Chongqing - This summer, the region's extreme heat caused 66.8% of the soil to lose significant moisture, negatively affecting grain crop growth, according to the Chongqing Municipal Agriculture and Rural Affairs Commission. Agricultural insurance helps mitigate the impact on farmers.

Wan Zhengquan, a farmer from Wansheng District in southern Chongqing, stated, "Agricultural insurance alleviates the fear of disasters, boosting confidence in farming and livestock."

The paddies of Chongqing Wansheng. (Photo/Wansheng District)

Wan planted 1333 square meters of corn but faced a pest outbreak that reduced his yield. Thanks to his policy-based agricultural insurance, he received compensation for his losses. "The insurance premium for 1333 square meters of land of corn was 14.4 yuan (USD 2.04), and I received about 200 yuan in claims," Wang said.

In Wansheng, farmers pay only 7 yuan per 666.7 square meters for corn and rice insurance, providing substantial coverage at a low cost. Due to the heat, insurance claims are projected to exceed 1 million yuan by the end of 2024.

Insurers in Chongqing are also customizing crop-specific policies to support farmers impacted by extreme heat. In Pengshui County, severe heat damaged tobacco fields and increased farmers' workloads. In response, insurers, in collaboration with the local government, launched tailored insurance that covers accidents, injuries, and medical expenses for tobacco farmers and their employees.

Promoting agricultural insurance often encounters delays due to long cycles and inspection challenges, reducing efficiency. After heat damage, farmers must secure the site and notify the insurer for inspection. They then submit documents, which lead to reporting, damage assessment, and publicizing the claim before compensation is issued.

Changshou District has introduced weather index insurance to enhance efficiency, streamlining the claims process. This product relies on five years of local meteorological and aquaculture data, using high temperatures and heavy rainfall as compensation benchmarks. Farmers receive quick payouts without complex procedures when these conditions are met, effectively reducing economic losses from weather-related disasters.

The rural scenery of Chongqing Wansheng. (Photo/Wansheng District)

Frequent natural disasters in China have driven the development of a large-scale agricultural insurance system.

Yin Jiang'ao, Director General of the Property and Casualty Insurance Supervision Department of the National Financial Regulatory Administration, said that Chinese agricultural insurance payouts totaled 112.4 billion yuan in 2023, covering 57.72 million farming households.

After Typhoon Bebinca struck Zhejiang Zhoushan, China Insurance Zhejiang Branch swiftly deployed a team for on-site inspections, opened a fast-track claims channel, and simplified the process, enabling affected farmers to resume production quickly.

Agricultural insurance is a government-supported initiative that requires farmers to pay only a small portion of the premium. Liao Min, vice minister of Finance of the PRC, said that farmers contribute just 20% of the premium, with the remaining 80% subsidized.