Farmers say they cannot insure crops because it's too expensive

Moldovan farmers are generally ignoring the crop insurance system because the costs are too high, and also because they don't trust it, said the participants in a seminar held at the Ministry of Agriculture and Food Industry on Wednesday. Tudor Bajura, head of the Rural Development Center, informed that over 2006-2007 less than 1 percent of Moldova's farmland was insured against bad weather. According to a survey conducted by the Statistical Institute, three-fourths of the farmers say they cannot insure their future harvest because they cannot afford it, and one-fourth say they are not sure they will be compensated for the loss. According to Bajura, whereas in the European Union the indemnities constitute 60 to 70 percent of the insurance fees, in Moldova this amount does not exceed 35 percent. Vasile Lungu, head of the crop insurance department of the “Moldasig”insurance company, says that the insurance fee is calculated taking into account the sum of the insured area, the average production for the last three years and the planned selling price of the insured crop. Under the law on subsidized insurance, the state pays 80 percent of the insurance fee, while the remaining 20 percent are paid by the farmers. The damage suffered as a result of a natural disaster is established by the representatives of the insurance firm with the assistance of a commission composed of local authorities. “If the planted field is entirely destroyed, the insurance company will cover 70 percent of the estimated damage. If the damage is partial, the calculations are made upon harvesting, with 70 to 80 percent of the lost crop to be compensated”. Over 2006-2007, there were signed more than 600 contracts for subsidized crop insurance. The indemnities paid by Moldasig amounted to 16 million lei. The seminar themed “Challenges and solutions for crop insurance in a changing climate” was organized by the Business Consulting Institute within the framework of the “National Strategy for Natural Risks Reduction and Climate Change” financed by the World Bank.