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Agricultural crop insurance with government support. Agricultural insurance

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agricultural damage insurance

Introduction

2. Problems of agricultural insurance

Conclusion

Introduction

In this course work we will talk on the topic: “Agricultural insurance”. Nowadays, this topic is relevant, since agricultural insurance has recently appeared on the insurance market in Russia.

The process of reproduction represents the interaction and confrontation of various forces of both a natural and social nature.

Along with the inextricable unity between man and nature, there is also a contradiction between them, which is expressed in the continuous struggle of man with nature.

Contradictions between man and nature, on the one hand, and social contradictions, on the other, together create conditions for the manifestation of various negative consequences that are random in nature.

There is a risk inherent in various stages of social reproduction and any socio-economic relations. All these facts contributed to the emergence and development of insurance relations throughout the world.

The centuries-old experience of mankind shows that the process of social production is interrupted or disrupted as a result of the destructive effects of natural forces or the negative consequences of other emergency situations. In this situation, there is an objectively risky nature, and the risk factor causes the need for insurance. Thanks to insurance, any type of human activity is protected from accidents. Gaining confidence that the means of production, products, and financial resources are financially protected from accidents, the entrepreneur has the opportunity to focus his attention on problems directly related to production, commercial and financial activities.

From the above we can conclude that risk serves as a prerequisite for the emergence of insurance relations. The uniqueness of these relations as an economic category lies in the fact that insurance is a category that is in a subordinate relationship with the category of finance.

Also, let's delve a little deeper into the history of insurance development. Until the 18th century Insurance has developed slowly; foreign insurance companies are mainly represented. In 1786, Catherine II issued a manifesto banning insurance from foreigners. In 1822 the Company was closed. The essence of insurance was the conclusion of agreements on the dispersal of the risk of possible damage between interested parties. A feature of these relations was the absence of insurance premiums; compensation for losses was carried out by distributing the amount of damage incurred by one of the parties to the agreement to all its members. Subsequently, insurance relations begin to be built on the basis of regular contributions from the parties to the agreement, which leads to the preliminary accumulation of a monetary fund, which is used to compensate for the damage that has occurred. Insurance coverage was provided through professional and corporate organizations that protected the property interests of their members. These insurance protection systems existed in parallel for a long time. Today, in the conditions of modern market competition, insurance is one of the most profitable activities. The number of insurance companies and clients of these companies is growing. The purpose of this work is to analyze the agricultural insurance market; we will also consider the problems and prospects of agricultural insurance.

1. General concepts and functions of insurance

“Insurance acts as a set of special closed redistribution relations between its participants regarding the formation, through cash contributions, of a target insurance fund intended to compensate for possible emergency or other damage to enterprises and organizations or to provide monetary assistance to citizens.”

There are two parties involved in insurance, the insurer and the policyholder.

“The insurer is a specialized organization that produces insurance and assumes obligations to compensate for damage or pay the insured amount.”

“The policyholder is an individual or legal entity who pays cash (insurance) premiums and has the right, by law or on the basis of a contract, to receive a sum of money upon the occurrence of an insured event.

“The insured amount is the amount of money for which property, health, and life are actually insured.”

The economic essence of insurance corresponds to its functions, expressing the social purposes of insurance. They allow us to highlight the features of insurance as a link in the financial system.

The main one is the “Risk function”, since the insurance risk as the probability of damage is directly related to the main purpose of insurance to provide financial assistance to injured clients. It is within the framework of the risk function that the redistribution of monetary value occurs among insurance participants in connection with the consequences of random insurance events.

The next “Preventive function” is aimed at financing from the insurance fund measures to reduce the insurance risk.

The “control function” of insurance lies in the strictly targeted formation and use of insurance fund funds. This function follows from the specific functions indicated above and manifests itself simultaneously with them in specific insurance relations, in the conditions of insurance.

1.1 Essence and form of agricultural insurance

Agriculture is one of the vitally important sectors of social production and is directly related to meeting the primary material needs of people.

Every year, agricultural producers suffer colossal losses from natural disasters: hail, hurricane winds, abnormal temperature fluctuations, heavy rains, spring floods and other natural disasters, which, according to the approved criteria, are classified as emergencies. Damage caused to agricultural production significantly reduces its sustainability, deprives it of significant reserves for its financial stabilization, and also negatively affects rural development as a whole. Therefore, compared to other objects of the national economy, agriculture is in greater need of protection, which is carried out through insurance.

Agricultural insurance includes:

1.Insurance of agricultural crops;

2. Perennial plantings;

3. Number of animals;

4.Buildings, structures, machines, inventory and equipment of agricultural enterprises and peasant farms. Agricultural insurance is also carried out with state support - insurance of property interests associated with the risk of loss (destruction) of an agricultural crop, loss (destruction) of perennial plantings, loss (death) of farm animals, which is carried out in accordance with the Federal Law of July 25, 2011 No. 260 - Federal Law “On state support in the field of agricultural insurance” and other Federal laws.

