The State Duma adopted in the third, final reading the amendments launching a new budget option for protecting agricultural risks – in the fall, agricultural enterprises will be able to purchase policies against emergency situations (ES). They will cost two to three times cheaper than the current agricultural insurance policies with state support, but payments will also cover only direct costs of the crop – as a rule, 40-50% of its cost. At the start, the state will subsidize the purchase of such insurance especially generously – by 80% of the cost of the policy, in four years the support will drop to 50%.
Yesterday, the deputies adopted in the third reading amendments to the laws on state support for agricultural insurance and on the development of agriculture – on a new type of insurance against losses as a result of natural emergencies. Now the state pays 50% of the cost of multi-risk agricultural insurance – it is in demand, and in the event of an unfavorable season, the farm compensates for the total loss of products on insured crops. According to the National Union of Agricultural Insurers (NSA), in 2020, plant breeders received 2.6 billion rubles under such policies. payments – with a total insurance premium of about 3.5 billion rubles.
However, such insurance is in demand by large agricultural enterprises, while the new type should attract small and medium-sized farms.
The size of the subsidy for insurance against emergency situations will be 80% of the cost of the policy, such support will be valid only for the first year of the updated law; for small businesses two years, then each year will decrease by 10% to 50% in 2025. For the rest, the size of the subsidy will decrease faster – also by 10% annually, to 50% from July 1, 2024.
“According to the preliminary assessment of the union, at the current cost of a multi-risk policy of 200-900 rubles per hectare, an emergency policy will cost 2-3.5 times cheaper,” says NAA President Korney Bizhdov. “A statistical base on emergencies that had consequences for the agro-industrial complex has already been formed. over the past 15 years – according to the official data of the Ministry of Agriculture and the Ministry of Emergency Situations – on this basis we plan to complete the calculation of tariffs for the autumn sowing campaign ”.
The union expects that new policies from emergencies may well compete with multi-risk ones; after the start of the law, their ratio is expected to be 50/50 on the market.
However, as Mr. Bizhdov says, the main users of the new insurance will be medium-sized farms. The main players in the market will prefer multi-risk policies: an emergency policy will reimburse farmers only 35-50% of the cost of the crop in crop production, in addition, the so-called unconditional franchise will operate – an unpaid part of the loss, the minimum of such a franchise is set by law at 10% of the cost of the crop.
In its response to the project, the government writes about its support for the changes, but indicates the need for additional study of the issue of a phased reduction in the size of subsidies “in order to avoid unreasonable overstatement of the budgetary system costs … as well as to establish the amount of the insured amount and the maximum level of unconditional deductible under such agreements.” “There are fears that such agreements with a large franchise and a small amount of payments will not solve the problems of the farmer who bought the budget policy,” Korney Bizhdov explains to Kommersant. , who did not understand the product, as a payment only reimbursement of direct costs. “
The amendments adopted by the deputies come into force on July 1, 2021. “According to the NSA, in the current spring sowing campaign, as of May 1, Russian agrarians have already insured 530 thousand hectares, which is 21% more than on the same date a year earlier (439 thousand hectares). However, the coverage of crops with insurance is still insufficient to provide the country’s crop production with full-scale protection – in 2020 only 7% of the sown area was insured, in 2021 an increase to 8-10% is possible. The introduction of emergency insurance will help solve this problem, but not all at once. The new program will be tested in practice during 2022, and in 2023-2024 the NSA expects to reach a significant coverage of at least 30% of crops, ”says the head of the NSA.