About 200 counties in China will launch a new type of agriculture insurance as an innovative program to compensate crop yield losses resulting from natural disasters, according to the Chinese State Council executive meeting on April 26.
The counties will be chosen from China’s 13 major grain production provinces including Hebei, Heilongjiang, Anhui and Henan. The insurance will be offered to family farms, large scale growers and farmers’ cooperatives, covering the costs of agricultural materials, fertilizers, and land use fees for planting rice, wheat and corn.
It will enhance coverage of agricultural insurance, and increase support for large growers, said Tuo Guozhu, a professor from Capital University of Economics and Business.
China’s agricultural insurance developed rapidly in recent years. Data from the China Insurance Regulatory Commission (CIRC) show that in 2007-2016, agricultural insurance payment rose from 112.6 billion yuan ($16.3 billion) to 2.2 trillion yuan, and crop area coverage increased from 230 million mu (15.3 million hectares) to 1.72 billion.
Still, agricultural insurance cannot meet farmers’ growing demands, a CIRC official said. Small farming households could not get enough reimbursement because of low premiums, while large growers may face huge losses far beyond coverage value after being hit by severe disasters.
Limited coverage and services discouraged farmers from participating in insurance programs. With rising modern and collective farm production, comprehensive insurance programs could better safeguard farmers’ interests, an industry insider said.
The No 1 Document issued by the central government this year called for more comprehensive and diversified insurance plans for new types of agricultural businesses, and local governments will be encouraged to develop their own insurance products.
These measures are believed to promote stable development of disaster agriculture insurance.
The executive meeting also decided to increase the subsidized ratio of insurance premiums to 47.5 percent for pilot farms located in China’s central and western regions, and 45 percent in eastern regions.
This will encourage participation from both insurance companies and farmers, Tuo said.