Government to pay crop insurance premiums

The Government has approved the list of risks subject to production insurance, covered by the 2006 State Budget, providing farmers with protection against production losses in such fields as plant growing and livestock breeding. The list provides for insurance coverage in case of severe drought that would cause a 30% fall in the crop; hail; low temperatures under the biological limit of resistance of plants; storms; floods; loss of animals and birds due to illness, storm, hail, flood, traumas; and slaughter of animals if necessary, according to the indications of the state veterinary Service. The insurance is available for agricultural plants and species of animals that were affected in 2006: sugar beet, corn, sunflower, vegetables, tobacco for 2006 harvest, autumn wheat and barley for 2007 harvest, grapes and fruits for 2007 harvest, swine, poultry. Info-Prim Neo specifies that in March last year, the Government subsidised 50% from the premium for most of agricultural crops and 60% – for strategic crops that bring large profits per unit of area, such as fruit growing, winegrowing, vegetable growing and sugar beet. In the state budget for 2006 there were planned15 million lei for the partially subsidy, compared to 5 mln lei in 2005. Earlier, experts in the filed told the Agency that less than half million lei were used from the allocations intended for 2005, as the farmers did not insure the crops due to the precarious financial situation, conservatism, taking into account that last years the state insured 100% the risks of agriculture, as well as the horrible practice from 93’-94’, when certain insurance companies evaded compensation for damage resulted from natural calamities. The premium payment is negotiated by each farmer with the insurance company depending on crop, planned expenses, risks for which they are insured, and makes up on average 3-5%. In case of severe drought the premium is the highest and comprises 10%. In Moldova there is a single company that provides services related to the insurance of risks to agriculture and pays premiums allocated from the public budget.