Armenian farmers balking at insuring crops – why?

Armenia’s first state agricultural insurance scheme has led to something of a disappointment: operating since October 2019, the programme drew the interest of just 50 farmers who elected to insure their crops and farms – this despite the fact that in the past six years, natural disasters have cost the Armenian agricultural sector 110 billion drams ($230 million) in damages.

The insurance programme offered policies via three insurance companies, and offered farmers to ensure apricots and grapes against damage caused by frost, fire and hail. Moreover, only several regions in Armenia were targeted.

• Armenia’s potato queendom: a female-dominated industry

• Abandoned farmland in Armenia will be given over to farmers ready to work on them

To encourage interest, the government offered to pay half the insurance premium, which was to be financed by a five-million euro grant from the German KfW bank.

Farmers have not taken to the idea of insurance, likely because the premium is high: to ensure one hectare of apricot orchards costs 400,00 – 1,200,000 AMD (about $840-2520), while for grapes the premium ran 750,000 to 1,800,000 AMD ($1570-3770).