Why Kazakh farmers are in no hurry to get agricultural insurance - the experts analyzed

Less than one percent of agricultural producers in Kazakhstan use the services of agricultural insurance. How can we encourage farmers to do so? International experts of AgroInsurance International answered this and other questions within the framework of the German-Kazakh Agro-Political Dialogue, World of NAN reports.

According to Yeldos Auezbekov, a member of the board of the AgroInsurance Association, despite the fact that the previous insurance system is no longer trusted by citizens, interest in the services among farmers is growing. Statistics show that farmers aren't lining up for this service. So how can this situation be changed? Several options were suggested by international experts.

For example, at the online meeting it was proposed to increase the percentage of subsidization of insurance up to 80% for 3-5 years in order to encourage farmers. Yeldos Auezbekov said that they proposed a similar measure to the Ministry of Agriculture, but the agency ruled it out. It is to be expected, since the Ministry of Agriculture has a limited budget. Meanwhile, international experts have shown a world ranking of the leaders of agricultural insurance. The top three are the countries where the state subsidizes the insurance at the level of 65-90%.

Another method of agroinsurance stimulation was voiced. The experts suggested tying insurance to other types of state support. To put it simply, if you want to receive subsidies, you should take part in agricultural insurance. And this method was of interest to the representative of the Ministry of Agriculture, who was present at the online discussion, he even asked whether many countries use it. As it turned out, this is a very common practice. It seems that Kazakh farmers will not like this system, because it is an additional burden on their capital. However, today the Ministry of Agriculture is serious about imposing obligations on subsidy recipients, so this method will obviously be of interest to officials.

Next, the experts recommended expanding the pool of agricultural insurance, that is, adding new crops and types of insurance. "The insurance product should reflect the real need of farmers in what they insure and against what risks. Therefore, additional analysis and verification of data is required to formulate tariffs," said Yan Shinkarenko, director of AgroInsurance International.

It should be emphasized that the work in this direction is well underway. Thus, this year there are services on insurance of bovine cattle, horses, small cattle and poultry. Also, according to information of AgroInsurance Association, next year services on insurance of garden crops will be considered. Insurers aren't idle, because there are prospects for making money. International experts are of the same opinion and they estimate the potential of the agricultural insurance market in Kazakhstan as high as 90 million euros.

However, do you know what the most interesting part is? In Kazakhstan there are only 8 companies that offer subsidized insurance. A little low competition, isn't it? If there were more companies, the conditions would probably be more favorable. Live competition creates better terms. International experts also suggested changing the terms, but will it be profitable for local insurers?

In general, the mechanism of agricultural insurance is a useful thing. Insurance can literally save the farmer. The government is also interested in this, because people need to be fed, and not only for a year. However, the system requires fine-tuning, and not a minor one at that. That is why international experts gave a huge package of recommendations to improve agricultural insurance and its subsidization. All of them are useful for insurance companies and the government. The only thing left to do is to wait for everything to work like in developed countries. Let's hope for the best. What else can we do?