A New Law Establishing Takafol Agri
A New Law Establishing Takafol Agriculture Fund
Among other laws issued relating to farmers and agriculture, a Presidential Decree-Law was issued to establish the “Takafol Agriculture Fund” on 17 September 2014 (the "Law"),[1] the same day that the Health Insurance for Farmers and Agricultural Workers Law was passed. These laws serve to complement one another: while the Health Insurance Law seeks to help farmers in cases of ill health and disease, the Takafol Agriculture Fund (the "Fund") aims to help farmers in need following natural disasters or maladies that affect crops and harvest.
The remarkable feature of the Fund is that it operates as an insurer, but also as an intermediary between farmers and other insurers and funding sources such as banks. It also seeks to educate farmers about the importance of insurance culture, and aims to raise awareness of the methods of cultivation that help reduce agricultural risks. In terms of insurance, the Law allows the Fund to conclude insurance contracts with clients, as well as re-insurance agreements with other insurance companies. The Law leaves unspecified many details to be set by the Fund’s Board of Directors, including the types of risk covered and how to subscribe to the Fund. However, it is stated that the scope of the insurance and the maximum compensation should not exceed 70% of the Funds’ account that year.
It should be noted that the Law establishing the Takafol Agriculture Fund should be read in conjunction with the provisions of the government insurance funds found in Insurance Law No. 10 of 1981 which regulates the Fund in matters on which the new Decree is silent.
While the Fund’s resources are derived from many of the usual sources, such as insurance premiums collected, allocations from the state budget, donations, and investments, the Law stipulates that an additional allocation of 5% of the Ministry of Agriculture’s annual revenue from services shall also be made to the fund. It is not clear whether this will be deducted directly as a percentage from the fees paid for the services, or whether the allocation will result in an increase in the prices of services provided, which would suggest that the recipient of such services may end up bearing the increase.
The Law further stipulates that the Fund shall be managed by a Board of Directors to be chaired by the Minister of Agriculture and comprising members including representatives of bodies such as the Ministry of Finance, the State Council, the Agricultural Research Center, and the Development and Agricultural Credit Bank.
[1] Presidential Decree-Law No.126/2014 establishing the Takafol Agriculture Fund, Official Gazette, Issue No. 37 (bis) (c), 17 September 2014.
Among other laws issued relating to farmers and agriculture, a Presidential Decree-Law was issued to establish the “Takafol Agriculture Fund” on 17 September 2014 (the "Law"),[1] the same day that the Health Insurance for Farmers and Agricultural Workers Law was passed. These laws serve to complement one another: while the Health Insurance Law seeks to help farmers in cases of ill health and disease, the Takafol Agriculture Fund (the "Fund") aims to help farmers in need following natural disasters or maladies that affect crops and harvest.
The remarkable feature of the Fund is that it operates as an insurer, but also as an intermediary between farmers and other insurers and funding sources such as banks. It also seeks to educate farmers about the importance of insurance culture, and aims to raise awareness of the methods of cultivation that help reduce agricultural risks. In terms of insurance, the Law allows the Fund to conclude insurance contracts with clients, as well as re-insurance agreements with other insurance companies. The Law leaves unspecified many details to be set by the Fund’s Board of Directors, including the types of risk covered and how to subscribe to the Fund. However, it is stated that the scope of the insurance and the maximum compensation should not exceed 70% of the Funds’ account that year.
It should be noted that the Law establishing the Takafol Agriculture Fund should be read in conjunction with the provisions of the government insurance funds found in Insurance Law No. 10 of 1981 which regulates the Fund in matters on which the new Decree is silent.
While the Fund’s resources are derived from many of the usual sources, such as insurance premiums collected, allocations from the state budget, donations, and investments, the Law stipulates that an additional allocation of 5% of the Ministry of Agriculture’s annual revenue from services shall also be made to the fund. It is not clear whether this will be deducted directly as a percentage from the fees paid for the services, or whether the allocation will result in an increase in the prices of services provided, which would suggest that the recipient of such services may end up bearing the increase.
The Law further stipulates that the Fund shall be managed by a Board of Directors to be chaired by the Minister of Agriculture and comprising members including representatives of bodies such as the Ministry of Finance, the State Council, the Agricultural Research Center, and the Development and Agricultural Credit Bank.
[1] Presidential Decree-Law No.126/2014 establishing the Takafol Agriculture Fund, Official Gazette, Issue No. 37 (bis) (c), 17 September 2014.