The number of agricultural producers that insure their crops increases yearly, but the rise is insignificant, deputy head of the Agency for Payments and Intervention in Agriculture Nicolae Ciubuc has told IPN. According to the official, only 4% of the farmland is insured. The farmers do not have money to invest in this type of services, but also do not trust much the insurance system. Thus, most of them count on good luck and good weather.

“The credibility of the insurance system is low. When risks occur, the companies do not fully honor their obligations. They resort to different ways to avoid paying insurance damage and thus the framers are dissatisfied,” said Nicolae Ciubuc.

He also said that the insured areas are not very large, even if the state subsidizes 50-60% of the insurance premium, depending on the insured crops. In order to improve the situation, the insurance market in agriculture was liberalized. Earlier, only two companies had a license in this sector. Now all the insurance companies can provide agricultural insurance. “There are more companies, but the problem wasn’t solved in essence,” said the deputy head of the Agency for Payments and Intervention in Agriculture.

Oleg Galbura, head of the agricultural insurance section of the insurance company Moldasig, confirmed that the number of applicants for insurance in agriculture is very low. Those who use insurance do it for orchards and when there is excessive drought. Earlier, the farmers insured their crops against torrential rain, but now the number of applicants is lower. As regards floods, there are only 3-4 contracts a year.  Some of the producers want to purchase insurance when certain forecasts are made, but the legislation stipulates definite terms. The spring crops - corn, sugar beet and sunflower - are insured until June 1, while the autumn ones – wheat, barley and rape - until December 1.

Victor Moroz, of the Institute of Economy, Finance and Statistics, said that for this sector to be more popular, state subsidies should be raised. “The subsidies are low and do not allow extending the insured areas,” he stated.

The insurance tax is set depending on the value of the insured area, the planned productivity, calculated on average for the last three years, and the forecast price of the insured products.