Currently, insurance is a necessary feature of a civilized, modern and efficient business system.

Recently, much attention has been paid in the media to the issues of agricultural insurance, but behind this capacious concept there is only crop insurance. Almost nothing is said about insurance of animals, movable and immovable property. Government officials and departments proposing a new model of agricultural insurance also, as a rule, focus only on crop insurance, forgetting that other types of insurance are relevant and in demand in the agro-industrial complex and require both legislative regulation and government support. In addition, the current one-sided understanding of agricultural insurance is reinforced by the current legislative framework, which concerns only the procedure for insuring crops and subsidizing insurance premiums from the federal budget, it does not affect anything else.

1.2 Insurance of agricultural crops and perennial plants

When insuring agricultural crops, losses from a decrease in the amount of main products received compared to the average harvest over the last 5 years are compensated. The amount of damage is calculated based on the purchase (contractual, market) price established in the insurance contract. When reseeding or reseeding dead crops, the amount of damage is determined taking into account the additional costs associated with this and the cost of the harvest of newly sown crops.

The harvest of agricultural crops and perennial plantings, at the request of the policyholder, can be insured against risks in the event of complete loss of crops or plantings on all or part of the crop area. In this case, the amount of damage is determined based on the insured amount per 1 hectare and the size of the area of crops lost by sowing.

Crop insurance contracts are concluded no later than the beginning of sowing (planting). Insurance for crops grown in protected soil is carried out before the start of the production cycle, and for the harvest of perennial plantings and the plantings themselves before they go into winter.

Insurance premiums are calculated for each crop by multiplying the cost of the crop from the entire planting area by the tariff rate. Tariff rates for crops are different and differentiated by region depending on the losses caused by natural disasters.

Insurance premiums under the agreement can be paid in a lump sum in the amount of the annual premium or in installments, and the last installment must be paid no later than the calendar deadline established for accepting insurance of agricultural crops under this agreement.

In some cases, policyholders who pay insurance premiums in a lump sum, when concluding an insurance contract, may have the right to a discount of up to 10% of the amount of the insurance premium, subject to the agreement being concluded before April 30, before autumn crops, May 31 for spring crops and, accordingly, until July 31 for plantations.

The conclusion of an insurance contract is confirmed by the issuance of a policy in the established form to the policyholder.

1.3 Farm animal insurance

This type of insurance is interesting both for agricultural enterprises, cooperatives, farms, and for individuals.

Objects of insurance:

Cattle

Fur animals

Rabbits

Bee colonies (with hives)

Decorative

Exotic and other animals.

Sick, malnourished animals, those in prenatal and postnatal laying conditions, and also when the last test of animals for brucellosis, tuberculosis, leukemia and other infectious diseases revealed a positive reaction are not accepted for insurance. Insurance risks are:

Death of animals due to fire, natural disaster (flood, landslide, lightning, storm, hurricane, hail, earthquake and other natural disasters); accidents (electric shock, sun or heat stroke, freezing, suffocation, herbal poisoning, animal attacks, snake bites or poisonous insects, drowning, being hit by a vehicle, falling into a crevice), from other injuries;

Death of animals from diseases;

Forced slaughter of animals (by order of a veterinary service specialist);

Loss and death of animals due to illegal actions of third parties: burglary, open theft (robbery), attack, as well as deliberate destruction by arson or other means.

Insurance is also carried out in case of forced slaughter (destruction) of animals, if it is carried out by order of a veterinary service specialist for reasons provided for by the terms of insurance or in connection with measures to combat infectious diseases, epizootics or an incurable disease that precludes the possibility of further use of the animal.

Animals are accepted for insurance in the amount declared by the policyholder, but within the limits of their actual value based on prevailing market prices on the day the contract is concluded.

An animal insurance contract is concluded after their preliminary inspection, subject to the insurance of all animals of a given type and age group owned by an agricultural producer.

An insurance contract can be concluded both for the full scope of liability and for individual insurance risks. At the same time, tariff rates are differentiated.

For animals received by an agricultural producer during the period of validity of the contract, insurance premiums are not charged (unless otherwise provided by the contract). In the event of the death of these animals, insurance compensation is paid in the amount of the insured amount stipulated by the insurance contract.

When an insured event occurs, the policyholder is obliged to report it to the insurer within 24 hours or another period established by the contract from the date of death, forced slaughter or destruction of the insured animals due to fire, natural disasters and accidents. After receiving an application for an insured event, the insurer is obliged to draw up an insurance act in the prescribed form within three days.

In the event of the death or death of an animal, the damage is considered to be its actual value on the day of the insured event.

