FINANCING AGRIBUSINESS: INSURANCE COVERAGE AS PROTECTION AGAINST CREDIT RISK OF WAREHOUSE RECEIPT COLLATERAL

  • Daliborka Jovičić, PhD Coordinator of Statistical Reporting Service, Dunav Insurance ́Company, Belgrade
  • Ljiljana Jeremić, PhD College of Academic Studies “Dositej”, Belgrade
  • Zoran Jovanović, PhD College of Academic Studies “Dositej”, Belgrade

Abstract

Financing agribusiness by warehouse receipts allows the agricultural producers to obtain working capital on the basis of agricultural products stored in licensed warehouses, as collateral. The implementation of the system of licensed warehouses and issuance of warehouse receipts as collateral for obtaining a bank loan is supported by the European Bank for Reconstruction and Development and it has had positive results in the neighbouring countries. The precondition for fnancing this project was to establish a Compensation Fund for providing insurance coverage for licensed warehouses against professional liability. However, in the lack of an adequate legal framework, the operational risk is possible to occur. Bearing in mind that Serbia has a tradition in insurance industry and a number of operating insurance companies, the issue is that of the economic beneft and the method of insuring against this risk. The paper will present a detailed analysis of the operation of the Fund, capital requirement, solvency margin and a critical review of the Law on Public Warehouses which regulates the rights and obligations of the Compensation Fund in the case of loss occurrence.

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Published
2017-06-30
How to Cite
JOVIČIĆ, Daliborka; JEREMIĆ, Ljiljana; JOVANOVIĆ, Zoran. FINANCING AGRIBUSINESS: INSURANCE COVERAGE AS PROTECTION AGAINST CREDIT RISK OF WAREHOUSE RECEIPT COLLATERAL. Economics of Agriculture, [S.l.], v. 64, n. 2, p. 467-482, june 2017. ISSN 2334-8453. Available at: <http://ea.bg.ac.rs/index.php/EA/article/view/98>. Date accessed: 24 oct. 2020. doi: https://doi.org/10.5937/ekoPolj1702467J.
Section
Original scientific papers