The International Experience of Public-Private Partnership in Agricultural Insurance

Serhiy Hasanov and Serhiy Petrukha
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Serhiy Hasanov: Financial Research Institute of the Academy of Financial Management of the Ministry of Finance of Ukraine, Kyiv
Serhiy Petrukha: Postgraduate Institute of the Academy of Financial Management of the Ministry of Finance of Ukraine, Kyiv
Authors registered in the RePEc Author Service: Sergiy Petruha ()

Ukrainian Journal Ekonomist, 2014, issue 8, 17-22

Abstract: The concept of "state support", set by Laws of Ukraine "On state support of agriculture of Ukraine" and "About the features of insurance of agricultural product with state support", is substantially narrowed to reduction by the state the costs for insurance of agricultural products. Such approach has led to the implementability of mechanism of public-private partnership now only in an atrophied form. At the same time the legislation of Ukraine foresees the row of ways of state support, privileges and special modes of taxation of Ukraine's agriculture, directed on stimulation of agricultural goods production. In the State budget of Ukraine on 2014 year on the grant of state support to agriculture it is foreseen over 2 milliards of UAH. But the state does not have possibility to protect these costs from the difficultly forecasted dependence on the weather's risks, because principle of obligatory conclusion of insurance agreement agricultural product with state support (stated in the article 3 of Law of Ukraine "About the features of insurance of agricultural product with state support") did not have a subsequent normatively-regulatory development as a condition of giving agricultural producers separate types of state support and grants, which were determined by government of Ukraine. The lack of effective mechanism of public-private partnership in agricultural insurance also constrains possibilities of development of national agriculture. Along with this, as follows from the special report of the International Monetary Fund on Ukraine, placed on its official web site, this organization intends to recommend to Ukrainian Government to abolish taxation preferences for agrarians, in particular in payment of the value-added tax. For this reason lately agricultural insurance and public-private partnership as effective mechanism of agrarian market and protection of budgetary charges for the agrarians related to state support development are out of eyeshot of public organizations, business-associations and science representatives. The article is an attempt to draw attention of the profile public to problems of the agricultural insurance market in Ukraine. The stages of becoming of the national agricultural insurance market, mechanism of public-private partnership in this sphere, rightness of the state's organizationally-prescriptive steps, concerning transformation of both insurance market and mechanism of public-private partnership in the context ontogenesis of programmatically-strategic directions of Ukraine's agrarian economy's development, as well as directions of implementation of the best world achievements in the development of methodological tools and their practical application in the national legislative-methodological field of mechanism of public-private partnership in insurance of agrarian risks were retrospectively investigated.

Date: 2014
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