Agricultural Insurance as a Factor of Sustainable Agricultural Development

Abstract

Producers of agricultural products face various risks that can disrupt the production cycle. Agricultural insurance is inextricably linked to the peculiarity of agriculture—the cultivation of crops is directly dependent on the weather and natural disasters. In this regard, farmers who have insured their crops can count on insurance compensation for losses incurred. The likelihood of bankruptcy and insolvency of agricultural producers can lead to a significant reduction in crop production, a decrease in product quality, and an increase in food prices. The level of national food security is directly influenced by the level of financial well-being of agricultural producers, where one of the factors ensuring it is the use of such an instrument as agricultural insurance. Government support for agricultural insurance stimulates the development of the insurance market and increases the competitiveness of Russian products in the Russian and international markets. The conducted research assesses the current state and trends in the development of agricultural insurance in Russia. The role of state support of farmers as a factor of risk minimization in conditions of macroeconomic instability is substantiated. This research aims to comprehensively analyze the functioning and operation of the new system of agricultural insurance in today’s conditions to substantiate the need for its use and assess the impact on the sustainable development of agricultural production. The theoretical basis of the research was formed by studies on the development of agricultural insurance. Additionally, the authors assessed state support in terms of insurers’ participation in this segment of the insurance market. The market analysis, with a reflection on the infrastructural participants, made it possible to identify disadvantages, namely the high cost of insurance premiums, a limited list of insurable risks, and low efficiency of payments upon the occurrence of the insured event. The authors developed proposals for the elimination of drawbacks. The main proposals are related to the improvement of methods of making payments to agricultural producers to speed up the algorithm of their receipt processing and increase the efficiency of document flow between the insurer and the agricultural producer.