In 2025, agricultural insurance becomes increasingly important for Ukraine’s agrarian sector. With climate change, unpredictable weather, and ongoing war, protecting future harvests is not only desirable, but also a matter of survival for business stability.
In this article, we will take a closer look at how agricultural insurance in Ukraine works, which crops are covered, what types of insurance contracts exist, what is included in coverage, how state support works – and what to look out for when choosing an insurance provider. We will also pay special attention to insurance nuances during martial law.
Contents
What is agricultural insurance?
Agricultural insurance is a financial protection mechanism for farmers in the event of crop loss or income reduction due to natural disasters, adverse weather, or third-party actions. In 2025, when Ukraine’s agricultural sector operates under climate challenges and martial law, this tool becomes critically important for sustaining farm viability.
The essence of agricultural insurance is that a farmer signs a contract with an insurance company, which undertakes to reimburse part of the losses if an insured event occurs — for example, hail, drought, prolonged rains, crop diseases or fire.
These insurance programmes cover both full and partial loss of yield, and in some cases — even the production costs or forecasted income.
In Ukrainian practice, agricultural insurance covers the following crops:
- wheat;
- rye;
- barley;
- oats;
- maize (corn);
- soybeans;
- rapeseed;
- sunflower;
- flax;
- hops;
- sugar beet;
- fruit and berry trees;
- vineyards;
- other crops — depending on specific programme terms.
Farmers can insure their crops either for a single season (e.g., winter crops) or for the full cultivation cycle. Arranging such coverage also improves access to credit — banks are more willing to lend to farms with insurance, as it significantly reduces risk.
Specifics of agricultural insurance in Ukraine
Agricultural insurance in Ukraine has several distinctive features tied to legal regulation, definitions of insured events, and the procedure for receiving compensation. As of 2025, the sector remains state-regulated, with key support mechanisms outlined in current legal acts.
The primary legislative act is the Law of Ukraine “On the Specifics of Agricultural Production Insurance with State Support” dated 18 January 2025. The law underwent major amendments: the ineffective Agricultural Insurance Pool was abolished and replaced with a new system enabling farmers to obtain coverage directly, without intermediaries.
Another key document is the Cabinet of Ministers Resolution dated 9 December 2021, which approved the Procedure for Providing State Support for Agricultural Insurance. This document outlines the mechanisms for using budget funds, the list of insurable products eligible for state financing, and the conditions for agricultural producers.
A unique feature of Ukrainian agricultural insurance is the procedure for verifying insured events. Independent state agencies are involved to provide an official, objective assessment of damage:
- Ukrainian Hydrometeorological Centre confirms weather phenomena such as drought, hail, frost or windstorms.
- State Emergency Service of Ukraine verifies the consequences of emergencies, including fires, flooding or landslides.
- State Plant Protection Inspectorate determines cases of crop damage due to diseases or pests.
Legislation defines an insured event as either total or partial loss of insured crops or yield, or deviation of weather or yield indicators from a fixed contract index.
This means that farmers can choose either classic crop loss insurance or index-based insurance — tied to regional average data.
Moreover, the state co-finances the cost. Under the current model, up to 60% of the insurance premium can be reimbursed to the farmer from the budget — provided that the insured event is confirmed and contract terms are met.
Types of agricultural insurance in Ukraine
In 2025, Ukrainian farmers have access to several types of agricultural insurance, which differ by coverage object, compensation calculation method, and premium cost. The choice depends on farm size, financial capacity, crop type, and regional risks.
The most common option is classic yield insurance, which provides compensation if part or all of the harvest is lost due to weather or other unforeseeable events.
For more advanced financial planning, input cost insurance is also available: in this case, the farmer receives reimbursement for incurred production costs, even before harvest. More complex mechanisms — such as income insurance or index-based insurance — are still used to a limited extent due to the need for detailed statistics and high implementation costs.
Main types of agricultural insurance available in Ukraine:
- Production cost insurance – covers only the costs of crop cultivation (seeds, fertilisers, treatments), but not the value of the yield itself. Suitable for small-scale farms or during unstable periods.
- Yield insurance – compensates for the loss of expected yield. The contract specifies product price, risk profile, and technological map.
- Income insurance – the most comprehensive form of protection, covering not only the physical volume of output but also changes in market prices. It is expensive and complex, and thus rarely used.
- Index-based insurance – payouts depend on average regional indicators (e.g. yield levels, weather). It is available based on weather indices or yield indices.
- Winter survival insurance for overwintering crops – covers the risk of crop failure during the cold season.
