20 yuan of agricultural insurance can cover 600 yuan, and 50% of farmers are willing to buy it

The survey shows that 35.4% of insured farmers believe that agricultural insurance is not enough to cover 30% of their losses, and only 5.24% of farmers believe it can cover more than 90% of their losses

■ Reporter Leng Cuihua

Yesterday, at the 2014 China Agricultural Insurance Seminar hosted by the China Insurance Society and organized by PICC P&C and the Agricultural Information Institute of the Chinese Academy of Agricultural Sciences, the first nationwide survey report on agricultural insurance demand organized by the China Insurance Industry Society was officially released. The survey results show that too little compensation is the main reason farmers are unwilling to buy insurance. The survey points out that farmers have a strong demand for agricultural insurance products with low burden and high protection, and it is necessary to strengthen innovation in agricultural insurance products, improve operating mechanisms, and effectively give play to the role of insurance in serving agriculture.

Farmers:

Agricultural insurance payouts are too small to mean much

⟦NL> Data show that from 2007 to 2013, the risk protection provided by agricultural insurance grew from 112.6 billion yuan to 1.39 trillion yuan, with an average annual growth rate of 52%, cumulatively providing 4.07 trillion yuan in risk protection and paying 74.4 billion yuan in compensation to 147 million disaster-affected farming households. However, from farmers' perspective, the insurance compensation standard is still too low to make up for disaster losses.

“The main reasons farmers do not buy agricultural insurance are that they believe the compensation is too low, buying insurance is of little significance, and the compensation procedures are too complicated.” The report released by the China Insurance Industry Society points out that “35.4% of insured farmers believe insurance is not enough to cover 30% of losses; 30.54% of farmers believe it can cover 30% to 50% of losses; 19.3% of farmers believe it can cover 50% to 70% of losses, and only 5.24% of farmers believe it can cover more than 90%.”

At the same time, the survey results also show that the current variety of agricultural insurance products is difficult to meet farmers' needs. Data show that among the surveyed farmers, demand for crop insurance reached 85.3%, demand for livestock breeding insurance accounted for 50.7%, and agricultural product price insurance accounted for 18.1%. However, there are currently few types of insurance products for crop farming and livestock breeding, and the variety must be enriched.

Premiums:

Willing to pay within 20 yuan

Although farmers have high expectations for the protective role of insurance, due to reasons such as income, their ability to bear premiums is limited, so demand for insurance with low burden and high protection is very strong.

Survey data show that for the question “If the insured amount per mu (head, bird) is 600 yuan, how much premium can you afford?”, more than 50% of people answered “within 20 yuan”. Above the 10 yuan tier, as premiums gradually increase, the proportion of farmers willing to bear them becomes smaller.

The survey found that farmers hope to obtain higher protection with a lower premium burden. If insurance companies increase the insured amount, nearly 80% of farmers are willing to increase their premiums in the same proportion, indicating that farmers are willing to improve the level of agricultural insurance protection, but the premiums they are willing to bear are relatively small, with the premium they are willing to pay per mu of crops concentrated within 20 yuan.

This is also closely related to farmers' income. The income situation of the surveyed farmers shows that households with total annual income of 20,000-40,000 yuan accounted for the highest proportion, at 30.58%; households with total annual income between 10,000-20,000 yuan accounted for 17.15%; and those between 40,000-60,000 yuan accounted for 19.25%.

Countermeasures:

Commercial insurance to make up for policy-based agricultural insurance

The survey shows that farmers hope insurance will effectively play a role in compensating losses, but their ability to bear premiums is relatively small. Therefore, in developing agricultural insurance, government subsidies cannot be absent. Through in-depth research, the China Insurance Society put forward many policy recommendations for developing agricultural insurance, one important part of which is improving supporting government subsidy policies.

The research report points out that the degree of support from financial departments and the affordability of finances at all levels determine, to a certain extent, the coverage rate and protection level of agricultural insurance. “The prominent problem at present is that in the process of subsidies being allocated level by level according to their respective proportions by governments at the central, provincial (municipality directly under the Central Government), municipal, and county levels, the fiscal revenue at the municipal and county levels is limited, and the pressure of subsidizing agricultural insurance premiums is relatively great.” the report points out.

To this end, the China Insurance Society recommends: first, reduce the fiscal pressure on district and county governments for agricultural insurance premium subsidies, increase the subsidy intensity of central and provincial finances, and raise the enthusiasm of local governments in promoting agricultural insurance; second, agricultural insurance premium subsidy policies should not be one-size-fits-all, and different insurance types and premium subsidy standards should be formulated in light of the characteristics of local agricultural organizations and different regional conditions; third, change the original practice of applying for subsidy budgets to a system of budget allocation at the beginning of the year and overall settlement at the end of the year, reduce links in fund allocation, and ensure seamless connection between the issuance of national premium subsidies and the actual underwriting cycle; finally, balance the relationship between increasing the insured amount and the affordability of agricultural producers. The production of leading enterprises generally has high-risk and high-return characteristics, and commercial insurance may be considered to make up for the shortcomings of policy-based agricultural insurance.

The China Insurance Society also put forward other recommendations, including raising the status of agricultural insurance in the disaster assistance system, improving the quality of agricultural insurance services, and strengthening supervision of agricultural insurance.