"Insurance + Futures" provides protection for small and medium-sized farmers to enter the large market

In recent years, the support and guarantee of "insurance + futures" for agriculture-related varieties has been continuously increased, and the guarantee results have become more remarkable, showing a development trend
of both quantity and quality.
With the increasing enthusiasm of agriculture-related entities to participate in insurance, "insurance + futures" needs to further innovate, expand the breadth and depth of the agricultural industry chain, and continue to provide financial assistance
for rural revitalization.
The report of the 20th National Congress of the Communist Party of China proposed to improve the agricultural support and protection system and improve the rural financial service system
.
As an important innovation in financial support for agriculture and rural areas, the business model of "insurance + futures" has been continuously piloted for many years
.

"Insurance + Futures" is an agricultural insurance product involving price risk developed by insurance institutions and futures institutions, mainly for farmers, new agricultural business entities, agricultural industry chain enterprises and other agriculture-related subjects, the model takes the futures price of agricultural products as the basis for insurance underwriting and claims, and the insurance institution provides price or income insurance products to agriculture-related entities, and disperses
the price risk involved in insurance products in the futures market through futures institutions.

According to the data released by the China Futures Association for 2021-2022 (May 1, 2021 - April 30, 2022), the "insurance + futures" project has grown rapidly and presented a series of new highlights
.

Quantity and quality go hand in hand

The safety net is woven wider and denser

Recently, Liu Shuyang, a fruit farmer in Majiazhuang Village, Guanli Town, Qixia City, Shandong Province, added a large amount of money
to his account.
"I never expected that I was compensated more than 75,000 yuan, which basically covered the loss
.
" In the recent harvest season, the price of apples fell, and this "insurance + futures" claim payment made Liu Shuyang turn his worries into joy, "Last year, I spent 4,200 yuan to pay premiums for 42 acres of orchards, which is worth it
.
" ”

"Market price fluctuations are extensive, and it is difficult for general agricultural insurance to diversify the large-scale risk of falling prices, while the futures market provides a platform
for hedging price risks.
" Insurance companies carry out price risk transfer, that is, 'reinsurance', in the futures market, opening up the channel for risk transfer from ordinary farmers to the futures market, and realizing multiple benefits
.
The relevant person in charge of the Zhengzhou Commodity Exchange said that in 2021, Zhengzhou Commercial Law Firm and relevant departments jointly carried out the apple "insurance + futures" pilot project in Shandong Province, providing price guarantee
for 32,000 mu of apples for more than 570 farmers.

Nowadays, the "insurance + futures" security net is becoming wider and wider, covering more and more varieties, regions and agricultural groups
.

From corn to dates, from eggs to pigs, from feed to urea.
.
.
the number of varieties covered by the "insurance + futures" project is increasing
.
According to data from the China Futures Association, as of April 30, 2022, "insurance + futures" provided risk protection for 15 agriculture-related varieties, involving a spot quantity of 8.
9618 million tons and an insured value of 42.
198 billion yuan
.
As of April 30, 2022, the "Insurance + Futures" project has covered 244 prefecture-level cities and 703 counties in 31 provinces, covering 1,637,700 rural households, 975 farmers' professional cooperatives, 682 family farms, and 970 other agricultural-related
enterprises.

The "insurance + futures" protection net is becoming more and more dense, and constantly innovating service content and business models, so as to make the "bottom line" stronger and the protection better
.

From "price insurance" to "income insurance", not only the price is guaranteed, but also the output
.
Since 2019, the Dalian Commodity Exchange has carried out "insurance + futures" income insurance projects
covering 44 counties in 8 major corn and soybean producing areas.
In 2021, Zhengshang Institute explored "insurance + futures" income insurance
on apple varieties in Huangling County, Yan'an City, Shaanxi Province.

From "income insurance" to "profit insurance", not only the sales side, but also the cost side
.
In recent years, industry institutions have further innovated and launched breeding profit insurance that protects both the risk of rising feed costs and the risk of falling pig and egg prices, to further protect the actual income
of farmers.

