Farmers buy fertilizer.
Chinese agricultural insurance subsidies fuels growth: Report
Posted On: Jan. 09, 2009 5:49 AM CST
Michael Bradford
ZURICH, Switzerland—Subsidies for agricultural insurance in China have spurred farmers to expand production and could point the way for other emerging markets to stimulate the growth of food supplies, a recent report from Swiss Reinsurance Co. Ltd. concludes.
The report, “Setting Up Sustainable Agricultural Insurance: The Example of China,” points out that China introduced subsidies for agricultural insurance in 2007, making the coverage more affordable for farmers. The demand for the coverage generated around $1.80 billion in premiums in 2008, the report said.
The coverage has provided an incentive for farmers to expand production and, therefore, help meet the rising demand for food from a population that is growing increasingly affluent, according to the report.
“China’s use of agricultural insurance as an incentive for farmers to expand agricultural production, and its efforts to develop a robust agricultural insurance industry, is a good example for other emerging markets that currently lack such a framework,” said Roman Hohl, co-head of agriculture at Zurich-based Swiss Re, and one of the report’s authors, in a statement.