In case of forced slaughter of an animal, damage is considered to be the difference between its actual value on the day of the insured event and the value received from the sale of edible meat.

If the actual value of the animal on the day of the insured event exceeds the insured amount established by the insurance contract, then the amount of insurance compensation is reduced in proportion to the ratio of the insured amount to the actual value of the animals.

2. Insurance problems

Agricultural insurance is a high-risk type of insurance, since it directly depends on weather and climatic conditions. Direct dependence on climatic conditions is a characteristic feature of agricultural production. Every year, agriculture suffers losses as a result of natural disasters; regularly recurring droughts cause particular harm; the damage can be enormous and can put farms on the brink of bankruptcy, which is why it is so important to increase the role of insurance in agriculture. A special place in agricultural insurance is occupied by crop insurance . In this direction, over the past ten years, a number of regulations have been adopted regulating the agricultural insurance system.

Rosstat calculated the grain harvest in Russia in 2010: it amounted to 60.9 million tons in net weight, which is 37.3% less than the level of 2009, when 97.1 million were collected, but slightly higher than the data announced by the authorities who estimated the harvest at 60.3-60.5 million tons.

This summer, dry conditions developed in the Volga, Ural, and parts of the Southern and Central federal districts. The death of agricultural crops occurred on an area of more than 13.3 million hectares, which is 30% of the area sown with agricultural crops in the affected regions, 17% of the total sown area of the Russian Federation or 30% of the entire sown area of grain crops in the country.

Earlier, representatives of the Ministry of Agriculture and the government of the Russian Federation reported two figures for the grain harvest this year - 60.3 and 60.5 million tons.

For comparison: the grain harvest in Russia in 2007 amounted to 81.5 million tons, in 2008 - 108.2 million tons. Farms of all categories threshed 5.3 million tons of sunflower in 2010, which is 17.3% less than in 2009. The sugar beet harvest decreased by 10.7% - to 22.2 million tons.

As of December 1, 2010, agricultural organizations had sown winter crops for next year's harvest on an area of 11.1 million hectares, which is 17.8% less than a year ago. The plow is plowed on

21.2 million hectares versus 20.8 million hectares on the same date in 2009.

Solving this problem with the help of crop insurance is an effective economic tool that ensures stabilization of the financial situation of the agricultural producer.

The insured are: agricultural enterprises (agricultural organizations and associations, cooperative, rental and farm enterprises and others).

Insurance applies to all types of agricultural crops: winter and spring crops, grains and legumes, industrial, vegetable, melon, fodder orchards, berry gardens, vineyards, etc., and is carried out in a mandatory form.

The object of insurance is the main cultural products. For crops that produce two or three types of main products, all of them are considered insured.

The insured amount of the crop is based on the average yield over 5 years per 1 hectare and in current prices.

In agricultural enterprises, the level of compensation for losses is determined as a percentage.

Insured events are considered to be the death or reduction of harvest as a result of drought, lack of heat, excessive moisture, frost, freezing, hail, fire, hurricane, disease, plant pests and other meteorological and natural conditions unusual for the area.

Agricultural crop insurance begins on the day the crop is planted and ends on the day the crop is harvested.

The amount of insurance payments of an agricultural enterprise is determined based on the average insured yield of each crop, the price of its products, the area of sowing (planting) and tariffs.

The average yield is determined for all types of agricultural crops and for each type of their main product. When calculating the average yield, all years of crop sowing are taken into account, including periods in which the complete destruction of a particular crop occurred. If in some years the crop was not grown, then these years are excluded from the calculation of the average yield, and it is determined as the arithmetic average for the remaining 4 or 3 years.

The full cost of the crop is calculated based on the cost of the average yield per 1 hectare and the area sown with the crop. The cost of the harvest is accepted in the amount determined by the contract, but not less than 50 percent of its value.

The damage to be compensated is determined based on the insurance conditions, the main one of which is the level of the average harvest as an object of insurance liability. For crop insurance, the average yield for the previous 5 years is generally accepted. The principle of calculating damage is to compare the cost of the insured and the actual crop of the current year after the occurrence of the insured event.

The average yield is determined for the entire area sown (planted) of an agricultural crop for the harvest of a given year, i.e. including the one where damage and death occurred and no cleanup was carried out.

Some crops provide 2-3 types of main products (flax, hemp, seeded grass) or are grown for various purposes (for example, winter crops for grain and green fodder). To calculate damage, all types of products received are taken into account.

The conditions for insurance of agricultural crops currently provide, as a rule, compensation for quantitative losses from reduction (destruction) of the crop, and losses from deterioration in product quality are not subject to liability. Therefore, when calculating damage, both the insured crop and that received in the current year are valued at the same prices. Usually these are the prices prevailing at the time of concluding the insurance contract and calculating insurance payments.

