Web Desk May 1, 2021

Within the framework of the agrarian insurance mechanism applied in Azerbaijan, along with products in orchards, it is possible to insure fruit trees and shrubs separately. The difference between these two concepts is that the insurance of the garden guarantees the destruction of the harvest that year.

This was reported to AZERTAC by the Public Relations and Information Department of the Ministry of Agriculture.

It was noted that separate insurance of the tree protects the entrepreneur from the destruction of the tree. Thus, if a tree is destroyed, not only that year, it will never produce at all, and the farmer will suffer long-term damage.

To meet these risks, the agrarian insurance mechanism provides for the provision of trees (shrubs).

Farmers and orchard owners can insure their crops as well as trees.

At the time of the incident, the farmer is paid the price of the tree’s 3-year crop.

Insurance of trees and shrubs costs a very small amount and is a profitable type of insurance.

According to the rules of agrarian insurance, there are two envelopes for insurance of trees and shrubs.

The first envelope – full; fire; earthquake; landslide; hurricane; storm; risks such as the actions of third parties. In the first envelope, the insurance rate is 0.5 percent.

The second envelope – the risks of plant diseases and pests, the spread of especially dangerous pests. In the second envelope, the insurance rate is 2 percent.

When insuring trees and shrubs, the productivity of the tree (in kilograms) and the price of the product are taken into account when calculating the sum insured.

Insurance of 1 hazelnut tree

If a hazelnut tree yields 10 kilograms of hazelnuts a year and the price of 1 kilogram of hazelnuts is 3 manats, the price of the annual product of the tree is 30 manats, and the price of the 3-year product is 90 manats. Therefore, the insurance premium is calculated on the basis of this amount.

The insurance premium for the hazelnut tree (annual yield is 30 manat) is as follows:

Insurance premium = 90 manat (3-year product price) X 0.5% (insurance rate) = 45 kopecks.

In other words, the insurance of a hazelnut tree or shrub that produces 30 manats a year costs only 45 kopecks.

Half of this amount, ie 22.5 kopecks, is paid by the farmer himself, and the other half – 22.5 kopecks – by the state.

Insurance of 1 orange tree

An orange tree that produces 50 kilograms a year produces 60 manats a year (if 1 kilogram of oranges costs 1.2 manats) and 180 manats in three years.

Taking into account this amount and insurance rates, insurance of one orange tree costs only 90 kopecks.

Half of this amount, ie 45 kopecks, is paid by the farmer himself, and the other half – 45 kopecks – by the state.

Insurance of 1 tangerine tree

The mandarin tree, which yields 50 kilograms a year, also yields 60 manats a year (if 1 kilogram of mandarins cost 1.2 manats) and 180 manats in three years.

Taking into account this amount and insurance rates, insurance of one tangerine tree costs only 90 kopecks.

Half of this amount, ie 45 kopecks, is paid by the farmer himself, and the other half – 45 kopecks – by the state.

 

Source:  Azerbaijan State News Agency

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