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Agriculture Ministry proposes to introduce insurance system in agriculture

It is proposed to adopt a special law on insurance in agriculture. The corresponding draft law was submitted by the Ministry of Agriculture, Water Resources and Regional Development for public discussion.

The ministry notes that development of an effective market system provides for state support for agriculture. Insurance is one of the main areas of such support in agriculture. In 2009, Kyrgyzstan adopted a law on the specifics of insurance in crop production, but, it does not work due to the lack of an effective implementation mechanism.

«The current model of state aid turned out to be ineffective and needs to be reformed by adopting a new law, developed taking into account previous experience,» the Ministry of Agriculture says.

The ministry believes that in order to build an effective model of state support for agricultural insurance, it is necessary to create a regulatory framework that would provide all insured and insurers with equal access and equal opportunities in the agricultural insurance market, as well as expand the concept of state support and change the procedure for providing financial assistance.

The bill introduces a classification of insurance in agriculture: types and objects of insurance, types of risks in agriculture, in which the occurrence of an insured event is likely, reinsurance issues and much more, including the risks of loss (destruction) of agricultural crops, planting of perennial plantations, loss (death), forced slaughter of farm animals, aquaculture products will be subject to insurance. A list of insured events will be established for which the insurance payment will be made.

The bill introduces a rule on the development of a standard insurance product in case of a lack of state support, a rule on creation of an information system. The conditions and procedure for insurance covered by state support will also be determined. The bill proposes creation of a unit responsible for agricultural insurance.