Producers that insured crops will receive increased subsidies
Agricultural producers who insure the risks of losing their grain harvest will receive increased subsidies for production and sales compared to uninsured farmers - this procedure has been introduced since 2023 by the Russian Government.
According to a government decree issued in November, from 2023, farmers claiming to be reimbursed from the state budget for part of their costs for the production and sale of grain crops will have to present an insurance contract for these crops, concluded as part of the state-supported agricultural insurance system. If the crop was not insured, then when calculating this subsidy, a 0.7 reduction factor will be applied, and from 2024 - 0.5.
A budget subsidy to compensate for part of the costs of farmers for the production and sale of grain crops is provided to farms annually based on a ton of sold products of their production. The state reimburses up to 50% of the corresponding costs of agricultural producers.
“Thus, from next year, the responsibility of both the agricultural insurance system and regional authorities for organizing grain insurance will increase. The state should be provided with the protection of its interests when subsidizing agricultural production, and farmers should be able to quickly conclude an insurance contract. Today, insurance is available to farmers in every region where crop production is developing,” NSA President Korney Bizhdov comments.
The new procedure for obtaining subsidies for grain will also affect the harvest of winter crops, which are sown and insured in the fall of 2022. NSA and insurance companies are already advising the regions on the significantly increased requests of farmers for winter crop insurance. The expenses of farmers for agricultural insurance with state support are also subsidized by the state. When choosing an insurance program, farmers can proceed from their needs for insurance protection and financial capabilities.