Weekdays of farmers: Agricultural insurance in practice
Today, an increasing number of farmers are thinking about insurance for future crops. Indeed, agricultural insurance is of particular importance for the regions of risky farming and is a real opportunity for agricultural producers to conduct stable activities, forecast incomes in advance.
Last year, agricultural enterprises of Tatarstan because of the death of winter crops received 120 million rubles of compensation. Almost the entire amount falls on JSC “Red East Agro”. We asked the General Director of the agricultural holding Vladimir Pankov to share the experience of crop insurance:
- As you know, the Government of the Russian Federation decided to compensate the costs of replanting winter crops only on insured fields. In Tatarstan, out of 218 thousand ha of dead winter crops, crops on an area of 12.5 thousand ha were insured.
Until 2012, the Russian Federation had a system of supporting agricultural insurance, when a farmer paid an insurance company 100% of the amount of the insurance premium, and after a while the state compensated 50% of the cost. State subsidies were directed to the regions in a targeted manner and their sizes were determined by federal ministries and departments.
Gradually, more and more enterprises began to insure their risks. Due to the fact that this system required the diversion of large financial resources during fieldwork, at the request of agricultural producers, the support system was changed.
Under the new rules (since 2012), agricultural producers paid 50% of the accrued insurance premium, the remaining 50% were transferred by the authorized body of the constituent entity of the Russian Federation to the account of the insurer. But in the year of transition to the new system during the transition period, farmers who paid the insurance by the old scheme (100% of the amount) did not receive compensation. Thus, all agricultural producers, who previously insured risks, considered themselves deceived, not receiving the support promised by the state. For example, the enterprises of the "Krasny Vostok" in just one year lost about 80 million rubles. On a national scale, this caused a big negative, enterprises ceased to insure their risks.
The current system of distribution of state subsidies involves the distribution of state support based on local realities and conditions at the local level, which undoubtedly works more effectively in the form of assistance to the agricultural producer.
We were lucky with the insurance company, which every year fulfills its obligations by paying all risks related to crop production and animal husbandry under insurance policies. Even in the difficult year of 2019, when more than 40% of winter crops died, despite the enormous sums, Talisman Insurance Company paid our holding everything that was supposed to be a penny. Thanks to our state, the Ministry of Agriculture of the Republic of Tatarstan timely issued the emergency, which allowed us to receive compensation from the state.
For reference: the costs of winter crops in 2019 for the holding amounted to 25,000 - 28,000 rubles per 1 ha, depending on the amount of fertilizers and plant protection products applied. With the planned harvest, revenue planned was from 35,000 to 38,000 hectares. Losses from the death of winter crops in terms of the costs of reseeding in amount of 10,200 rubles per 1 ha were reimbursed by IC Talisman and 12,472 rubles per 1 ha were reimbursed by the state, which in total allowed to compensate almost all direct costs.
You can consult on issues of state support in agricultural insurance at the Ministry of Agriculture of the Republic of Tatarstan at the following numbers: (843) 221-76-38, 221-76-88.
You can learn the proposals of insurance companies and measures of state support for agricultural insurance on the official website of the Ministry of Agriculture of the Republic of Tatarstan in the section Resources for sowing 2020. Other useful information for agricultural producers may be found there as well.