The methodology for calculating damage can be represented by mathematical formulas. Their expression varies depending on two factors: whether there was a complete loss of the crop or its decline; how the damaged crop was used - to obtain the planned main product or for other purposes.

Calculation of damage in case of complete loss of a crop crop over the entire area is carried out using the following formula:

where: Y - damage calculated on the entire sowing (planting) area;

C is the average cost of the insured crop per 1 hectare;

P is the area sown for the current year's harvest.

In cases where there has been a decrease in the average yield (although there may be death in individual areas), the formula for calculating damage is expressed as follows:

U=(C - C*V/P)*P

where: B is the gross harvest of the main crop products in the current year;

C is the purchase price of 1 cent of the main products of a given crop.

In case of reseeding, the damage is determined by the formula:

Control = (U + R) - Tsu

Y - damage calculated for the entire sowing (planting) area;

P is the amount of reseeding consumption;

Tsu is the cost of the harvest of newly sown crops.

The amount of damage in the event of complete loss of plantings is determined by type (species groups) of plantings, depending on the procedure for their recording on the farm. The amount of damage includes only lost plants in a given area of the garden. Damage is considered to be the book value of lost plantings minus depreciation. Insurance compensation is calculated in the amount of damage to which the crops and plantings were insured, but not less than 50 percent of the amount of damage.

Insurance compensation for crop shortages is paid within 10 days after drawing up a report on the loss (damage) of the crop and calculating the damage and insurance compensation. For lost perennial plantings, damage is determined and insurance compensation is paid within 10 days after uprooting trees or cutting (trimming) plantings for the purpose of their restoration and calculation of insurance compensation.

2.1 Prospects for the development of the agricultural insurance market

Currently, agriculture is provided with insurance coverage of no more than 15%. The lack of a unified methodological basis for insurance and reinsurance in agricultural insurance, as well as an adequate regulatory framework, hinder the development of this insurance industry.

Despite the expansion of the insurance services market as a whole, the strengthening of the insurance legislative framework, and the application of new insurance programs, the agricultural insurance market is problematic. The effectiveness of insurance with state support remains controversial; there is no clear opinion on the use of compulsory or voluntary insurance in agriculture; difficulties arise with the choice of insurance rates and the object of insurance and, of course, with regard to the payment of insurance compensation.

The problems in this insurance sector are caused not only by the specifics of the industry, which cannot be discounted, but by the fact that agricultural insurance (in the form in which it should be carried out in the modern economic system of Russia) is at a nascent stage - it began to take shape in 2002 .

The market economic mechanism assumes that all participants in commodity production have economic independence and are responsible for the results of their economic activities. But ensuring the country’s food and economic security, the social significance of agriculture and its dependence on natural, climatic and many other external factors require government support for this sector of the economy. World experience shows that in most countries this support is provided through various channels, among which insurance is not the least important. Using the example of the EU member countries (Table 10), it can be seen that the degree of agricultural insurance coverage in some countries reaches 100%, and the amount of government subsidies for insurance reaches 67%.

Agricultural insurance is most widely used in crop production. This can be explained by the fact that it is more dependent on natural factors and suffers greater losses from hazardous natural phenomena. But, in addition, in Russian agriculture there has been a shift towards crop production. If in 1990 the share of crop production in the total volume of agricultural production was only 37%, and livestock production 63%, then in 2006 the proportions changed and amounted to 53 and 47%, respectively. And in developed countries, for example, Germany and Canada, this proportion corresponds to the indicators of the Soviet period.

As a result of this imbalance, the country's agriculture has lost significant income, part of the productive arable land has ceased to be used, and seasonal field work dominates the industry. And the saddest result for Russian society is a sharp reduction in per capita consumption of meat and dairy products and a high share of imports in the market for these products.

Conclusion

The prerequisites for the further development of the insurance business in our country are not only the emerging financial stabilization and economic revival, but also the establishment of sources for such development. First, strengthening the non-state sector of the economy: a private entrepreneur (owner), due to his economic isolation from the state, is forced to insure his risks. Secondly, the source of demand for insurance services is the growth in the volume and diversity of private property of individuals and legal entities. At the same time, the development of the real estate market and mortgage lending for housing construction, as well as the privatization of public housing stock, is important. Thirdly, an important source of development of the insurance market is the reduction of the once comprehensive guarantees provided by the state social insurance and social security system.

It is necessary to form a reliable, effective insurance protection mechanism - this is not just a problem of expanding the activities of insurance organizations. This is the task of modern society as a whole, one of the indispensable factors of a market economy, no matter what orientation it chooses. The social orientation of the economy makes demands on a certain structure of forms and types of insurance.

