Home  Journals  Economic Analysis: Theory and Practice  6(135) – 2009 February

State aid for crop insurance companies

Available online: 18 September 2009

Subject Heading: Agricultural insurance

JEL Classification: 

Crop insurance for agricultural manufacturers is now a vital issue. The insurance is optional. Part of the insurance premium and part of the lending rate are funded by the government. Corn farming in the Kirov region is the key industry. The analysis of the industry performance shows the want of insurance coverage, because the average crop capacity in the region in 2006 amounted to 13.1 centner per hectare, which is much lower than the level of crop-weather relation (25 centner per hectare). Agricultural insurance has a hard fight to be maintained: due to the loss ratio thereof insurers offer their services only to economically strong farms, reducing the risks. Whereas farms can hardly find money to enter into an insurance contract. Compulsory insurance only can solve all the problems; that will minimize the risks of agricultural manufacturers, causing to expand money for apportioning and covering losses in case of such occurrence; as well as will enhance state monitoring the expenditure of budgetary funds.

Keywords: insurance, premium, subsidies, budget, cost, crop, favorable, price, factors, net cost, financing, unsteadiness, farm

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ISSN 2311-8725 (Online)
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