China’s Finance Ministry on Tuesday announced the nationwide implementation of full-cost insurance and planting income insurance policies for rice, wheat and corn, as part of a food security drive to encourage planting of staple grains.

The policy is aimed at improving the level of agricultural insurance protection, stabilizing farmers’ income, supporting the revitalization of rural areas and safeguarding food security, according to a notice released with the Agriculture Ministry and the State Administration of Financial Supervision.

The step up in farmer protection comes as the world’s largest agriculture producer and buyer, which commonly faces crop-damaging natural disasters, pursues food self-sufficiency and lower dependence on imports.

In April, China lost 379,500 hectares of crops to floods, droughts, sandstorms, earthquakes, forest fires, and freezing temperatures that caused direct economic losses of 14.81 billion yuan ($2.05 billion), the Emergency Management Ministry said last week.

The full cost insurance covers income losses from major natural disasters, pests and diseases, accidents, wild animal damage and other risks, while the planting income insurance covers losses caused by fluctuations in agricultural product prices and output.

In line with Beijing’s goal to consolidate the country’s fragmented and predominantly smallholder-owned farms, the policy, while including small and moderate-sized farmers, will focus on “the leading role” of agriculture business entities.

The policy permits village collectives to organize small farmers into taking out collective insurance policies and pay out benefits to their households.

The notice, which was released on Tuesday, will be backdated to apply from Jan. 1, 2024, and protects all farmers and organizations involved in agricultural production.

Source - Insurance Journal