Azerbaijani minister: There is not enough data yet to apply drought insurance

There is not enough data yet to apply drought insurance, Azerbaijani Minister of Agriculture Majnun Mammadov said in an exclusive interview with Report.

“There is an agrarian insurance system that has been operating for several years with the mechanism of public-private partnership. Currently, the number of insured plants has been increased to 41 species. Livestock, including dairy cattle, and beef cattle are also insured. However, agricultural insurance indicators are still characterized by the results of the initial stage. For example, in 2023, 46,500 contracts were signed, which covered 429,000 ha of arable land and 7,901 head of animals. However, there is a positive point here, as a generalized indicator, collected insurance premiums exhibit growth dynamics every year compared to previous years, which in turn shows that farmers and entrepreneurs benefit from insurance services,” the minister said.

“At the moment, measures are being taken to expand the provision of insurance services to the agricultural sector due to the increase of the insurance subject and the number of insurance risks. There is not enough data yet to apply drought insurance. For this reason, the risk probability in any area, its scope and the damage it can cause cannot be calculated. In such circumstances, the application of this type of insurance exposes the insurance institution to the risk of not being able to meet its insurance obligations and may lead to the bankruptcy of the insurance institution. In this case, other insurers will also lose. For this reason, drought insurance can be applied over time as reliable and measurable data is collected,” said Majnun Mammadov.

You can read the full interview here.