- Named-peril insurance – allows farmers to insure against one or several specific risks (e.g., only hail or drought). It’s a budget-friendly option for those with limited resources.
All types of contracts may be arranged for a single season or a full agricultural cycle. The broader the coverage — the higher the premium, but accordingly, the greater the level of protection. Many insurance providers also offer customisable packages tailored to specific crops and regions.
Crop insurance risk profile
In 2025, agricultural insurance in Ukraine covers the most common threats faced by farmers: natural, climatic, man-made, and even social. Given the increasing climate instability and wartime situation, the relevance of such protection has increased across all regions.
The main risks covered by insurance contracts relate to weather conditions. These include heavy rainfall, prolonged precipitation, hail, frost, drought, windstorms, and other natural disasters. In some cases, earthquakes, landslides, or mudslides may also be covered. Crops that freeze during winter or die due to rotting, waterlogging, or temperature swings are also at risk.
Beyond natural phenomena, contracts often include compensation for losses caused by fires, plant diseases, and pest infestations. Another important aspect is the inclusion of third-party illegal actions, such as theft or intentional crop destruction.
The occurrence of an insured event must be officially confirmed by the relevant state agencies. The Ukrainian Hydrometeorological Centre certifies weather events; the State Emergency Service confirms natural disasters; and the State Plant Protection Inspectorate assesses diseases and pest damage. This ensures transparency and eliminates subjectivity in compensation calculations.
Each insurance contract is drafted individually, taking into account regional specifics. For instance, farmers in the south typically insure against drought, while those in the west focus on hail and excess moisture. This allows farmers to avoid paying for unlikely risks and concentrate on real threats.
Crop Insurance During Wartime
Martial law has significantly changed the realities of agricultural business in Ukraine. Farmers now face not only natural risks, but also direct threats from warfare: shelling, landmines, destruction of machinery and infrastructure. This has become a serious challenge for both the insurance market and state agricultural policy.
Despite the difficult circumstances, agricultural insurance remains in force. According to a statement by the Ukrainian Chamber of Commerce and Industry dated 28 February 2022, the war is officially recognised as a force majeure event. However, this does not automatically release insurers from their obligations. If crop loss is caused by weather events, diseases, or other risks listed in the contract, the farmer is fully entitled to an insurance payout — even during martial law.
The key issue is proving causal linkage. If the damage resulted from non-military causes (e.g., drought), the insurance company is obliged to pay compensation under the terms of the contract. Conversely, if war-related damages are not explicitly covered in the contract, such losses are not considered insurable events.
Currently, only a few insurers in Ukraine are willing to cover war-related risks — typically with the involvement of international donors or as part of specialised programmes. This is due to the enormous losses already recorded in the sector: according to the World Bank, as of early 2024, Ukraine’s agricultural sector had suffered over $8 billion in direct losses, with half attributed to destroyed equipment, warehouses, and farmland.
At the same time, mechanisms for insuring political and war risks are under development. For instance, the United States Agency for International Development (USAID) has initiated the creation of such insurance concepts specifically for Ukraine. Surveys among international investors show that 89% of companies would consider investing in Ukraine if comprehensive war-risk insurance was available.
Thus, while the war has made full coverage more complicated, it has not eliminated insurance altogether. Farmers can and should use the existing mechanisms, and carefully review contract conditions to ensure they remain protected against unforeseeable events.
How state-supported crop insurance works
In 2025, Ukraine continues to implement a state support mechanism for agricultural insurance, allowing farmers to recover part of their insurance costs. This is especially important for small and medium-sized farms operating in high-risk zones that lack internal reserves.
The basis for this support is the Law of Ukraine “On the Specifics of Agricultural Production Insurance with State Support”, which sets out the rules for state co-financing of insurance premiums and the conditions under which compensation can be granted.
According to the law, the state may reimburse up to 60% of the insurance premium, provided that the insured event matches the contract conditions and that the agreement is formally compliant.
Importantly, compensation is not automatic. To qualify, the farmer must sign a contract with an accredited insurance company experienced in agricultural risks, and submit a document package to the relevant authority (typically through the regional agricultural department or Administrative Services Centre). Required documents include a copy of the contract, proof of partial premium payment, agrotechnical documentation, and confirmation of the insured event.
Funding depends on annual budget allocations, meaning that reimbursement capacity is seasonal and limited. Farms are therefore advised not to delay their applications and to be mindful of submission deadlines.
