Page 32 - Azerbaijan State University of Economics

Y.V. Aleskerovа: Governmental support to agricultural insurance in the countries of the world

costs of major climatic disasters may increase further in the future due to climate change. Farmers

and herders have developed risk management strategies to cope with these adverse events,

sometimes with government assistance. Agricultural insurance is one financial tool that agricultural

producers can utilize to mitigate the impacts of unpreventable risks. Although agricultural

insurance has been offered in some industrialized countries for more than a century, the

agricultural sector remains underserviced in middle- and low-income countries. Since the late

1990s, however, dwindling public support to agricultural producers in emerging markets has led to

a renewed interest in agricultural insurance. The development of agricultural risk modeling

techniques and the emergence of insurance pools and index-based insurance contributed to a

revisiting of the potential role of agriculture insurance in emerging economies. A recent study

conducted by the World Bank shows that agricultural insurance is currently available in more than

100 countries either as well-developed programs or pilots. While the vast majority of high-income

countries have well-established agricultural insurance markets, only one-third of middle- and low-

income countries currently offer such products and programs. The World Bank supports the

development of agricultural insurance as part of an overall agricultural risk management

framework. The World Bank assists middle- and low-income countries in designing and

implementing traditional and innovative agricultural crop and livestock insurance products and in

forming agricultural insurance pools. These projects are often connected to agricultural finance

support efforts and tied to complementary efforts in agricultural extension [1,2].

Governments in developing countries have been increasingly involved in the support of

commercial agricultural (crop and livestock) insurance programs in recent years. A striking

example is China, where, with support (and premium subsidies) from the central and provincial

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