Insurance protection lets development proceed without worries
At the beginning of this year, Zhang Yongyi, the "Duck Raising King" of Lujiang County, Anhui, and head of Lujiang County Yinong Industry and Trade Co., Ltd., signed an agricultural loan guarantee insurance policy with an insurance company for a total amount of 2 million yuan. With this policy, Zhang Yongyi could obtain a 2 million yuan loan without needing other collateral or guarantees. Zhang Yongyi said: "We agricultural enterprises have no property to use as collateral, so we cannot get loans from banks. With agricultural loan guarantee insurance, loans are no longer difficult!"
At present, 102 business entities in Lujiang County have obtained a total of 150 million yuan in small agricultural guarantee insurance loans. By the end of 2015, the balance of agriculture-related loans of financial institutions in the county was 6.05 billion yuan, an increase of 2.04 billion yuan over the same period of the previous year, up 14.7%, exceeding 10% growth for three consecutive years.
According to reports, in 2013, the Lujiang County National Modern Agriculture Demonstration Zone was recognized as a national pilot demonstration zone for agricultural reform and construction, exploring a new path for modern agricultural development through pilot trials. The issue of agricultural loans was included in this reform pilot project. Through the issuance of the "Implementation Opinions on the Pilot Work of Small Agricultural Loan Guarantee Insurance in Lujiang County," a new mechanism for sharing risks between insurance and financial institutions was established.
The opinions quickly moved to the implementation level. In September 2013, Lujiang County cooperated with Guoyuan Insurance Company to carry out loan guarantee insurance for agricultural enterprises, professional cooperatives and farmers. The county finance department allocated 5 million yuan in risk compensation funds for bad debt risk compensation, and one year later the risk compensation funds increased to 10 million yuan. Guoyuan Insurance signed cooperation agreements with four banks, including Huimin Village and Township Bank and Lujiang Rural Commercial Bank, each with an annual quota of 50 million yuan, with a risk-sharing ratio of 8:2.
Insurance not only ensured smooth loans, but also benefited every aspect of agriculture in Lujiang.
Lujiang County created a direct insurance mechanism, under which agricultural business entities of a certain scale can directly insure with insurance agencies and receive separate claims settlement. It also accelerated the process of expanding insurance coverage. On the basis of policy-based agricultural insurance for major crops such as rice, wheat and rapeseed, it developed new insurance products for special agricultural products such as laying duck shed insurance, laying duck insurance, vegetable greenhouse insurance, aquaculture insurance, forestry insurance and tea insurance, basically achieving full coverage of planting and breeding insurance in the county. It also created an insurance standard-raising model. Following the idea of "policy-based insurance covering the basics, commercial insurance as a supplement," it took the lead nationwide in raising the maximum claim standards per mu for rice and wheat from 330 yuan and 367 yuan to 500 yuan and 450 yuan respectively, with the county finance department providing a 50% subsidy for the increased premiums.
Since the pilot began, 1,158 agricultural business entities of more than 100 mu each in the county have directly insured a total of 1.029 million mu and received more than 35 million yuan in compensation due to disasters. The claims settlement time has been shortened from the original 2-3 months to within 1 month. A total of 580 agricultural business entities in the county voluntarily raised their insurance standards, insuring 413,000 mu of rice and 119,000 mu of wheat respectively, and the standard-raised insurance portion increased risk protection for business entities by nearly 80 million yuan.