WB to bolster agricultural insurance in Azerbaijan
By Fatma Babayeva
The World Bank Group is ready to support the development of the agricultural insurance in Azerbaijan, said Rolf Behrndt, manager of the World Bank Group's finance and markets practice.
He made the remarks at the meeting with Rufat Aslanli, head of the Board of Directors of Azerbaijan's Financial Market Supervisory Body in Baku.
The implementation of the project in agricultural sphere has been planned jointly with the International Finance Corporation (IFC- a member of the World Bank Group), which has already sent its offers to the Azerbaijani government.
Within the framework of the project, the IFC aims to share best practices and experience in creating an effective system of insurance for farmers against the weather risks with the government and private sector, to assist the management of this process at all levels and to create a legal basis.
Behrndt noted that the draft law on the establishment of private credit bureaus in Azerbaijan is underway, as well as the duration of technical assistance activities on consumer protection and increasing financial literacy has been prolonged until October 2016.
During the meeting, the progress of the project on modernization of Azerbaijan's financial sector was discussed by the sides.
Aslanli stressed that a very effective business relationship has been created between the WB and the newly-created Financial Market Supervisory Body. He also expressed interest in establishing private credit bureaus in the country.
The data collected in these bureaus will help effective regulation of the banking sector in the future, he added.
The parties also discussed the progress of the project on providing financial services to the national postal operator Azerpost LLC, the cooperation in development of insurance sector in Azerbaijan.
In March 2011, the World Bank approved a loan for Azerbaijan worth $12 million for the implementation of the Capital Markets Modernization project. Total cost of the project amounts to $15.8 million.
Besides the WB loan, the State Secretariat for Economic Affairs of Switzerland (SECO) has allocated a grant worth $1.6 million and the Azerbaijani government allotted $2.2 million for the project.
The development of agriculture is one of the priority directions for Azerbaijan to boost the non-oil sector and to diversify its national economy. The country achieved 6.6-percent growth in the volume of agricultural production in 2015.
Azerbaijani government supports agricultural sector at the state level and implements various agricultural projects aimed at increasing volume of domestic production and decrease dependence on the imported goods.
Farmers are provided with high quality seeds and fertilizers and a discount on the initial cost of the agricultural equipment.
The government provides farmers with subsidies for fuel and engine oil as well.
A great importance is attached to the modern irrigation systems which will enable the country to move from the traditional method of irrigation - which leads to salinization and disintegration of soil - to the modern method of irrigation that saves water resources
Moreover, the country is keen on developing electronic agriculture, an emerging field focused on enhancing agricultural and rural development through improved information and communication processes.
E-agriculture involves the conceptualization, design, development, evaluation and application of innovative ways to use information and communication technologies in the rural domain, with a primary focus on agriculture.
The agricultural sector is important in Azerbaijan not only to increase export potential, but also to restore and protect the country’s food security.
Enjoying advantageous geographic location Azerbaijan has all possibilities to increase food security and production in the country.
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Fatma Babayeva is AzerNews’ staff journalist, follow her on Twitter: @Fatma_Babayeva
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