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Agriculture In Agriculture Essay

opinionated Essay
1633 words
1633 words
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Agriculture plays an important role in the economic development of the country. It produces not only food and raw material but also a large portion of the workforce is engaged in this field (more than 50% in Georgia) . Agriculture is characterized by the presence of risk factors, and hence it is very important to know how to deal with these hazards. Risk factors can be not only biological or climatic variability, as well as fluctuations in prices. Unlike other manufacturers, for farmers and also for privet companies which are involved in agriculture it is difficult to predict the revenues and therefore profits from their activities.
Therefore, insurance in agriculture is regarded as the one of the most important and effective way of rick management. It’s very interesting to look through the frameworks of insurance systems in developed countries and also study the experience of developing countries. As well the discussions about tendencies and problems related to insurance in developing countries.
As it seems half of the worldwide agriculture insurance comes for US, and less than one-third comes for Western European states. Only three percent comes for Central and Eastern European countries of the world's agricultural insurance. Downstairs on the table we can see the availability of agricultural insurance around the world.
In developed countries, there are different types of insurance systems. One of them is the privet insurance system in case of which the insurance companies provide the total compensation for losses and there is no government subsidy for premiums. This kind of insurance system works in Finland, in Germany and in France and in a few other developed countries. Private companies typically insure only certain risks...

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... as the reinsurer and they forming entire system and working with it. In this case state should have the role organizer and should put the first capital in this type of insurance companies.
The main founders of this system should be the farmers, agricultural cooperatives and peasantry, and also the farmers who have the status of an independent legal entity. I think, taking into account the situation of are in Georgia in this field, I mean, considering natural climate risks, at least in the first stage of all crops and agricultural sectors to be insured should be mandatory for government. Also, it will be interesting to divide Georgia as western and eastern parts and create the self-insurance funds or communities in these two regions. It will be more risk averse for farmers and it will diversify the risks. I will work to make deep this idea and apply to Georgia.

In this essay, the author

  • Explains that agriculture plays an important role in the economic development of the country. it is characterized by the presence of risk factors, and hence it is important to know how to deal with these hazards.
  • Opines that insurance in agriculture is one of the most effective ways of rick management. it's interesting to look through the frameworks of insurance systems in developed countries and also study the experience of developing countries.
  • Explains that half of the world's agriculture insurance comes from the us, and less than one-third from western european states. only three percent come from central and eastern european countries.
  • Explains that in developed countries, there are different types of insurance systems. private companies typically insure only certain risks, while joint (public and private) insurance includes a lot of product.
  • Explains that in eu countries share of the firms which are participating in the insurance system is different. all farms are insured in cyprus, denmark, austria and luxembourg.
  • Analyzes the literature about the agricultural insurance and different problems in developing countries related to insurance systems.
  • Analyzes the paper "agricultural insurance in latin america: where we are?" by mark wenner and diego arias.
  • Explains that spain has a combined public-privet insurance system, with 70 percent of agricultural products insured.
  • Explains that the total amount of payments made to agricultural insurance in 2003 was 550 million dollars, of which 225 million were issued by the state.
  • Explains that agriculture insurance started functioning as a mechanism of risk management tool in mexico in 1926.
  • Explains that mexican low self-insurance funds are non-profit organizations that provide no capital endowment except if they voluntarily provide some donation. the mexican case illustrates how farmer unions are dealing with different risks in agriculture.
  • Explains that the main limitations of the insurance industry in developing countries are generated from lack inexperience and lack of insurance culture. farmers don't understand the benefits from insurance.
  • Explains that one of the weaknesses of self-insurance funds is technical problems and lack of professional management skills.
  • Explains that the main goal is to find out how firms deal with risks without formal insurance companies, and how it is possible to share the risk between them.
  • Explains that georgian farmers and insurance companies need to be insured for natural disasters, such as hail and drought, because of the high risk of vineyards going bankrupt. georgia's leading insurance company aldagi bci doesn't offer agricultural insurance.
  • Opines that if we look at the experience of developing countries, there are committees or self-insurance funds providing the agricultural insurance; government come as the reinsurer and they forming entire system.
  • Opines that the main founders of this system should be farmers, agricultural cooperatives and peasantry, and also the farmers who have the status of an independent legal entity.
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