Ukraine studies Alberta crop insurance

Farmers in Ukraine have much in common with their counterparts in Central Alberta: similar growing conditions and crops, and adverse weather like hail and drought.

Gary Reusche

Farmers in Ukraine have much in common with their counterparts in Central Alberta: similar growing conditions and crops, and adverse weather like hail and drought.

A key difference is the absence of an effective crop insurance program in the former Soviet republic — a shortcoming Gary Reusche says is stifling agricultural development.

Reusche is manager of an International Finance Corporation project to establish an agri-insurance system in Ukraine. The Canadian International Development Agency (CIDA) is a partner in the initiative.

Last week, Reusche led a Ukrainian delegation to Central Alberta for a first-hand look at how farmers here are protected by insurance. Representatives of the Ukrainian ministries of finance and agriculture, a parliamentary committee developing new agri-insurance laws, a farmer association and an association of insurance companies were among the dozen people who took part.

Their stops included the Agriculture Financial Services Corp. headquarters in Lacombe, a weather station at Olds, the Rahr Malting Canada Ltd. plant at Alix and Edgar Farms near Innisfail. They also spoke with farmers and people who help administer crop insurance here.

“They now really can associate all of these concepts with something concrete,” said Reusche of the impact of the tour.

Developing a similar system in Ukraine is of critical importance, he added.

“Obviously, a farmer has investments in a crop, and if there’s bad weather he has trouble either paying back credit or even staying in business.”

Unfortunately, the eastern European country continues to suffer the effects of decades with a centrally planned economy.

“When the shift came to a market economy, there was none of these market-type structures like agri-insurance upon which to develop a program,” said Reusch. “So they basically knew very little about this in the context in which agri-insurance operates.”

Since Canada is a world leader in agri-insurance, and CIDA was willing to help, this country became the model to emulate. Rick McConnell, a former AFSC employee, is the project’s technical adviser.

Reusche described McConnell as an agri-insurance “guru.”

The benefits of an effective insurance program would extend beyond farmers, pointed out Reusche. It should also help Ukraine realize its potential as a major contributor to the global food supply.

“One of the reasons CIDA likes to work in Ukraine is because it plays a role in international food security issues,” he said, stressing the importance of feeding a growing population.

“The financial crisis came along, and the food crisis kind of got buried, but it’s still there.”

An agri-insurance program in Ukraine might also prompt a closer look at reasons for production losses and how to minimize these. For instance, said Reusche, winter kill is a big problem that might be addressed if attention is focused on the issue.

The process of developing an agri-insurance system — including the laws, processes and people to support it — is a daunting task, he acknowledged. But progress is being made, with an insurance product for wheat already being unveiled in Ukraine.

“This is something that I think Canada should be proud of,” he said of this country’s support. “This is real assistance to a country that needs it.”

hrichards@bprda.wpengine.com

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