Indemnities to Russian farmers for losses due to extreme weather event losses: the challenges and opportunities
¹Рeoples’ Friendship University of Russia (RUDN University), Agrarian Technological Institute, 6 Miklukho-Maklaya Str., RU117198 Moscow, Russia
²Saratov State Vavilov Agrarian University, Department of project management and foreign economic activity in the agro-industrial complex, 1 Teatralnaya square, RU410012 Saratov, Russia
³Kuban State Technological University, Department of Economics and Finance, 2 Moskovskaya Str., RU350072 Krasnodar, Russia
⁴Plekhanov Russian University of Economics, Specialized Department of Commercial Policy, 36 Stremyanny lane, RU117997 Moscow, Russia
⁵Financial University under the Government of the Russian Federation, Department of Economic Theory, 49 Leningradsky avenue, RU125167 Moscow, Russia
⁶State University of Management, Department of economics and management, 99 Ryazansky Prospekt, RU109542 Moscow, Russian
⁷Kutafin Moscow State Law University, Department of Management and Economics, 9 Sadovaya-Kudrinskaya Str., RU125993 Moscow, Russia
*Correspondence: novla@list.ru
Abstract:
The paper aims to examine indemnity payments to Russian farmers for weather-related loss. Indemnity payments can be made as crop insurance payments or direct payments from budget. The manuscript presents the official data on damage caused by extreme weather and the amount of insurance payments and direct payments to farmers for the years 2005–2021. To process the results of our research, we performed correlation and regression analysis using STATISTICA package. We presented the results of the research in tabular and graphical forms. The research revealed that the average proportion of insurance payments for crop losses in indemnity payments to farmers is 22.1%, and direct payments from budgets of various levels amount to 25.7%. Indicatively, 52.2% of damage remains uncompensated. According to findings, RUB 1 billion in premium subsidies raises insured area by 0.14% under a steady trend, while other factors result in reduction by 1.1%. The paper reviews the barriers that hinder the development of subsidized crop insurance. We propose a series of measures that can promptly improve the current situation, such as the stabilization of the legal framework, a tighter control over insurance rates and the need for authorities to stem corruption. We also note that in setting insurance rates, it is important to consider the farming techniques, selective breeding potential, and adoption of index insurance.
Key words:
budget, crop cultivation, crop insurance, indemnity, loss, risk