Development of Agricultural Insurance of Crop Production in Regions of Southern Russia

Abstract

State-supported agricultural insurance is a financial policy imperative in agricultural development. The purpose of the article is to study the current state of the development of agricultural insurance of crop production carried out with the state support of the regions of Southern Russia in order to determine the possibilities of expansion of its scope and increase of its accessibility. It was concluded that there had been significant changes in the market during the period under review. The article presents the analysis of agricultural insurance on the example of crop production carried out with the state support of Southern Russian regions. After 2014 there was a decrease in the activity in agricultural insurance both by insurers and insured. The dominant reason for a considerable drop in insurance in crop production has been the transformation of forms of state support for agricultural producers since 2017. It is the transfer to a “single subsidy”, which included all types of industry support costs that lead to the inability to pay crop insurance premiums in many regions, in particular South Russia. It should be noted that since 2016 there has been a decrease in the number of insurance copmpanies that have carried out insurance with state support. This was a result of the tightening of control over insurers by the Bank of Russia and the emergence of a mandatory requirement of membership in the National Union of Agricultural Insurers to those insurance companies that insured producers with government support. Thus, the changes of the terms of insurance subsidies became a threat to this form of support. Recently, there has been some modification of this form of support for the industry, and the task of the state is to consolidate this trend. The study concluded that the attraction of more insurance companies to regional markets, involvement of representatives of medium and small businesses in the agricultural risk insurance system, increased flexibility of insurance conditions with state support and improved quality of insurance payment procedures, possibility to independently determine the increasing factor for arable lands, compensatory subsidies written into agricultural crop insurance contracts will facilitate the access to this measure and expansion of this form of support.