ukraine" has developed a new insurance product "insurance crop and future crops of winter cereals (winter wheat, barley, rye, triticale) for the whole period of cultivation."

The new insurance product, said Roman Shynkarenko, a joint work of representatives of insurance companies and farmers. Direct involvement in his appearance and has the Ministry of Agrarian Policy of Ukraine. "During the development of a new insurance product taken into account best practices, including the U.S. and Canada as well - especially Ukrainian agricultural production."

The new insurance product has several advantages. Suffice it to say that it protects winter crops throughout the growing period - from sowing to harvesting. And that's not all. New insurance product protects crops against all risks, rather than selectively. Commonly, this is called "multyryzykove insurance." Now our farmers are involved in this innovation, which in the civilized world has long been commonplace.

What gives? And the fact that farmers no longer need to prove that his crops were lost due to one or the other specifically mentioned in the agreement risk. Will be the most important fact: crops were lost - get paid!

Rates of new insurance product designed using special mathematical techniques called actuarial calculations. They rely on the vast array of statistical data collected over the decades - from 1998 till 2008. This approach is also used in Ukraine for the first time.

What else is important - evaluation of losses is carried out by standard methods. And it, figuratively speaking, not around and not overtake. It is equally true for both insurers and farmers. Therefore, fraud is excluded. At least, made all the prerequisites in order to reduce it to a minimum.

Another important feature of the new product is its flexibility. The farmer himself can choose at what price to insure their future harvest and what level of coverage. If you choose a lower cost and low coverage, you pay a smaller amount. Accordingly, receive less money if the insured event. And if you choose a higher price unit and more coverage, you can get more powerful coverage. But he will cost more.

 

Maxim NAZARENKO,

National Press Club "Ukrainian Perspective"

See also
11/05/11 New insurance products developed by experts from IFC, will help improve the quality of agricultural insurance
10/22/11 Created an Agricultural Insurance Bureau - an organization designed to bring local farmers insurance at a new level
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