According to Ravan Samedli, adviser to the Agricultural Insurance Fund, requests from farmers have sharply increased, especially in regions where water scarcity has become a persistent challenge.
Today, the Fund provides coverage for hail, fire, earthquakes, landslides, frost and similar events. The next step, experts say, is adding drought to the list – a risk that has become more common as temperatures rise and rainfall fluctuates across the country.
Speaking to News24.az, insurance expert Vusal Badalov explained that the upcoming drought-insurance model will cover losses caused by low rainfall, high temperatures and lack of soil moisture – all of which can lead to partial or total crop failure.
Two mechanisms are being considered:
1. Index-based drought insurance
This internationally used model evaluates damage not by inspecting each field, but by tracking regional weather indicators.
When rainfall or soil-moisture levels fall below a certain threshold, payouts are triggered automatically – no on-site inspection required.
2. Classic insurance model
Here, experts assess damage directly in the field. If crops have dried out or yields are lost, compensation is calculated based on actual, on-the-ground losses.
Badalov notes that implementing drought insurance would significantly reduce the financial risks facing farmers and strengthen agricultural resilience as water stress becomes a growing concern in the region.
