AGRICULTURAL INSURANCE AND STATE GUARANTEES AS TOOLS TO SUPPORT AGRICULTURAL ENTERPRISES

Abstract

This article analyzes the critical role of agricultural insurance and state support mechanisms in ensuring the financial resilience of agricultural enterprises amid the ongoing challenges of the war in Ukraine. The current context, characterized by systematic threats – including the destruction of infrastructure, logistical constraints, and volatile costs – necessitates a robust approach to risk mitigation, making the economic security of the agricultural sector a matter of national strategic importance.
The research investigates the functional essence of agricultural insurance, distinguishing its core compensatory function from the equally vital stabilizing, preventive, and accumulative roles it plays in maintaining farmers' operational cash flow and promoting risk-reducing investments. A comparative analysis of global agricultural insurance models – including commercial, subsidized, and innovative index-based approaches – is conducted to assess their applicability to the Ukrainian market. The study confirms that financial accessibility, primarily driven by state subsidies and specialized credit programs, is the key determinant influencing farmers' adoption of insurance products, which in turn reduces systemic risk for the national economy.
Furthermore, the paper critically evaluates the existing system of state support, identifying significant methodological and legislative gaps. Key areas for improvement are highlighted: the urgent need for the actuarial substantiation of tariffs, the standardization of insurance products, and legislative clarification regarding "insurance coverage" to minimize the adverse effects of high deductibles. Crucially, the research stresses the necessity of implementing rigorous control mechanisms and setting limits on state aid per producer to prevent fraud and ensure the equitable distribution of budget funds.
In conclusion, the study provides a set of concrete recommendations aimed at enhancing the effectiveness and integrity of the subsidized agricultural insurance system. Comprehensive reform, integrating advanced models and robust controls, is positioned as a fundamental financial lever for guaranteeing the stable functioning and recovery of Ukraine's agricultural potential.