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Saturday, Sep 24, 2022
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Insurance

Farmers can apply for aid under the production insurance scheme

The budget for this aid is BGN 3.5 million and producers of fruits, vegetables, essential oils and oilseeds, and tobacco can benefit from it.

In these branches, they will receive up to 65% of the value of the insurance premium or up to BGN 195 per hectare. Since last year the scheme has been expanded to include cereals. hectare.

Commenting on Bulgarian Farmer, Nina Kolchakova, Secretary-General of ABZ, said that often when choosing insurance, an important criterion for farmers is the price of the policy. However, this can be misleading if it is not accompanied by a clear understanding and awareness of the policy conditions – what risks are covered, what are the limits on them, how the damage is assessed, etc. Otherwise, in the event of a realized risk, such as an adverse natural phenomenon, farmers may remain dissatisfied and disappointed – either with the amount of compensation or by refusing to recognize the damage. And the explanation can be very simple – such were the conditions of the policy they concluded. In fact,
The insurances in agriculture are not standardized and various offers are offered on the Bulgarian market, explained Nina Kolchakova. That is why farmers must be careful in their choice, to be aware of what risks are most characteristic of their type of activity and their area, so that they are included in the coverage of the policy. They must be acquainted in advance with all the conditions of an offer, because only then will they be able to determine whether an insurance offer meets their needs.
Apart from determining the risks adequate to the needs, another thing to pay attention to is the insurance limits. The indemnities depend both on the actual losses caused and on the chosen limit, ie. the maximum amount of indemnity that can be paid upon realization of given insurance risk under the policy. No matter the cost of the lost crop, the compensation cannot exceed the limits of the policy. Therefore, it is good to take this condition into account – however, the loss per unit area as the cost may be different for different crops. For example, there is a practice of negotiating limits of up to BGN 150-170 per decare per year – this limit may be satisfactory for producers of cereals, but not for essential oil and other crops, where the cost reaches BGN 300-400.
In determining the tariffs of their products, which includes risk assessment, insurers are based on agrometeorological forecasts and historical information on climate and climatic phenomena, which has been collected for decades – 50, 60, or even 100 years. Long-term observations make it possible to determine whether a natural/climatic phenomenon is accidental or there is a tendency for its regular occurrence. From the point of view of insurance such a regular manifestation, ie. An event that is certain to occur is defined as a “certain” risk and as such is not “insurable”. Thus, agrometeorological conditions are a leading factor in setting the deadline of April 20, before which fruit and vegetable growers are not insured against reliance. By the way,
Drought is another climatic phenomenon, which is common, for sure, for our region and therefore is generally not covered by Bulgarian insurers. However, in 2020, for the first time in the country, agricultural drought insurance was offered, and this product comes as a result of cooperation between international re / insurance groups. It would not be possible to offer such a product on its own, only from a Bulgarian insurer, for example.

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