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Agricultural Insurance

Agricultural Insurance
Agricultural (or crop) insurance is purchased by agricultural producers to protect themselves from either the loss of their crop from natural disasters (such as droughts, excessive rains, storms and hurricanes), or the loss of revenue due to declines in the prices of agricultural commodities. Agricultural insurance is seen by the financial sector as a welcome risk management tool in particular in the agriculture sector, as it protects them against loan losses and their clients against potential indebtedness. 

At present, several countries in the SEMED region are in the process of checking the viability of introducing new insurance mechanisms, in particular those based on weather indices. In Tunisia, agriculture insurance is often made mandatory by banks for farmers who apply for agricultural loans and is provided by a number of private insurers, including Caisse Tunisienne de Assurances Mutuelles Agricoles (CTAMA) and the Tunisian Fund for Cooperative Agricultural Insurance. In Morocco, the Mutuelle Agricole Marocaine d’Assurances (MAMDA) provides insurance against droughts, which is also compulsory for borrowing farmers. Agricultural insurance covering hail, fire and livestock insurance may be mandatory or voluntary. In Jordan, agricultural insurance is not yet available, however regulation for an Agricultural Risk Management Fund has recently been approved. In Egypt, preparations for an index-based weather insurance are underway. 
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