In the Face of Severe Drought, Agricultural Insurance Is Urgently Needed to Safeguard Grain Production

Since August 4, in the severe drought zone in western Zhumadian City, Henan Province, machine harvesting of corn with total crop failure has begun. “The Beginning of Autumn falls on the 7th; the season has arrived; even with irrigation water, the corn no longer forms ears. Left growing in the field, the corn depletes the soil; machine harvesting and crushing the corn stalks to return them to the field can still nourish the soil while waiting to plant wheat in October.”

Since July, many parts of China have experienced sustained large-scale drought. In Henan, a major grain-producing province, the drought-affected area of autumn grain across the province has reached 23.1 million mu, and the disaster-affected autumn grain area is still expanding at a rate of 2.3 million mu per day. Of this, 17 million mu is mildly affected and 6.1 million mu severely affected, mainly distributed in Pingdingshan, Xuchang, Zhengzhou, Luoyang, Anyang, Hebi and other cities.

In recent years, reduced yields caused by natural disasters in wheat and corn production have consistently been one of the problems troubling farmers, and have also greatly suppressed farmers' enthusiasm for farming. A powerful way to reverse this situation is policy-based agricultural insurance.

Policy-based agricultural insurance refers to insurance for specific crops and specific livestock breeds provided by insurance companies with premium subsidies from the government. Developing policy-based agricultural insurance and establishing a government-supported agricultural insurance system is conducive to building a market-oriented agricultural support and protection system and enhancing agriculture's ability to withstand risks. However, agricultural insurance carries high risks and high costs, with prices much higher than other property insurance, and low-income farmers simply cannot afford it. To raise farmers' willingness to participate in insurance, the proportion of fiscal subsidies must be further increased.

In addition, because the incidence of drought is higher than that of other disasters and its impact on agriculture accounts for a relatively large share of the impact of all disasters, insurance companies in some places have long excluded drought from the scope of liability covered by agricultural insurance, which in turn has affected farmers' willingness to participate in insurance.

For this reason, relevant departments must attach importance to improving the agricultural reinsurance system and establishing a fiscally supported mechanism for spreading catastrophe risks. As stipulated in the Regulations on Agricultural Insurance: the state establishes a fiscally supported mechanism for spreading major disaster risks in agricultural insurance, and encourages local governments to establish locally fiscally supported mechanisms for spreading major disaster risks in agricultural insurance.

Whenever a major disaster causes farmers to suffer huge losses, agricultural insurance is eagerly awaited as a “timely rain”; the scene of farmers tearfully clearing corn with total crop failure is undoubtedly also a heartfelt call for agricultural insurance.