When insuring agricultural crops, agricultural producers pay 50 percent of insurance premiums to insurers at their own expense, the remaining 50 percent of insurance premiums are paid to insurers from the federal budget. The Government of the Russian Federation can differentiate the amount of insurance premiums paid from the federal budget by agricultural crops and by region.

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Features of crop insurance

Possible insurance:

Cereals and oilseeds;
Greenhouse and seed crops;
Technical and forage areas;
Vegetables and potatoes;
Harvests of gardens and hops, vineyards;
Fruitful bushes and strawberries;
Nurseries and nurseries;
Material for grafting.

Insurance for crops that produce more than once a year includes annual expenses for the entire harvest volume.

It is necessary to take into account that the entire area of crops or production is subject to insurance.

Insurance for crops and crops are:

Natural phenomena:
- frosts of winter crops;
- interseasonal frosts;
- flood;
- hail;
- direct consequence of rainfall;
- drought;
- fire from lightning;
- landslides and mudflows.
Diseases of crops and crops, as well as the proliferation of pests
Illegal actions of third parties that caused damage - theft, arson, and other illegal actions.

The contract can be concluded for one of the risks, or it can be combined. The last type of insurance is called multi-risk. It is the most expensive agricultural insurance service, so enterprises with government support are more likely to enter into multi-risk contracts.

Insurance contracts are not concluded in the following cases:

When enterprises wishing to obtain insurance did not have yield results for the last three years before contacting the insurance company.
Also, crops grown in the risk zone of natural conditions cannot be insured.
Natural hayfields and pasture areas, as well as perennial grasses, are not insured.

Conclusion and execution of the contract

A contract for crop or crop insurance must be concluded before the start date of sowing.

The crop grown in protected soil is insured before the cyclic start of “sowing - planting”.

An agricultural insurance contract is concluded exclusively for the harvest or sowing of the entire sown area.

A feature of this type of insurance contract is also that the insurer has the right to inspect the crops. The first inspection occurs during sowing of the insured products over the entire crop area. Further, the insurer has the right to conduct scheduled and unscheduled inspections.

Agricultural insurance of perennial crops

Insurance of agricultural plantings of perennial plantings, as well as such crops themselves, is carried out until the end of the growing season.

There are two main methods for determining the insurance value of perennial crops, each of them is based on a certain condition.

If a perennial crop is at fruit-bearing age, the book price according to the financial statements as of the date of signing the insurance contract is taken as a basis.
If the age of the crop is not fruitful, the amount spent on cultivating the crop is taken as a basis. The supporting documents are the accounting and reporting documents at the time of signing the contract.

The amount of insurance cannot exceed the total value of the crop harvested from perennial plantings.

Tariff rates

Insurance rates for agricultural risks depend on the cultivation area, the condition of the crops and compliance with agricultural standards and cultivation requirements. The average tariff rate in Russia is 3-6%. The lowest is 0.2%, the highest rates are recorded at 8%.

Each crop has its own tariff rate. In addition, the rates are differentiated according to the degree of losses from the territorial location.

Each region has its own natural characteristics, soil and weather conditions, therefore tariff coefficients are developed based on these characteristics.

Payment of insurance premiums can be made in a lump sum or in installments. In the first case, the entire amount of the annual contribution is paid. If the installment plan is chosen, the contract comes into force the next day after the policyholder makes at least 50% of the premium. The deadline for making the last payment is specified in the contract and cannot be made later.

Premiums for the policy

The insured amount is agreed upon by both parties; its amount is equal to the costs of the technological implementation of the subject of the contract.

The amount of the insurance premium for each crop is calculated by multiplying the cost of the crop from the entire planting area and the tariff rate.

For one-time payments, some insurers provide a discount of up to 10% of the full amount of the insurance payment. To do this, it is necessary to fulfill the terms of the contract:

For the autumn harvest, the contract must be concluded before April 30th
For spring harvest crops – until May 31st
For products cultivated on plantations - until June 31

The last stage of concluding a contract is the delivery of a policy to the policyholder in a certain form.

Procedure in the event of an insured event

The insured must carefully study the terms of the document being signed, especially the clauses related to the topic of indemnification. There is a certain sequence of notifying the insurer about the damage caused, as well as the main obligations of the policyholder that he must fulfill in order to receive insurance payments.

Responsibilities of the policyholder:

Timely and full payment of insurance premiums.
Timely notification of the occurrence of an insured event. The notification periods are specified in each specific agreement. In this case, we recommend that you record in writing the receipt of the notice by the other party.
Notifying the insurance company about control checks and examinations within the time limits specified in the contract. Also record in writing the receipt of the notice by the other party.
Timely provision of statistical data according to established reporting forms, which can confirm the fact of crop shortages.
Provide the insurer with other additional supporting documents if the statistical forms do not completely satisfy the insurer with the facts of crop shortages.
Submission to the insurer of a certificate from the hydrometeorological center confirming hydrometeorological conditions unfavorable for the crop.
Timely submission of an application for compensation of losses with the necessary documents attached. The deadline for submitting applications is also determined by the contract.

