Vegetable price insurance lets farmers grow vegetables with peace of mind, from losing 1.3 million yuan to receiving 300,000 yuan
"In early April, chives could sell for 2 yuan per kg, but by the end of that month they had dropped to 1 yuan and 20 fen per kg. Who could have imagined the market would be so sluggish this year? By mid-May, chives could not even fetch 50 fen per kg." Since the start of this year, the plunge in chive prices has left Zhu Le, chairman of the Yongning County Zhule Agricultural Professional Cooperative, utterly miserable. "If things go on like this, this year's 180 mu of chives will lose 600,000 yuan. What am I supposed to do?" Just when Zhu Le had "no way out," a sudden deposit of 170,000 yuan into his bank card left him both happy and surprised...
Looking at this "unidentified payment," Zhu Le thought it over and finally remembered that in early April this year, he had taken out an insurance policy for his 100 mu of chives at a premium of 60 yuan per mu. Upon inquiring, it was precisely that earlier decision that had now given him a chance to "catch his breath." "Thank goodness I bought vegetable price insurance. The insurance company transferred the claim payment so quickly, otherwise I don't know how I would have gotten through the days ahead. In 2014, without this price insurance and with the large area I planted, I lost 1.3 million yuan all at once. This year the price insurance gave me a safety net, and my losses have basically been recovered. Thanks to the government and the insurance company," Zhu Le said.
What brought Zhu Le this good fortune was precisely vegetable price insurance, which can solve the problem of "cheap vegetables hurting farmers." In recent years, vegetable prices have been like a roller coaster, often swinging wildly. After surges like "garlic you ruthless" and "ginger you army," there often follows a period of depressed prices, and the contradiction of "cheap vegetables hurting farmers, expensive vegetables hurting consumers" is not uncommon. To solve these problems, Yinchuan City officially launched a vegetable price insurance pilot program starting in 2015. When the actual selling price of agricultural products is lower than the target price, subsidies are paid to farmers according to the difference, helping farmers avoid market risks. As of now, Yinchuan City has carried out policy-based vegetable price insurance work in 9 cities, counties (districts) including Helan and Yongning, covering 11 varieties such as peppers and tomatoes, with an insured area of nearly 10,000 mu, involving 575 households. Based on last year's situation, the simple payout ratio reached 280%. "I heard I can still get more than 130,000 yuan this month. I really regret only insuring 100 mu back then; otherwise I truly could have minimized my losses," Zhu Le said regretfully.
It is understood that the "vegetable target price" refers to the insured price of the insured vegetables. The target price is determined by referring to the average production price during the natural peak marketing period of the insured vegetables over 3 to 5 years. When during the insurance period the average production price of the insured vegetables is lower than the target price, the insurance company pays compensation to the insured households according to the contract.
As for how claims are implemented, Zhao Yaohua, general manager of the Agricultural Insurance Department of Ping An Property & Casualty Insurance Company of China, Ltd. Ningxia Branch, said that when the actual selling price of agricultural products is lower than the target price, subsidies are paid to farmers according to the difference; when the actual selling price is higher than the target price, no subsidy is paid. The insurance period is limited to the peak marketing period of vegetables mainly because during this period market supply often increases sharply, vegetable prices fall noticeably, farmers face the greatest price risk, and the problem of "cheap vegetables hurting farmers" is also prone to occur.
However, not many people like Zhu Le have been able to turn things around by relying on vegetable price insurance; more vegetable farmers still did not participate because of concerns. "When we worked with the insurance company to promote this in Yongning County, 100 people came to the meeting, and after a round of introduction, only two people signed up for insurance," said Lu Zhenhua, chief of the Vegetable Section of the Yinchuan Municipal Agriculture and Animal Husbandry Bureau. Of those two, one was Zhu Le, and the other was Yang Jinli, but he insured only 1 mu of tomatoes.
"At first everyone always felt this money would be thrown away. I also had a try-it-and-see attitude. I planted 10 mu but insured only 1 mu." Yang Jinli, who lives in Yanghe Town, Yongning County, now regrets it somewhat. The 1 mu of tomatoes he insured received a subsidy, while the rest could only be sold cheaply. "Vegetable prices can be good or bad, but with insurance, you can recover your costs, and next year you won't feel panicked when growing vegetables," Yang Jinli said. Vegetable price insurance gave vegetable farmers the confidence to keep growing vegetables, and next year he will definitely insure all his tomatoes.
The news that Zhu Le and Yang Jinli received payouts because of vegetable price insurance spread quickly. Now, after seeing real claim payments, more vegetable farmers in Yongning County want to use vegetable price insurance to secure a safety net. "After seeing that I received the claim payment, more than 60 vegetable-growing households in the village pooled 140,000 yuan and asked me to help find out about getting insurance," Zhu Le said happily. If every vegetable farmer bought insurance, then everyone would no longer feel anxious when growing vegetables.
It is understood that in order to increase vegetable farmers' willingness to participate and encourage more vegetable farmers to actively insure, turning post-disaster relief into pre-disaster mutual insurance, 90% of the premiums paid by vegetable farmers in our city are borne by the government price adjustment fund, while vegetable farmers only need to bear 10% of the cost. "Vegetable cultivation is a traditional advantageous industry in our city. The repeated difficulty of buying and selling vegetables has not only caused huge losses to vegetable farmers, but has also become a prominent problem restricting vegetable farmers from escaping poverty and becoming prosperous," Lu Zhenhua said. The coverage rate of vegetable price insurance in our city is low, and vegetable farmers urgently need suitable insurance products to help them prevent and defuse market risks. The purpose of carrying out the vegetable price insurance pilot is to combine price regulation policy with market insurance, playing a role in stabilizing vegetable farmers' planting expectations, preventing vegetable price risks, enhancing the stability of vegetable production, and protecting vegetable farmers' interests. "Next, our city will establish a long-term mechanism for agricultural disaster resistance and relief, increase support, let more vegetable farmers participate in insurance, and strive for full coverage of vegetable price insurance," Lu Zhenhua said.