In June 2019, a law on agricultural insurance was adopted in Azerbaijan, and in August 2019, by the decree of Azerbaijani President Ilham Aliyev, the Agricultural Insurance Fund was established.
As much as 5 million manat ($2.9 million) was allocated to the state budget of the Agricultural Insurance Fund for 2020. It was also decided to carry out its work in stages, because Azerbaijan’s experience in calculating tariffs in the field of agricultural insurance and the assessment of insurance risks and losses aren’t at the needed level.
In the field of crop production, at the initial stage, wheat, barley, corn and potatoes will be insured in order to strengthen food safety and reduce the dependence of the vegetable oil industry on sources of raw material imports, and sugar beets will be insured to support the development of sugar beets in Azerbaijan.
In order to replace imports and strengthen export potential, orange, lemon, tangerine, tea, tobacco, nettle, grapes, hazelnuts and cotton will be insured.
In the field of livestock breeding, in order to increase productivity and production indicators, dairy cows and buffaloes up to seven years old will be insured.
Initially, for products grown in water, fish insurance will be provided in order to increase the share of local production in provision with fish products and stimulate the development of aquaculture.
The Agricultural Insurance Fund, which will take on 50 percent of the risks, will also be involved in the insurance of these products.
Joint insurance of the above mentioned products by the Agricultural Insurance Fund and private insurance companies will reduce investment risks and strengthen the safety of farms, provide conditions for the expansion of production.
($1= 1.7 manat on Dec. 19)