During debates about the 2015 grape harvest, the Georgian Dream coalition MP, Giga Bukia, talked about the steps taken by the government to encourage the field of agriculture and pointed out: "Over GEL 160 million has been invested in agricultural insurance for the grape harvest which means that from 80% to 90% of the harvest is protected from hailstorms."

FactCheck

took interest in the implementation of the agricultural insurance project.

A pilot programme for agricultural insurance has been enacted since 1 September 2014. Its main aim is to actively use the insurance system in the field of agriculture. The initial conditions for agricultural insurance were the following:  the state paid from 70% to 90% of the insurance package and in some cases even 95%. Whilst subsidising the cost of the package the state granted a maximum of GEL 30,000 for individuals and GEL 50,000 for agricultural cooperatives. All kinds of agricultural products were insured in terms of the project. The insurance included natural disasters such as:  hail, excessive precipitation, hurricanes and autumn frosts. It should be pointed out that the insurance did not refund damage caused by droughts.

According to the 19 February 2015 Directive No. 306 of the Government of Georgia, amendments were made to the pilot programme. The 2015 agricultural insurance budget was set at GEL 10 million. Four insurance companies; namely, GPI Holding, Aldagi, IC Group and Irao, participated in the agricultural insurance project in 2014. Ardi and Unison joined these companies in 2015.

Only individuals or legal entities which have a maximum of five hectares (in the case of the wheat harvest, the insurance is for a maximum of 15 hectares) of agricultural land in ownership, use or factual ownership can participate in the agricultural insurance programme. This limitation of the land area provided for by the programme does not include land possessed by registered cooperatives. The reason for the imposition of this limitation was to determine who would be insured in that the programme is focused upon insuring the harvest of low-income beneficiaries. The state subsidisation will be up to 60% in 2015. A common method for assessing crop damage is implemented according to the individual cultivars which is an innovative approach.

Over 21,000 insurance policies were distributed in 2014 in terms of the agricultural insurance programme and 34 different cultivars with a value of more than GEL 150 million have been insured. The overall area of the insured crops is 19,000 hectares.

As Giga Bukia speaks about the insurance of vineyards, the table below offers data about the area of insured vineyards in 2014.

Table 1:

Vineyards Insured in Terms of the Agricultural Insurance Programme in 2014

Cultivar Overall Value of the Harvest Percentage Share Insured Area Percentage Share
Grapes GEL 63,850,460 41.97% 5,769 Hectares 30.97%

The pilot programme for agricultural insurance will continue until 11 December 2015. As for the damage from hailstorms, an anti-hailstorm protection system was created by LEPL Delta at a cost of about GEL 14 million and enacted in the Kakheti region at the end of May 2015. A total of 83 units of autonomous fire-missile devices were installed in the region which would decrease the damage caused by hailstorms by 80%-90% according to the experts who developed the system. Hailstorms occurred in the Kakheti region only upon a smaller number of occasions after the introduction and putting into operation of the system.

We asked Military-Technical Issues Specialist at LEPL Delta, Giga Inashvili, to comment upon the work of the anti-hailstorm devices. According to his explanation, 97% of possible hailstorms have been prevented since the instalment of the devices. A total of 40 hailstorm processes (hail clouds) were observed in 2015, 37 of which were dispersed. If it were not for the anti-hailstorm devices, the damage would have been 80%-90% more.

Conclusion

Over 21,000 insurance policies were distributed in 2014 in terms of the agricultural insurance programme and 34 different cultivars with a value of more than GEL 150 million were insured. The overall area of the insured crops comprises 19,000 hectares. As for grapes, a harvest valued at GEL 64 million on 5,769 hectares has been insured. Hence, the MP states the data of grape vine insurance incorrectly.

As for protecting harvests from hailstorms, anti-hailstorm devices were installed in the Kakheti region at the end of May 2015. According to the explanation of a specialist, a total of 37 occurrences of hailstorms were prevented with damage in the region being 80%-90% more if not for the anti-hailstorm devices.

FactCheck concludes that Giga Bukia’s statement is HALF TRUE.

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