Only 5% of farmers are insured in Ukraine (infographics)

Agricultural insurance is the world’s most popular tool for protecting farmers. It allows to minimize crop or livestock losses due to weather conditions, writes “Agro-Center”.

Data from the International Finance Corporation indicate that farmers are most likely to be affected by weather conditions, diseases, weeds, and pests. Here are the figures:



Farmers’ insurance is divided into several types:

– insurance of production costs;
– insurance of winter crops;
– insurance of a crop. Production insures a potential yield in case of different risks;
– income insurance. The price of a crop, the price-indicator, the price fixing date, the list of risks and the method of their estimation are agreed upon;
– insurance against one or several types of risks;
– index insurance. Insurance is based not on the statistics of the economy, but on the average indicator in the region;
– yield index insurance. The calculations are based on the statistics of the yield in the district for 10 or 30 years, as well as data on the sown area, harvesting, and state statistics;

– weather index insurance. Insurance against specific weather conditions for a period of 10-20 days and with payment after 30 days upon termination of the contract.

Insurance allows farmers to receive compensation and help in case of a loss of yield. It minimizes the risk of going bankrupt. In addition, it also reduces the pressure on the state budget in the case of massive farmers’ losses. Experts believe that state control over insurance companies is much more effective than monopolization of the insurance services market.

There were several attempts to encourage farmers to use insurance services in Ukraine. In 2005-2007 a subsidy program operated and failed due to lack of flexibility and insurance companies. In 2012, the Law “On peculiarities of agricultural insurance with state support” was adopted. However, the law says that for obtaining insurance, an agricultural business must obtain a license. Also, Agrarian Pool, a non-profit organization that unites insurers to develop a unified line of types of agri-insurance, was created.

Hands holding bunch of tomatoes.

And in 2018, the President signed a new Law “On Amendments to the Tax Code of Ukraine and certain Laws of Ukraine on Stimulation of the Creation and Activities of Family Farms”, which establishes state assistance for a single payment to the mandatory state social insurance (from 10% to 90% of the minimum insurance premium) for each member of the farm for 10 years at the expense of the State Budget of Ukraine.
However, farmers’ insurance statistic is currently insignificant. Thus, during the past year, in Ukraine, only 957 agri-insurance agreements for the amount of 69.5 million UAH were registered. The total area of ​ insured territories is 661 thousand hectares.

Spelling error report

The following text will be sent to our editors: