Crop insurance as a mechanism for minimizing losses in agriculture

Abstract

Introduction. In the agricultural sector, crop production depends to a significant degree on the influence of climatic factors. Adverse weather conditions impact crop losses. One of the factors mitigating the consequences of adverse climatic conditions is the insurance of agricultural crops. Agricultural insurance represents a financial instrument that reduces the influence of specific risks in agricultural production and partially compensates for damage arising from adverse events. The development of the insurance mechanism will allow agribusiness entities to reduce economic risks and will contribute to ensuring sustainable development.
Aim. To identify the influence of agricultural insurance on compensating for damage arising from adverse events of an inevitable nature.
Materials and methods. The research is based on the use of the monographic method; statistical-economic analysis and synthesis; and generalization. The information base consisted of scientific works and empirical data in the field of agricultural insurance.
Results. A lack of interest was identified on the part of insurance companies that have concluded agricultural insurance contracts in paying out the incurred damage arising from an insured event. The algorithm for concluding agricultural insurance contracts with state support was defined.
Conclusion. As a result of the research, it was revealed that the insurance of agricultural crops can be carried out by organizations independently and with state support. The majority of agricultural producers insure their crops using state support. The insurance institution has demonstrated a decline in the insurer's trust in the insurer of agricultural crops. In this regard, there is a need to strengthen state control over the activities of insurance companies not only during the subsidization of the insurance premium but also during the payment of the insurance sum when compensating for damage.

To cite: Koroleva O.V., Shirobokov V.G., Artemeva V.S. Crop insurance as a mechanism for minimizing losses in agriculture. Research in Economic and Financial Problems. 2025;4:3. https://doi.org/10.31279/2782-6414-2025-4-3