Page 33 - Azerbaijan State University of Economics

THE JOURNAL OF ECONOMIC SCIENCES: THEORY AND PRACTICE, V.71, # 2, 2014, pp. 31-41

governments, the agricultural insurance market grew dramatically to become the second largest

market in the world (after the United States) in 2008 [ 3,4].

In India and Mexico, weather based crop insurance has been developed on a large scale to

protect farmers against the vagaries of the weather. Many other countries have investigated the

feasibility of agricultural insurance, and some have implemented pilot programs. One common

feature of many agricultural insurance programs is public support for agricultural insurance [ 5,6].

With some rare exceptions, such as the hail insurance market, governments are supporting

the development and particularly the expansion of agricultural insurance, often by subsidizing

premiums. In their attempt to design and implement agricultural insurance, many governments in

developing countries have sought technical assistance from the international community,

including the World Bank. The Bank is one of the few international financial organizations that

has a fully dedicated insurance team of agricultural insurance experts, who currently provide

technical assistance in more than 20 countries.

A recurrent request from governments is for information on the international experience

with agricultural insurance, not only in developed countries, in some of which agricultural

insurance has been offered for more than a century, but also in middle- and low-income

countries. In particular, there is interest in the experience of public support for agricultural

insurance, including its technical, operational, financial, and institutional aspects.

Main part. Global agricultural premium volume increased dramatically between 2004 and

2007, rising from $8 billion to about $20 billion, $15 billion of which is captured by the World

Bank survey. This stunning increase was caused by rising agricultural commodity prices and sum

insured values on which premium was paid; the expansion of agricultural insurance in China,

Brazil, and Eastern Europe; and increasing government subsidy support in major countries,

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