Agricultural insurance development must not only win praise but also win broad participation
Because agriculture has a long production cycle, is highly affected by the environment, and carries high investment risk, it is inherently weak. Developing agricultural insurance can improve agricultural producers' ability to withstand risks, and it is therefore widely valued by countries around the world. Since China promulgated the Regulations on Agricultural Insurance in 2012, agricultural insurance has entered a wave of development, but it has not yet escaped the dilemma of "winning praise but not broad participation": although governments at all levels vigorously promote agricultural insurance, the vast number of farming households are not highly motivated to participate, and it is fairly common for agricultural insurance to be unwelcome. To achieve "not only winning praise but also winning broad participation" for agricultural insurance, the bottleneck problems constraining its development must be resolved.
Behind agricultural insurance "winning praise but not broad participation" is a concentrated reflection of the various bottleneck problems that agricultural insurance development has long faced. First, China's agricultural production methods are relatively backward, the mentality of "relying on heaven for a living" is deeply rooted among agricultural producers, and awareness of risk and awareness of participation in insurance is weak. Second, agricultural production risks are high and insurance claims procedures are cumbersome, so insurance institutions are not highly motivated to participate in agricultural insurance. China is a country prone to natural disasters, facility agriculture is underdeveloped, and the ability to withstand natural disasters is relatively poor, so the agricultural disaster rate and damage rate have long remained high. Therefore, compared with other commercial insurance, agricultural insurance has a higher payout ratio and lower returns, and in addition claims are difficult and loss determination is difficult. At present, apart from a small number of insurance institutions carrying out agricultural insurance business, most insurance institutions are still hesitant to move forward. Existing agricultural insurance business has a single type of coverage, a narrow scope, and relatively small insured amounts, making it difficult to effectively play the role of safeguarding agricultural production and reducing farmers' economic losses, and it has also affected the spread of agricultural insurance products in rural areas. Finally, policy-based agricultural insurance is greatly constrained by local government financial capacity. Compared with the agricultural premium subsidies in Western developed countries that reach more than 50%, in China even the western region, where the agricultural insurance subsidy rate is the highest, is only about 40%. This also constrains the development of agricultural insurance.
From a global perspective, in countries and regions that have been relatively successful in modern agricultural development, agricultural insurance has played an important safeguarding role and is called the "stabilizer" of agricultural production. In exploring their successful experience in developing agricultural insurance, the main aspects worth drawing on are: establishing relatively complete insurance legislation, clarifying protection objectives, the way farming households participate in insurance, the amount and method of raising initial capital, and the compensation and handling methods for amounts exceeding accumulated total reserves under abnormal disasters, so as to effectively protect farmers' interests; adopting an agricultural insurance model combining voluntariness and compulsion, implementing statutory insurance and compulsory insurance for a small number of forestry, animal husbandry, fishery, and major crop products that bear on the national economy and people's livelihood, with relatively low rates; providing strong government subsidies for agricultural insurance, subsidizing not only premiums but also management costs; attaching importance to the role of specialized agricultural insurance institutions and supporting commercial insurance institutions in operating agricultural insurance; and establishing an agricultural reinsurance mechanism, with the government or government-supported commercial insurance institutions and reinsurance institutions providing reinsurance for agricultural insurance.
Developing agricultural insurance bears on China's modern agricultural development and the increase of farmers' incomes, and requires coordinated advancement by all parties. First, improve the targeting and effectiveness of fiscal support policies. The central government finance should focus on safeguarding safety and people's livelihood, and increase insurance support for strategic agricultural products and major grain varieties. Local government finance should concentrate resources on safeguarding key points and advantages, and focus on developing insurance for distinctive and advantageous varieties that play a large role in increasing farmers' incomes and have great potential for industrial development. Second, promote innovation in insurance types and business models. Accelerate the shift from a single basic risk protection to yield insurance, income insurance, price insurance, and index insurance, give insurance institutions greater autonomy in operations, and expand the space for farming households to choose insurance independently. On the basis of strengthening policy-based agricultural insurance, explore "Internet Plus agricultural insurance," actively develop general commercial agricultural insurance and mutual-aid agricultural insurance, and focus on solving problems such as scattered insured entities, persistently high operating costs, and complex survey and loss determination procedures. Third, build a comprehensive agricultural insurance protection system. On the basis of doing primary agricultural insurance well, accelerate the development of agricultural reinsurance and catastrophe insurance, and form a three-tier risk protection system with clear business, clear rights and responsibilities, and sufficient protection. At the same time, develop socialized services for agricultural insurance, establish a third-party evaluation mechanism, and improve the efficiency and credibility of agricultural insurance operations. It must be emphasized that developing agricultural insurance cannot be separated from the government's macro-control and market regulation. Government departments should follow the approach of combining decentralization with management, correctly grasp specific policy objectives such as market access, tax and fee preferences, credit support, reinsurance development, and catastrophe prevention, strengthen top-level design and macro-control for policy systems involving overall and public interests; and for market activities in the micro field, implement interim and ex post supervision, focusing on cultivating a fair, reasonable, and orderly agricultural insurance market order and environment.