Thanks to this system, even resource-constrained farmers can access insurance, reduce exposure to climatic and force majeure risks, and stabilise their financial position. This tool is an integral part of Ukraine’s long-term agricultural support strategy under the dual pressure of ongoing war and global challenges.
Tips for crop insurance
Taking out agricultural insurance is not merely a matter of signing a contract — it requires thorough analysis, planning, and caution. In 2025, with increasing natural and economic risks, farmers need a more strategic approach to protecting their harvests.
In the sections below, we’ll examine how to approach insurance smartly: where to begin, how to assess risks, what to look for in an insurer, and which contract clauses may be critical in the event of a claim.
Assessing harvest risks
Before signing an agricultural insurance contract, a farmer should first assess the specific risks relevant to their farm and region. This is a crucial first step that determines not only the effectiveness of the policy but also its economic viability.
Climatic conditions in Ukraine vary significantly by region. In the south, drought remains the main threat; in western areas, prolonged rains, hail, or winterkill are more common. In combat zones, there is also the physical risk of damage to crops from shelling or landmines.
To assess risks accurately, farmers should consult their regional hydrometeorological centre and review weather data for the past 3–5 years. This will help identify the most frequent natural events and their impact on yield. It’s also essential to factor in the technical specifics of the farm — such as crop sensitivity to humidity, wind, or temperature fluctuations.
Risk assessment is not just retrospective. It should also account for current weather forecasts, the growth stage of crops in the field, and emerging threats such as pest outbreaks or escalating military tensions in the region.
Only after this step should one proceed to select the type of insurance product that best matches the farm’s conditions and provides genuine protection in the event of a claim.
Choosing an Insurance Company
Choosing an insurance provider is one of the most important decisions in the process. Even with a good product, a poorly chosen insurer can delay or withhold payouts. Farmers must treat this decision as carefully as they would when choosing seeds, machinery, or fertiliser suppliers.
Key factors to consider:
- Experience with agricultural risks – Agricultural insurance is highly specialised. The insurer should have proven experience, with in-house agronomists or agricultural consultants.
- Claims payout history – A company’s reputation depends not on how many policies it sells, but on how many claims it has paid. Trustworthy insurers publish this data openly.
- Transparency in contracts and communication – A good insurer clearly explains all conditions, provides sample contracts, and does not avoid difficult questions.
- Licensing and participation in state support programmes – If you plan to claim a premium subsidy from the government, the insurer must be formally accredited for such programmes.
- Verified local reviews – Talk to farmers in your region who have worked with the insurer. This is often the most reliable source of practical information.
When a farmer selects an insurer, they are essentially choosing a partner for times of crisis. Whether the farm receives timely support in a difficult moment depends on the quality and integrity of that partner. So it’s worth investing time in due diligence, not just comparing prices.
Contract signing conditions
The insurance contract is the legal foundation of your protection. Regardless of the product type, it defines the limits of liability, the process for verifying insured events, and the payout procedures. Careful review of the contract is essential.
Start by scrutinising how risks are defined. The more specific and unambiguous the wording, the easier it will be to prove the occurrence of an insured event. Vague or generalised language can work against the farmer in a dispute.
Equally important are the rights and responsibilities of each party. The contract should clearly outline what actions the farmer must take in the event of crop loss: whom to notify, in what timeframe, and what documentation to provide. It should also define how damage is assessed — who conducts the inspection, which authorities verify the loss, and what data they must provide.
Review the compensation calculation method: are market prices fixed at the time of contract signing, or at the moment of loss? Does the average yield from past seasons apply? Are expenses for sowing, fertilisers and treatments considered — and are they listed in the agrotechnical documents?
The contract must state the premium amount, payment schedule, and terms for termination or claim denial. Pay special attention to the liability limitation clauses — even minor breaches of cultivation protocols can sometimes be used as grounds for denying a payout.
Typically, insurers conduct a pre-contract inspection of the crops. This procedure documents the actual crop condition and serves as the legal basis for damage assessment. If this step is skipped, proving losses later can be difficult.
Conclusion
In 2025, agricultural insurance in Ukraine is not just an optional service, but an essential tool for the survival of agribusinesses. Amid climate threats, economic instability and war, it provides farmers with financial stability, improves trust from banks and partners, and allows them to focus on their core mission — growing crops.
Ukraine’s insurance system already has a solid legal foundation, state support mechanisms, and tailored products that cover both weather-related and — to a limited extent — political risks. But the system’s effectiveness depends primarily on the farmer: on their approach to risk analysis, insurer selection, and contract clarity.
