The vegetable insurance system will be implemented next year to avoid price fluctuations

Vegetable insurance “mobilization” where money is the key

Economic Observer News reporter Zhang Xiangdong (Weibo) Qi Yunzhang With the conclusion of the Central Economic Work Conference, the economic development outline of “China's steady progress” has clearly emerged. Stability is to maintain the basic stability of macroeconomic policies, maintain stable and rapid economic development, maintain the general stability of the general price level, and maintain the overall social stability. It is necessary to continue to grasp and make good use of the important period of strategic opportunities for China’s development, make new progress in transforming the mode of economic development, make new breakthroughs in deepening reform and opening up, and achieve new results in improving people’s livelihood.

At the same time, during the next year's deployment, the meeting clearly proposed to “control commodity prices” and continue to adopt comprehensive measures to keep the overall price level basically stable and prevent price movements from rebounding. The newspaper was informed that as one of the measures to implement "controlling prices," relevant ministries and commissions are brewing to implement "basic vegetable varieties insurance" in an all-round way, so as to ensure that the CPI, which has fallen back, will not rebound in the next year.

Through the "Basic Vegetable Variety Insurance," the National Development and Reform Commission plans to insure ordinary vegetables needed by some residents to make up for the price fluctuations that cause losses to farmers and affect the overall vegetable prices in the market. The National Development and Reform Commission, the Ministry of Agriculture, and the China Insurance Regulatory Commission have already brewed for nearly a year for the introduction of this measure. However, due to the difficulty in obtaining financial support, progress has been slow.

On December 15, relevant persons from the Ministry of Agriculture stated that the purpose of this measure was to ensure the stability of vegetable production and prices, and to ensure that the farmers had basic planting income. The original plan was introduced at the latest in the first half of next year. However, if the central government does not have the funds, it will be difficult to implement it. People concerned with the National Development and Reform Commission said that it will implement the basic vegetable insurance system by the end of next year and hope that the local government can provide funds.

Flat food prices

It is reported that due to the wide range of vegetables involved, the basic vegetable insurance is mainly for the daily needs of ordinary residents such as radish, cabbage, potatoes and tomatoes. In accordance with the previous plan of the National Development and Reform Commission and the Ministry of Agriculture, the government and farmers cooperated in the insurance method, of which the government contributed 80% and the farmers accounted for 20%.

Under this insurance mechanism, the insurance company will first determine a cost price for some vegetable varieties according to the basic input. When the market vegetable price is lower than this cost price, the insurance company will compensate the vegetable farmers accordingly. According to relevant persons from the National Development and Reform Commission, the purpose of doing so is to stabilize the expectations of vegetable farmers and ensure the supply of basic vegetable varieties in the future, so as to avoid price volatility.

In the past two years, the prices of vegetables and other basic agricultural products (11.88, -0.32, -2.62%) have risen and declined, which has become the biggest incentive to drive CPI fluctuations. After the Spring Festival in 2011, the relevant departments of the National Development and Reform Commission began to communicate with the Ministry of Agriculture, the China Insurance Regulatory Commission, and the Ministry of Finance, hoping to introduce the establishment of a vegetable insurance system as soon as possible.

The CIRC holds a supportive attitude toward vegetable insurance. In April this year, the China Insurance Regulatory Commission issued the “Notice of Doing Good Agricultural Insurance Work in 2011” and proposed to expand insurance coverage. Special mention was also made of the need to actively establish “vegetable basket” products for local pillar agriculture and regional superior varieties. Pilots, such as meat, eggs, fruit, vegetables and other "vegetable basket" products.

According to the calculations of relevant departments, national insurance for the selected basic vegetables will require about 20 billion to 30 billion yuan in insurance funds. Most of them are financed by the central and local governments, and vegetable farmers only invest 10% to 20% of them. According to the relevant person of the National Development and Reform Commission, if farmers do not have government funds to insure the vegetable, the vegetable farmer will not take the initiative to insure. Therefore, market-based commercial insurance is not possible. Only the government's investment subsidies will drive it.

This practice is similar to the sow insurance launched in 2008. At that time, the soaring price of pork caused the NDRC and the Ministry of Agriculture to decide to insure the live pig farmers. It is alleged that the Ministry of Finance provided about one billion billion in financial funds for sow insurance. However, in the face of vegetable insurance this time, although the National Development and Reform Commission and the Ministry of Agriculture studied several times and the Ministry of Finance, they did not receive financial support.

The fluctuation of vegetable prices not only brings about unfavorable expectations for stable prices, but also usually causes serious losses for vegetable farmers. In May this year, cabbages, cabbages and other vegetables in Shandong and Henan provinces suffered from severe slow-moving sales; in October of this year, a large number of potato slow-moving phenomenon occurred in Ningxia, Gansu, Inner Mongolia and other places, which attracted the attention of the relevant departments of the State Council. .

