Yelena Fastova: ‘We didn’t have any agricultural insurance in the market five years ago!’
The vice minister of agriculture of Russia about the problem of trust of agriculturists to insurers and the leadership of Tatarstan in agricultural insurance
Since the start of 2023, Tatarstan agriculturists have insured 305,000 hectares of agricultural lands, which is 21% of their total amount. This is already 240% above the numbers in 2022. So the republic became a leader in the amount of insured winter crop areas in Russia, noted President of the National Union of Agricultural Insurers Korney Bizhdov. Read more about the situation in agricultural insurance in Russia and Tatarstan in particular in Realnoe Vremya’s report.
Less than 1% of insured areas
Agricultural insurance has started to spread as a type of activity in Russia in the last years only. Less than 1% of all agricultural areas was insured in 2018. Vice Minister of Agriculture of the country Yelena Fastova said this during Russian Field Day 2023 exhibition in Kazan.
“We didn’t have agricultural insurance in the market five years ago. In 2018, such a mechanism as a type of activity didn’t exist. Less than 1% of all agricultural areas was insured,” she stressed.
According to her, such statistics has to do with agriculturists’ distrust in insurance companies. The latter, in turn, were cautious about such insurance type because it was never spread.
“There was no trust for many years because there were mechanisms when there was obtained insurance but money wasn’t paid. Insurance companies themselves didn’t want this because they were afraid of this insurance type. We prepared insurance companies for five years. We brought them up, so to speak,” Fastova explained.
The speaker said that there had been notable changes in this sphere in the last five years:
“We worked on two directions — insurance companies should explain and want to insure while agricultural producers should understand what it is. It is a multifaceted problem, but there was a life-changing moment in the last five years. I hope this will continue developing.”
President of the National Union of Agricultural Insurers Korney Bizhdov also noted the improvement in the situation in agricultural insurance. According to him, the amount of insured areas in Russia increased from 1.2 billion hectares to 7.8 billion hectares from 2018 to 2022. The growth totalled 35%.
“We see a real transformation of the situation. Tatarstan increased insurance seven times compared to the same period last year. We perfectly understand that this is a big job done by the Ministry of Agriculture and those who involved in the organisation of agricultural insurance, branches of agricultural insurance companies,” he stressed.
“Compared to the current situation, this is not enough”
Nowadays 305,000 hectares of agricultural lands are insurance in Tatarstan, which is 21% of their total volume. However, due to the emergency declared in the region because of the drought, this is not enough.
“Tatarstan declared an emergency. This is an order of the republic’s leader, this is why the situation is really tough, but today it has been said many times that Tatarstan is actively increasing the number of insured lands, it fulfilled 15% of the plan in spring. As for the current situation, this is not enough,” Fastova stressed.
At the same time she assumed that the number of insured lands will continue growing because of the weather:
“I think farmers will become more active this year because the year is dry, many regions have been affected. It seems to me that now it is time to get insured and everybody who wasn’t insured will see those who were will receive payouts”
As Bizhdov said, insurance companies of the republic already started to work with affected lands and start making payments soon. There has already been claimed a damage of 50,000 hectares in Tatarstan.
“An emergency was declared. We already know thanks to some insurance companies operating in the republic, experts are at the fields. The evaluation will be made quickly, and we will take this under strict control to meet deadlines and do this as soon as possible,” he assured the audience.
Most land in Tatarstan has suffered from drought in the last 11 years
12 types of dangerous occurrences have been seen in Tatarstan in the last 11 years, Bizhdov said. The most spread phenomena are hot dry wind, air and soil drought.
At the same time, precisely drought-related occurrences pose the biggest threat to Tatarstan agriculturists. The share of these natural occurrences has reached 77% of all losses in the last 11 years.
In 2023, agriculturists of the republic claimed loses regarding following risks as of 1 June:
- frost killing and ice crust (26,000 hectares),
- frost (2,500 hectares).
Bizhdov also emphasised that Leninogorsk, Aktanysh and Mamadysh districts of the republic are the most emergency subject areas.
He also added that in the last two years around 400 million rubles were compensated in Tatarstan in compensation payments. In 2023 alone, this number is 700 million rubles in Russia.
“We forecast a significant rise due to the unpleasant weather conditions. I already said that it is Stavropol, Udmurtia and now Tatarstan. According to our data, the damage on the territory of the republic is already 50,000 hectares,” the president of the union claimed.