\"AFBA\": The incurance of agricultural products will significantly stimulate in developnemt of Georgian agriculture
The association of young financiers and businessmen – \"AFBA” considers government’s another initiative concerning implementation of insurance system, for agriculture’s future development, an unprecedented event. The members of organization further discussed this issue on 26th of August briefing, at the \"Pirvelis Press-Club”.
They state, that people are frequently exposed to the news via TV, where they see peasants and farmers, deprived of their belongings, vineyards, vegetables, fruits, citruses and crops because of the natural disasters. They ask government for reimbursement of loss, which on the basis, that the possibilities of the budget is limited, rarely happens and the need for agricultural insurance system is derived exactly from this fact.
Currently, the topic concerns the subsidy ofthe percentage in case of agricultural insurance, which will contain 70% - 90%, and in some cases - 95%. Upon signing the contract, farmer will have to pay 5-30% of the 1 year packet. During the subsidization of this packet, the government will reimburse a person with 30,000 GEL and cooperative with 50,000 GEL. According to the program, the insurance covers agricultural losses from natural disasters such as: hail, excessive rainfall, hurricanes and autumn frost (only in case of citrus crops).
As the vice-president of \"AFBA”, Shota Gulbani, states, a set of events are required to make the pilot project effective and long-term oriented. – \"It is crucial, to prolong this project over a year. As you know, insurance of agriculture is one of the most complicated forms of insurance and requires deep knowledge of the agriculture field. It is natural, that insurance companies are currently holding back to introduce such a risky product on the market, because the farmer does not have sufficient funds to purchase an expensive insurance. Exactly because of this, it is important for government to be involved and provide subsidy, so that not only companies will show interest in diversification of this product, which will further develop the competition on the market and stabilize the prices, but also farmers will have an option to provide insurance for their harvest, which is extremely vital for them.” – says Shota Gulbani.
The lack of communication between the farmers and the insurance companies is also something to be worth noted. \"The lack of information, which in the end, results in numerous misunderstandings. It is important to establish certain information centers in regions, where farmers and peasants will be provided with information of where to go, how to act and how to be updated with the on-going changes. Full implementation of agricultural insurance system is as important, as the farmer’s productivity and motivation, to have a bigger harvest in future, which will be protected by the insurance. Reviewing the statistics, it’s clear, that successful implementation of agriculture insurance is based on government subsidy” – states Gulbani.
Organizations’ analytic, Paata Bairakhtari, emphasizes the attention on foreign practice: \"For example, United States, with the abundance of agricultural insurance bonuses, is the first country in the world. According to statistics, United States provides $11,650 mil. for agricultural insurance. Japan holds the second place with $3,900 mil., followed by Spain with $920 mil., Brazil with $640 mil., Mexico - $500 mil., Argentina – $280 mil. and Turkey with $245 mil. As of Georgia, government plans to devote 5 mil. GEL to implement the project, which in accordance with the country’s scale and possibilities, will be a big foundation for development of agriculture insurance.” – states Bairakhtari.
It is also crucial, for government to start working on the project of unified approach to the state insurance in parallel to prior stated program, which will guarantee further insurance of various agricultural fields and their subsidization from the government, which will include the co-financing of insurance fees.
\"Young financiers will support each project, which is directed towards the economic improvement. We consider, that the development of agriculture is a starting point for national economic progress, and in case agricultural insurance is not stimulated, we will be left with numerous affected peasants and farmers, whose annual harvest is destroyed, because government machine is malfunctioning” – states Shota Gulbani.
\"AFBA” is ready to cooperate with the government for implementation of such stimulating projects.