Compliance with the requirements of the insurance company will allow you to receive insurance payments in full and within the agreed time frame.

Compensation for losses

Crop damage is calculated by the difference between the volume of insured products received at the end of the season and the average harvest of the last five years per hectare. The amount of losses is based on the price (purchase, market, contract) established in the agricultural insurance contract.

If the crop was lost on the entire sown area, then the damage is calculated as follows: the average yield of one hectare 5 years before the insured event is multiplied by the sown area and the market value of the crop. The result obtained is the amount of insurance payment in case of complete destruction of the plantings. In calculating the damage of each region, a certain territorial coefficient is used.

If crops are destroyed, the enterprise may be reimbursed for the actual cost of expenses for the purchase of seeds, labor, fuel and lubricants, depreciation of equipment, etc.

The insurance policy will be able to cover losses without taking into account lost profits, and the amount of insurance premiums will be insignificant.

To determine the damage, statistical data from the last five years is needed. The enterprise does not always have such indicators on its own. Then the insurance company can take any of the available data from the following list:

Data on the area or district where the policyholder produces crops;
Data on another area and district close to the place of cultivation of the insured crop or sowing;
Regional data where the insured crops or crops are grown;
Regional data of other constituent entities of the Russian Federation closest to the place of cultivation of insured crops.

Also in insurance practice, the issue of reseeding all or part of the area damaged during an insured event often arises. If the crop is lost, completely or partially, and the agrotechnical timing allows for reseeding or underseeding, then the farmer is obliged to do this, and also carries out underseeding at his own expense. The insurance company then reimburses the cost of partial reseeding or reseeding the entire area.

In this case, an inspection report must be drawn up, signed by both parties. If, under these conditions, the policyholder does not fulfill its obligation to sow or replant, the insurer will deduct from the total amount of damage the cost of the products that could have grown in the area where the crop was destroyed.

Agricultural insurance

1. Main types of agricultural insurance

2. Agricultural insurance with state participation

-1 Main types of agricultural insurance

Agriculture is the industry most exposed to the elements of nature, and therefore it is in greater need of insurance protection.

The following are distinguished: types of agricultural insurance:

I. Insurance of agricultural crops and perennial plants (harvest and crops) .

Agricultural crops can be insured against damage, destruction or theft as a result of natural disasters, diseases, attacks by pests, animals, rodents, fire, illegal actions of third parties, destruction of protective structures, power outage, etc.

Insurance events for agricultural crops are their death or damage as a result of drought, lack of heat, excessive moisture, soaking, overheating, frost, freezing, hail, rain, storm, hurricane, flood, mudflow, lack of water or low water in irrigation sources and as a result other meteorological or other natural conditions unusual for the area. The risks of death from diseases, plant pests and fire are taken into account.

When insuring crops, the objects of insurance are not only the material interests of the agricultural producer in the safety of crops as property, but also his material interests in receiving income from the sale of the future harvest. Risks of loss of income are assessed based on the shortfall in actual harvest relative to the long-term average level.

The amount of loss in the event of death or damage to crops is determined based on the cost of crop shortfalls over the entire sown area, calculated by the difference between the average cost of harvest per 1 hectare over the last five years and the cost of the given year at current purchase prices.

The harvest of agricultural crops and perennial plantings, at the request of the policyholder, can be insured only in the event of complete loss of crops or part of the crop area. The amount of damage is determined based on the insured amount per 1 hectare and the size of the area of lost crops.

The conclusion of the contract is confirmed by the issuance of an insurance policy in the established form to the policyholder.

The insurance rate is usually 0.1-2% of the sum insured; for fruit and berry and perennial plantings – 0.2-1.5%; by color – 0.1-1.8%.

II. Farm Animal Insurance

The following animals owned by the insured or taken for fattening are accepted for insurance: horses, cattle, sheep, poultry, camels, donkeys, mules, deer, bee colonies.

Animals are insured in case they are destroyed or damaged for certain specified reasons.

An insured event is death, death, forced slaughter or destruction of animals as a result of the following events: fire, lightning, electric current, explosion, sunstroke (tariff rate 0.2-0.3% of the insured amount); natural disaster (0.3-0.6%); strangulation, animal attack, freezing, poisoning with poisonous herbs, snake bites (0.25-0.7%); illegal actions of 3rd parties (0.2-0.7%).

In the event of the death of a livestock of animals, the amount of damage is determined from their balance sheet (inventory) value on the day of death. Damage in case of death of working livestock (horses, camels, donkeys, mules) is determined minus depreciation. In case of forced slaughter of animals, the cost of edible meat and skins is deducted from the amount of damage.

