GEORGIA'S AGRICULTURAL INSURANCE MARKET AND DEVELOPMENT PROSPECTS

Agricultural insurance represents one of the key mechanisms ensuring the sustainable development of agriculture and the financial stability of farmers. In Georgia, the state-subsidized agricultural insurance program has been in operation since 2014 and covers risks such as hail, storms, excessive precipitation, and early autumn frost. The state-subsidized program implemented since 2014 has made a significant contribution to the establishment of a risk management system in the sector and to raising farmers’ awareness. However, the agricultural insurance system is still in a stage of development and requires further improvement at the institutional, technical, and organizational levels. The main challenges remain the low coverage of the program, the insufficient number of meteorological stations, and the geographical concentration of insured land plots in high-risk regions. This trend creates the risk of adverse selection and limits the even nationwide dissemination of the agricultural insurance program. Overcoming these challenges requires close cooperation between the public and private sectors, the harmonization of agricultural insurance policy and practice, the introduction of a unified damage assessment methodology, and the strengthening of farmer awareness and information. In addition, it is advisable to develop new insurance products and financial incentives, taking regional specificities into account, which would encourage the involvement of small and medium-sized farmers in low-risk regions as well. Such an approach will contribute to the comprehensive development of the agricultural insurance system, ensure the economic security of farmers, and enhance the competitiveness of the agricultural sector, which ultimately constitutes a foundation for the country’s economic sustainability.