In May this year, the National Development and Reform Commission issued a notice requesting the local price authorities to actively promote the establishment of policy insurance business for local basic vegetable varieties. If it is really difficult to pay for basic vegetable insurance, it is necessary to coordinate finance or use price adjustment funds to provide certain subsidies so as to reduce the market risk of producers and stabilize market fluctuations.

However, vegetable insurance is not as simple as introducing sow insurance in 2008 because there are many varieties of vegetables, and there are problems such as difficult to preserve, short cycle, and large geographical differences. Therefore, only a few basic varieties can be selected for insurance. It has been alleged that the National Development and Reform Commission, the Ministry of Agriculture, and China Insurance Regulatory Commission have fully studied the specific types and insurance methods of vegetable insurance and have already had the conditions that can be implemented.

The latest consideration of the relevant departments of the National Development and Reform Commission is that the local government finances the farmers to insure them. According to relevant persons from the National Development and Reform Commission, if more than 20 kinds of basic vegetables are selected for insurance in the country, there will be no shortage of supply of these vegetables and the price will be cheap. People will be able to buy cheap food and low-income groups will be able to feed.

Local money

At present, the country has already started to implement the vegetable insurance system in places such as Shanghai and Anhui Hefei, among which Shanghai is considered relatively successful. Shanghai Vegetable Insurance, which began in 2009, was jointly launched by the Shanghai Municipal Agriculture Commission and an agricultural insurance company. During the insurance process, the Shanghai-level government financed 50% of the premiums, and the subordinate districts and counties supported them, and the vegetable farmers secured more than 10%. The insurance focuses on the two off-seasons in winter and summer, and will maintain the supply of protected vegetables above 100,000 mu.

Anhui Hefei vegetable insurance is mainly targeted at "house greenhouses", and the specific premium Hefei financial commitment 30%, the county fiscal commitment 40%, vegetable farmers bear 30%. At present, Shandong, Fujian and other places have begun to start the pilot vegetable insurance.

However, Li Guoxiang, deputy director of the Institute of Rural Development of the Chinese Academy of Social Sciences, believes that the Shanghai vegetable insurance model is difficult to promote in other major agricultural provinces. The main reason is that for large agricultural provinces, policy-based vegetable insurance is entirely subsidized by local finances. Big, subsidized by commercial insurance companies is not realistic. Li Guoxiang said that the major agricultural provinces in China have a lower taxation rate and are financially strenuous. However, honestly speaking, it is of no significance to engage in vegetable insurance in a well-developed vegetable market. It is necessary to coordinate the promotion of agricultural insurance between local government and local government, and solve problems through complementarity.

It is understood that China's current agricultural insurance coverage is mainly grain, oil and cotton crops. In 2010, the national agricultural insurance premium income was 13.568 billion yuan, of which crop insurance premium income for crop, oil, and cotton crops was 10.792 billion yuan, accounting for 79.54% of total agricultural insurance premium income.

In 2010, the country’s agricultural insurance paid a total of 10.069 billion yuan, of which 6.58 billion yuan was for crop insurance, and 3.04 billion yuan was for aquaculture insurance. According to data previously disclosed by Dong Bo, deputy director of the property insurance supervision department of the China Insurance Regulatory Commission, from January to September this year, the national agricultural insurance premium was 16 billion yuan, and the risk protection amounted to 420 billion yuan. In recent years, insurance claims have reached 40 billion yuan. .

The higher risk of compensation also makes government officials feel that insurance companies will not be willing to intervene unless there is a policy subsidy. According to a person from the Ministry of Agriculture, “if there is no central financial support, it will be very difficult to introduce vegetable insurance in China in the short term.”

On December 14, a report issued by China Insurance Regulatory Commission, entitled “National Planting Industry Insurance Zoning Plan”, suggested that a “farmers-government-insurer” risk-prevention system should be established. The government should strengthen education subsidies. Relief and disaster reduction planning and investment in safety construction will increase support for related insurance agencies.

Li Guoxiang said that the demand for agricultural insurance in China is very strong, especially in the fields of production such as vegetable insurance and fruit tree insurance. However, the reality is that commercial insurance can't be afforded and policy insurance cannot be guaranteed. The central government now subsidizes more than 2000 billion yuan of food each year, and the central budget for vegetables has taken very little. Specific to the vegetable insurance, due to the fact that it is greatly affected by the natural weather, the insurance company bears great risks.

Li Guoxiang suggested that local governments can provide money and establish risk funds in the main selling areas of vegetables for insurance. For example, in a big city like Beijing, if you want to really solve the problem of stability in the supply of vegetables and prices, Beijing Municipal Government will allocate 10 million yuan each year to set up vegetable bases in Hebei and Shandong, and the two parties can jointly sign contracts and contracts. The provisions of each month, quarter, and year, the main vegetable varieties of the supply of production, quality, to ensure that the special supply of vegetable needs of Beijing residents, local governments are responsible for each.