III. Property insurance for agricultural enterprises.

The following can be accepted for insurance: buildings, structures, transmission devices, machinery, machinery, inventory and equipment, agricultural units and installations (seeders, mowers, cultivators, plows, etc.), unfinished construction projects, agricultural products, etc.

Insurance events for agricultural property are its loss, theft or damage as a result of natural disasters (tariff 0.1-0.2% of the insured amount), groundwater, lightning, soil subsidence, fire (0.2-0.25 %), explosion (0.1-0.15%) and accidents (0.22-0.32%), illegal actions of third parties (0.2-0.3%). The insurance risk is also a sudden threat to property, as a result of which it is necessary to dismantle it and move it to a new location.

The final calculation of the insurance premium is carried out after taking into account all factors influencing the degree of risk (natural and climatic conditions, service life of the property, the presence and condition of security and fire alarms, the condition of the building’s life support systems, etc.).

-2 Agricultural insurance with state participation

Federal Law No. 260-FZ “On state support in the field of agricultural insurance” entered into force on January 1, 2012; in relation to insurance of farm animals - from 01/01/2013; regarding the implementation of compensation payments by the association of insurers - from January 1, 2014.

Agricultural insurance with state support– insurance of property interests associated with the risk of loss (destruction) of agricultural crops, loss (destruction) of perennial plantings, loss (death) of farm animals.

The following are accepted for insurance:

- agricultural crops: grains, legumes, oilseeds, industrial, fodder, melons, potatoes, vegetables, vineyards, fruit, berry, nut plantations, hop and tea plantations;

- perennial plantings: vineyards, fruit, berry, nut plantations, hop and tea plantations;

- farm animals: Cattle (buffaloes, bulls, oxen, cows, yaks); small livestock (goats, sheep); pigs; horses, hinnies, mules, donkeys; camels; deer (deer, sika deer, reindeer); rabbits, fur animals; poultry of egg-laying breeds and poultry of meat breeds (geese, turkeys, chickens, quails, ducks, guinea fowl), broiler chickens; bee families

Of the 1.95 billion insurance premiums accrued under agricultural insurance contracts with state support in the first half of 2019, 1.4 billion rubles, or 72%, fell on the top ten largest regional markets. This conclusion follows from an analysis of data on concluded contracts conducted by the National Union of Agricultural Insurers.

Losses of agricultural producers in the Irkutsk region from a catastrophic flood, subject to compensation from the budget, could grow to 500 million rubles. Russian Minister of Agriculture Dmitry Patrushev reported this to Russian President Vladimir Putin at a meeting in the affected region on July 19. The President of Russia instructed to speed up work on paying compensation to farmers. According to the National Union of Agricultural Insurers, compensation for these losses is entirely covered by the State Reserve Fund, since the risks of farmers in flooded areas were not insured.

The National Union of Agricultural Insurers conducted an analysis of regional spring sowing insurance data: in the period from January to June 2019, crop insurance contracts under state support were concluded in 39 regions of the Russian Federation, while in 37 regions the area of insured crops increased. “In the vast majority of regions, there is either a multiple increase in crop insurance coverage, or a restoration of this indicator from zero values last year,” said NIA President Korney Bizhdov, commenting on the results of the half-year.

“During the spring sowing campaign, there was an almost universal return of regions of the Russian Federation to the practice of insuring agricultural crops on the terms of state support,” said the President of the National Union of Agricultural Insurers, Korney Bizhdov, commenting on the results of the first half of the year.

Over the 6 months of 2019, the agricultural insurance market with state support showed more than threefold growth compared to the same period in 2018. According to insurance companies that entered the database of the National Union of Agricultural Insurers as of July 1, 2019, the volume of insurance premiums under contracts with state support January to June amounted to 1.95 billion rubles, which is comparable to the volume of this market for the entire 2018 (2.0 billion rubles).

“According to the NSA, based on the results of the current agricultural season, farmers in 10 regions of the Center, Volga region and Trans-Urals may be affected by a complex of unfavorable natural phenomena. The yield of the main agricultural crops in a number of areas of these constituent entities of the Russian Federation may decrease significantly,” said the President of the National Union of Agricultural Insurers, Korney Bizhdov, commenting on the data of the analysis conducted by the NSA.

“The agricultural insurance system with state support in the Republic of Kalmykia will be restored if the agro-industrial complex of the republic shows interest and an active position in this issue,” said the President of the National Union of Agricultural Insurers Korney Bizhdov, commenting on the results of a visiting meeting on agricultural development in Elista, which was held by the Committee of the Federation Council on agrarian and food policy and environmental management under the leadership of committee chairman Alexei Mayorov.

