Conceptual misunderstandings about policy-based agricultural insurance need to be clarified
Nowadays, many people call agricultural insurance policy-based agricultural insurance. If it follows the commercial insurance route, farmers will not buy into it. As a result, "government subsidies" seem to have become the main marker of the policy-based nature of agricultural insurance, and agricultural insurance with government subsidies is regarded as the "authentic" kind. Thus, whether agricultural insurance has subsidies has become a dividing line. This concept has misled many insurance companies into pursuing subsidy-style policy-based agricultural insurance, which has not only caused vicious competition, but has also failed to solve the fundamental problems of agricultural insurance.
In fact, promoting the development of agricultural insurance does not depend on how many subsidies there are, nor on how policy-based it is, but on its choice of a commercial insurance company-based operating and development model and organizational system. Government subsidy guidance is only a supplementary condition, not a necessary condition. This is because, as long as agriculture has an industrialization foundation, farmers will have insurance needs and a certain ability to pay premiums. Premiums can also naturally enter industrial costs and be borne by consumers, rather than becoming a burden on farmers. However, our country's misunderstanding for many years has been "commercialized operation of small-scale agricultural insurance," and it has been believed that government subsidies reduce the burden on farmers, but insurance companies, because they need to operate profitably, actually increase the burden on farmers. This conceptual confusion stems from the fact that the basic organizational system did not choose the internationally common mechanism led by mutual cooperative insurance and reinsurance.
Looking across the international agricultural insurance market, there is no policy-based agricultural insurance organizational form, because only mutual insurance, commercial insurance and social insurance are the three main organizational system forms. For any industry that needs insurance, what must first be chosen is not subsidies and policy-based status, but the organizational system form suitable for its development, that is, the matching of content and form. Only after that comes the supply of and support from policy. Mutual insurance is suitable for rural markets, and the government can provide policy subsidies and legislative support; commercial insurance is suitable for insurance for satellites, high-speed rail, bridges, large machinery exports, and so on, and the state can also provide policy subsidies; social insurance is suitable for old-age pensions and unemployment, and the state can also provide policy subsidies. From this it can be seen that the formulation of policy-based agricultural insurance that we see is unscientific and inaccurate, and should be corrected.
The Party Central Committee and the State Council have repeatedly emphasized encouraging the development of mutual cooperative insurance in rural areas, because mutual insurance is a good match for farmers, helps give play to agriculture's organizational advantages, technological advantages and resource advantages, fights disasters, and establishes an inclusive agricultural insurance protection system with low cost and broad coverage. Therefore, the key lies in what development path is chosen. The reason why China's agricultural insurance since 1930 has not developed is mainly a problem in the choice of path.
In the past, agricultural insurance was always a "long-standing difficult problem": insurance companies found it hard to operate, and farmers also found it hard to obtain satisfactory insurance protection. Since 2009, the insurance industry has gradually changed its development model, adopted the path of mutual insurance, and formed a united front through government support, farmer mutual aid, association organization and commercial insurance management. Today, with the added brilliance of policy subsidies, farmers' satisfaction and participation will become better and better, which will solve the long-standing development problem. It can be seen that the choice of path is the first and most important thing.