Resolution of the Cabinet of Ministers on Approval of Composition of Agricultural Insurance – Comment

https://cabmin.gov.az/az/document/4137/

On December 14, the Cabinet of Ministers approved the Charter of the “Agricultural Insurance Fund”. Prime Minister Ali Asadov signed a decree on this issue.

The charter of the Agricultural Insurance Fund contains 11 theses. The charter establishes the goals, objectives and rights of the Agricultural Insurance Fund, its management, authorized capital, the basics of property and financial activity, the rules for preparing and submitting audits, records and reports, and other issues. According to the Charter, the Agricultural Insurance Fund is a non-profit legal entity established in the Republic of Azerbaijan to ensure the organization, development and stability of the agricultural insurance system, as well as the formation and control of the management structure. Define insurance and reinsurance policies for managing insurance obligations assumed by the Fund, accept investment policies for investing assets to ensure efficient operation, enter into agreements with agricultural insurance intermediaries for insurance brokerage, as well as adoption of policies for the sustainability of the agricultural insurance system. Agricultural Insurance Fund will allocate 1 million manat from the state budget for 2019, 5 million from the state budget in 2020 and 3 million manat from the state budget in 2021. In accordance with the Charter, in the fund created Council of Patronage included 5 people, acting on a voluntary basis. The Council of Patronage of the Fund consists of two members from the Ministry of Agriculture of the Azerbaijan Republic, one person from the Ministry of Finance, one from the Central Bank and one from the Farmers Associations. The Chairman of the Council of Patronage of the Fund is a representative of the Ministry of Agriculture of the Republic of Azerbaijan.

The Law of the Republic of Azerbaijan “On Agricultural Insurance” entered into force on January 1, 2020. The Fund was created by the Decree of the President of the Republic of Azerbaijan Ilham Aliyev on the application of the Law “On Agricultural Insurance” and “the establishment of the Agricultural Insurance Fund” on August 19. On December 19, the Cabinet of Ministers adopted a resolution on products within the scope of agricultural insurance. It is considered advisable to carry out this process, which has never been in our country, taking into account international experience. On the other hand, it was decided to carry out this work in stages, since it was first introduced and does not have sufficient experience in calculating tariffs in the field of agricultural insurance in our country. What agricultural products will be insured at the initial stage? The decision of the CM answers this question.

Crop production sector

In order to strengthen food security, reduce dependence on plant sources of raw materials supplies to the country, and support the development of sugar beets in the country: In order to strengthen food security, reduce dependence on plant sources of raw materials supplies to the country, and support the development of sugar beets in the country:

- wheat;

- barley;

- corn;

- potato;

- sugar beet.

In order to import substitution and increase export potential:

- Orange;

- lemon;

- tangerine;

- tea;

- tobacco;

- paddy;

- grape;

- huzelnut;

- cotton.

Animal husbandry sector

In order to increase productivity and production:

- dairy cows and buffaloes from 1 to 7 years

For products grown in water

To stimulate the development of aquaculture, to increase the share of local production in the supply of fish products, it is at the initial stage:

- fish

insurance will be provided.

The Agricultural Insurance Fund will also participate in the insurance of these products and will bear 50% of the risk. Joint insurance of the above products with the Agricultural Insurance Fund and private insurance companies

- It will reduce investment risks;

- It will strengthen the protection of farmers;

- It will provide the conditions for expanding production;

- It will impact positiveness on employment;

- This will lead increase in the production of the products listed;

- It will affect the stabilization of prices in the market;

- It will contribute to food security;

- It will strengthen the insurance market.

Link: https://cabmin.gov.az/az/article/633/