“The experience of introducing index insurance in the Republic of Kazakhstan, which the participants of the NSA round table on agricultural insurance in St. Petersburg were familiarized with, deserves careful study. The risk of drought, which this system is designed to insure, is also one of the main risks for crop production in Russia,” said the President of the National Union of Agricultural Insurers, Korney Bizhdov, commenting on the report of the representative of the Republic of Kazakhstan at the event.

“The experience of European countries in the development of multi-risk crop insurance and hail insurance should be used in Russia - in particular, the experience of France is very important,” commented the President of the National Union of Agricultural Insurers Korney Bizhdov on the results of the NIA International Round Table on Agricultural Insurance in St. Petersburg .

“The National Union of Agricultural Insurers and the State Duma Committee on Agrarian Issues may return this fall to a specific discussion of the issue of additional agricultural insurance programs with state support to protect specific risks of certain areas of agricultural production,” said NIA President Korney Bizhdov, commenting on the results of the working meeting with the deputy chairman State Duma Committee on Agrarian Issues by Airat Khairullin, which took place in the State Duma of the Russian Federation on June 26.

The greatest activity in the first half of 2019 in insuring agricultural crops on the terms of state support was shown during the spring sowing season by farmers in the Republic of Mordovia, the Voronezh region and the Altai Territory. These regions became the leaders in terms of the size of the insured spring sowing area, according to data received by the NSA at the beginning of June.

The Federation Council Committee on Agricultural and Food Policy and Environmental Management will recommend that the Government of the Russian Federation create a systematic framework for managing agricultural risks within the framework of the State Program for the Development of Agriculture for 2013-2020. This decision is contained in the draft minutes of the meeting on the results of the implementation of the State Program in 2018, which took place on June 18 in the Federation Council chaired by Senator Sergei Lisovsky.

“This year, companies of the National Union of Agricultural Insurers have noted an unprecedented increase in demand for crop insurance. As of June 1, the insured area of spring sowing increased almost 7 times compared to the same date last year. This is a direct consequence of the legislative changes that have occurred, as well as joint and targeted measures taken by the Ministry of Agriculture, the Ministry of Finance, the Bank of Russia and the NIA to restore and develop the agricultural insurance market in our country,” said NIA President Korney Bizhdov, commenting on the union’s data on insurance of the spring sowing season. .

As of June 7, in the southern regions of the Volga region, the Ural region and Siberia, a pronounced zone has formed in which the development of agricultural crops is occurring with a serious delay. This is evidenced by data from the space monitoring system of the National Union of Agricultural Insurers, which the union presented on June 10 at the III All-Russian Conference “Information Technologies in the Service of the Russian Agro-Industrial Complex.”

The Commission of the National Union of Agricultural Insurers took control of the situation in the agricultural sector, insured with state support, in 3 constituent entities of Russia, where a state of emergency was declared in April and May. The cause of the emergency in these regions was the threat of death of winter crops due to unfavorable natural factors, drought, fires and damping-off and loss of farm animals due to fire.

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There is no industry in the Russian economy that is more dependent on the whims of nature than the agricultural sector. How to protect your business from crop shortages due to abnormal droughts, early frosts, poor pollination due to prolonged rains? To avoid such troubles, it is necessary to insure the crop.

Agricultural crop insurance

According to the Law “On the Organization of Insurance Business in the Russian Federation” and the Rules for Insurance of Agricultural Crops and Perennial Plants, the subject of the transaction can be various annual and perennial crops: grains, melons, fruits and berries, etc.

The following are not subject to insurance:

Yields from natural hayfields and pastures;
Annual crops that have not produced a harvest for 3-5 years;
Perennial plants that do not bear fruit for 5 years in a row;
Crops planted in an area recognized as potentially susceptible to natural disasters (landslides, earthquakes, floods, etc.).

Crop insurance - main risks

Most often, agricultural companies insure against:

adverse natural phenomena (drying out, freezing, hail, etc.), as well as abnormal natural disasters unusual for the area (heavy snowfalls, landslides, rainstorms);
diseases, crop damage by pests;
fire;
illegal actions of third parties;
failure of equipment and violation of plant maintenance conditions due to natural disasters.

Insurance is provided in case of a decrease in harvest volume compared to the average amount of production obtained from 1 hectare over the past 5 years. Another option is insurance against complete plant loss. The amount of damage in this case is equal to the insured amount per 1 hectare, multiplied by the area of lost crops.

Agricultural crop insurance is one of the key points of effective and productive activity. If there is no harvest, there is no profit. Insurance will help an agricultural company “stay afloat” even in the most difficult times.

Advice from Sravni.ru: Some insurance companies offer a good discount on the insurance premium, provided that the policyholder (the owner of the crops) pays for the service not in installments, but immediately upon concluding the contract, in one payment.

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