NSA President Korney Bizhdov: farmers can insure livestock and crops against fires with state support

“The National Union of Agricultural Insurers calls on farmers to pay special attention to the possibility of insuring the risks of losses from fires. At the same time, the risks of loss of livestock, crops and plantings of crops are subject to insurance on the terms of state support,” said Korney Bizhdov, President of the National Union of Agricultural Insurers, commenting on the aggravation of the situation with wildfires in the country.

Measures to fight the fires were considered on May 10 at a meeting with Russian President Vladimir Putin. According to the Ministry of Emergency Situations of Russia, at present a special fire regime has been introduced on the territory of 49 constituent entities of the Russian Federation. The fire season is open in 77 subjects. The most difficult fire hazard situation arose in the Urals and Siberian Federal Districts as a result of established dry weather, which was accompanied by gusty winds up to 25–30 meters per second. Over the past two weeks, in the Kurgan, Kemerovo, Irkutsk, Novgorod, Omsk regions and the Krasnoyarsk Territory, 1,298 buildings in 72 settlements and 8 SNTs have been destroyed by fire, people have died. In total, since the beginning of 2022, more than 138 thousand fires have occurred in Russia, both man-made and landscape.

“Over the past seven years, farmers have been claiming losses from fires under agricultural insurance agreements with state support annually. Both crops and livestock farms suffer from the fire. In particular, as a result of the fires that occurred at the beginning of this year, within the framework of the agricultural insurance system with state support, three affected farms have already reported losses totaling more than 9 million rubles - two poultry farms in the Perm Territory and Mordovia lost their chicken stock, a herd of sheep died in Khakassia - said Korney Bizhdov. – At the same time, it should be noted that the damage to agricultural producers from fires is much higher, as buildings and equipment are lost. Insurance for these risks is not subsidized, but at a cost it is also affordable for farms.”

The largest losses from fires inflicted on agriculture were registered in the Trans-Baikal Territory in 2019. The damage caused to the agro-industrial complex of Transbaikalia by natural landscape fires was estimated by the Ministry of Agriculture of the Territory at 822.3 million rubles. Losses were not insured

At the same time, the situation with forest fires has been aggravated in Russia in recent years. According to the Ministry of Natural Resources of the Russian Federation, last year a record forest area was engulfed in fire - more than 10 million hectares. Economic damage amounted to 10.6 billion rubles.

“Given the importance and relevance of this topic, the NIA already came out in 2019 with an initiative to organize forest insurance in Russia, which was supported by the All-Russian Union of Insurers. As part of the concept proposed by the NSA, it was proposed to start insurance from actively used forest areas that are leased from timber merchants. The list of pilot regions included Irkutsk Oblast, Krasnoyarsk Krai and Yakutia, which expressed interest in developing the theme in response to a request from the NSA. However, the union's proposal to create an interdepartmental working group with the participation of legislators and timber merchants then did not lead to an active response in the relevant departments. NSA proposes to resume dialogue to develop an optimal model for Russia.”

Various practices of forest fund insurance, which help to minimize the financial and economic consequences of fires and natural disasters, are now implemented in the countries of Northern Europe, in China, and in some Latin American states.

“Fighting forest fires is a complex task, and insurance can be part of its solution,” says NSA President Korney Bizhdov. “At the same time, the leaders of a number of regions have repeatedly raised the issue that fires can be associated, among other things, with deliberate illegal actions of tenants of forest plots. Such a danger should be minimized by a set of measures on the part of the state. In particular, the economic model of forest management should exclude the possibility of obtaining attractive benefits for the tenant from the destruction of leased forest areas and the sale of residues.
 
According to the Federal Law N 260-F3 "On State Support in the Sphere of Agricultural Insurance", in Russia, within the framework of a centralized system, state support is provided for insurance of risks of crop production, livestock breeding and commercial aquaculture. Since January 1, 2016, a single all-Russian association has been operating in the agricultural insurance market with state support - the National Union of Agricultural Insurers. Only member insurance companies have the right to conclude insurance contracts with state support, insurance is carried out on the basis of uniform standard rules for each insurance program.