At the present time in Greece, there is no legal or “trade” requirement to provide insurance cover for facilities or stock in fish-farming. In many enterprises, as in other forms of agriculture, risk is entirely covered by the farm owner, whether an individual or a company. However, the Agricultural Bank of Greece has taken a major role in financing agricultural enterprises and has a policy of encouraging, but not forcing, its clients to insure their investments against losses. Insurance can then be provided through the Agricultural Insurance Company, a company jointly owned by the Agricultural Bank and the major agricultural unions and the only insurance company involved in the aquaculture field in Greece at the moment.
Though the National Development Bank has apparently given loans to certain of its clients for aquaculture purposes, the Agricultural Bank has by far the major involvement in this area. Under law 1262 of the Greek parliament, the bank can make its own decision on the approval of such loans up to 40 million drachmas in value, but over this figure, the Ministry of Finance is also consulted. Equity capital can be provided for enterprises with up to 70 tonnes production of up to 80% and running costs can similarly be provided up to 80%. For larger enterprises and large company involvement, up to 70% loans can be provided for this purpose. As already mentioned, the Agricultural Bank is the principal bank involved in aquaculture at the moment, but legal changes in progress at present should allow much wider involvement of other banks in this area from 1992 onwards.
The Agricultural Bank is so far, the only bank to employ staff (with overseas experience) trained in aquaculture and has a policy of providing training courses for both bank employees and aquaculture workers in bank-financed enterprises. Furthermore, the bank is an actual partner (usually with various development societies) to the extent of 25–30% value in a number of aquaculture enterprises and trains its employees to lead and develop such enterprises (see “Training”). Another major government body closely involved in providing capital as a partner in developing agriculture enterprises is the Ministry of Industry, Energy & Technology.
Risk assessment in other agricultural areas is carried out on behalf of the bank by an “Association of Experts”. For aquaculture enterprises, a formal association of experts does not exist, but the bank uses a number of experienced people in Greece to “vet” its aquaculture proposals and sites. Insurance was first provided some two years ago when limited cover was given to two farms. Approximately 12 further proposals are at present being considered by the Agricultural Insurance Company and it is predicted that between 50–80 farms will be insured in two to three years' time. As mentioned, loans are provided by the bank without the stipulation of accepting insurance. This is partly because the premiums demanded at the moment are quite high due to the lack of experience of the aquaculture industry and of the insurance industry in this area. The insurance company has paid out claims in the aquaculture field, but these losses have principally been due to storm damage, physical damage and water quality defects. The insurance company covers its own risks by reinsuring with international companies in this field, particularly the Munich Re-Insurance Company with whom the company has a long-standing relationship in agricultural reinsurance.
Insurance cover is provided in a number of forms from an “all-risks” type of cover to specified perils only and may or may not include disease cover. The type of policy provided is intended to be straightforward and easy to understand, the intention being to build up confidence in insurance, to ensure that people are aware of the extent of their cover and to expand the insurance business and thereby reduce the premiums paid by each individual farm. In this respect, arguable entities such as the “normal trade mortality” are not specified but are included in a previously-agreed “deductible” figure, this deductible figure also being the franchise level for any claim. Aggregate losses are not covered and there is a “duration” clause limiting the extent of any one incident. The technical staff of the bank and the insurance company are used to survey sites and there is generally a stipulation in the insurance policy that the farm employs a full or part-time ichthyologist. On-growing sites, but not hatcheries, are covered at the present time and there is no specification for the provision of the services of a fish pathologist or veterinarian connected with the farm.
Losses are generally investigated by the company's own loss adjusters but independent loss adjusters are available should there be a particularly large or doubtful claim.
Suggested Developments/Improvements
1. It is commendable that purchase of insurance is not a pre-requisite to the approval of a loan for fish-farming development. The policy of encouraging fish-farmers to take out insurance is a good one and has been well proven in the development of aquaculture in other countries. Experience of losses, whether covered by insurance or not, will doubtless dictate future policy and it may be that such insurance cover will become a pre-requisite to obtaining a loan in future. The bank and insurance company are well aware of the options and will doubtless provide the correct solution to allow the proper development of the industry.
2. The cost of premiums is high at present due to the lack of experience in insurance in this field in Greece. It is suggested that it may be appropriate that a grant is provided from a governmental body such as the Ministry of Agriculture to pay for a part of the premium and thus encourage proper insurance cover of the risks in aquaculture. This could be carried out on the same basis as that already in existence for insurance of small fishing-boats.
3. Losses from disease have not been very great to the present time. This parallels the experience in aquaculture development in many other countries. Principal sources of loss from disease, which can be considerable, generally arise from:
the introduction of new stocks or species from other countries and
intensification in the industry.
The former source is not only a risk to farmed species of fish and shellfish but may also constitute a threat to wild stocks and must be carefully controlled by legislation. This subject is dealt with in detail under that heading.
The latter source is inevitable if the industry is to be efficient and competitive. It is essential that, during early development of sites, overstocking is avoided and great care is taken in site selection to provide good water quality and farming conditions. Sites should also, as far as possible, remain distant from one another to avoid direct transfer of disease agents through water, wild or escapee fish and waste transfer. However, as the industry expands, there will be pressure to create sites closer and closer together as optimal sites decrease in number and efficient use of labour requires sites owned by the same company to be not too far apart.
There will certainly be a need for careful disease monitoring, partly provided by the farms themselves and partly by governmental and/or private veterinary bodies.
This will be necessary, not only to treat disease outbreaks at the earliest opportunity, but also whenever possible to prevent such problems developing. This subject is discussed further elsewhere under the heading of diagnostic services.
Insurance cover should reflect this development and at some future stage, should stipulate the provision of suitable monitoring services, both in terms of disease and environmental monitoring. Management experience and development should also allow the provision of better husbandry conditions and control, a major factor in reducing the incidence and impact of disease.
