RUSSIA: new procedure for financing agriculture development effective from January 1, 2020

13 January 2020 — Marina MAGNAVAL
On January 1, 2020, a new procedure for financing the State program for agricultural development entered into force. The procedure provides targeted subsidies for regions to support agroinsurance, considering insurance practices of each region, as the National Association of Agriculture Insurers (NAAI) informed.

Two types of subsidies have been introduced - the compensatory, aimed at general support of agriculture, and stimulating, with the role to support the development of certain lines of production, considering the priority for each region.

"In 2020, the Ministry of Agriculture of Russia allocated RUB 2.2 billion (~EUR 32.33 million) to finance agroinsurance, but this amount may be increased to RUB 4.2 billion if the regions declare an expanded need for these funds. This position of the Russian Ministry of Agriculture was announced at a meeting on December 17, 2019 and creates a stable basis for the development of agroinsurance", said Korney BIJDOV, President (NAAI).

According to NAAI, as of December 1, 2019 (11 months ended), in Russia almost 6% of crops and over 18% of livestock were insured with state support. One of the goals of developing the agroinsurance system is to achieve a coverage of at least 40% of crops against risks of nat cat events.

* EUR 1 = RUB 68.0450 (as of 11.01.2019)

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