"More small and medium-sized farmers are effectively connected to the big market
.
" Ran Li, deputy secretary-general of China Futures Association, said that "insurance + futures", a financial support model based on the basic national conditions and agricultural conditions of small farmers in large countries in China, provides small and medium-sized farmers with futures and derivatives as a market-oriented risk management method, enhances their ability to resist market risks, and also improves agricultural quality, efficiency and competitiveness
.

Cohesion

Boost the enthusiasm for insurance participation and promote the industrialization of agriculture

Two sets of data released by the China Futures Association show the positive changes in the "insurance + futures" projects in 2021-2022: First, there are a total of 1,907 projects in the current period, with an insured value of 42.
198 billion yuan, of which 1,353 commercial projects (projects without futures exchange support) with an insured value of 21.
31 billion yuan, and 554 futures exchange support projects.
The insured value of goods was 20.
89 billion yuan; second, the cumulative investment of insurance premium funds in the project was 1.
991 billion yuan, of which 554 million yuan was financial subsidy funds, 492 million yuan was supported by futures exchanges, and 790 million yuan
was paid by the insured entities.

"These two sets of data reflect the rapid development of commercial projects and the diversification of project premium composition, indicating that under the joint efforts of government departments, exchanges, futures companies and other parties, the enthusiasm of agriculture-related entities to actively participate in projects has been increasing, and the awareness of using futures and derivatives to resist agricultural risks has been increasing
.
" Ran Li analyzed
.

The enthusiasm for insurance participation comes from the strong support
of policies and premium funds.
Ran Li introduced that the Central Document No.
1 has mentioned the "insurance + futures" model for many years, and with the encouragement of policies, futures exchanges and futures companies have provided long-term financial support for project premiums, and local governments and social assistance support project premiums are also increasing, effectively reducing the cost of farmers participating in "insurance + futures" and enhancing their willingness to
participate.

The motivation to participate in insurance also comes from a sense of
gain.
From 2021 to 2022, the "Insurance + Futures" project achieved a cumulative compensation amount of 1.
34 billion yuan
.
"Corn from Huachuan in Heilongjiang, apples from Yanchang in Shaanxi, natural rubber from Baisha in Hainan, and sugar from Menglian in Yunnan have all been successfully piloted for many years, continuously optimizing risk protection for relevant agriculture-related entities, and also enhancing the willingness
of other agriculture-related entities to take the initiative to understand and participate in projects.
" Ran Li said
.

The good protection effect of "insurance + futures" not only enhances the enthusiasm for participating in insurance, but also further stimulates the enthusiasm for
production.
Guarantee from point to surface woven into a network, production from small to large industry, under the escort of "insurance + futures", Yixian County, Jinzhou City, Liaoning Province has completed such a transformation
.

In 2015, Dashang launched the first "insurance + futures" project pilot in Yixian in China; In 2016, insured farmers who tasted the sweetness of protection began to expand their corn planting area; In 2017, the local cooperative was established and large-scale production began; In 2018, the establishment of a spot company extended to the downstream of the industrial chain.
.
.
The "insurance + futures" project has driven agricultural production from small to large, from decentralized to industrialized and
large-scale.

According to the statistics of the China Futures Association, among the 703 counties covered by the project in 2021-2022, 231 of the original 832 national-level poor counties were involved, including 44 national rural revitalization key counties, and "insurance + futures" continued to provide financial assistance
for rural revitalization.

Continuous innovation

Continuously improve the breadth and depth of the service agricultural industry chain

In Wucheng County, Shandong Province, Wucheng Rural Commercial Bank increased the credit loan or pledge loan limit of project participants through the credit enhancement function of "insurance + futures" insurance policy, and issued a loan of 28 million yuan to insured farmers to guarantee initial planting input and solve the financing problems
of farmers.

In Yanchang County, Shaanxi Province, six major apple producing areas piloted the introduction of agricultural leading enterprises, farmers' professional cooperatives and family farms as spot purchasing enterprises in the "insurance + futures" basic model, developed order agriculture, promoted the solution of apple sales difficulties, and stabilized the interest linkage mechanism
of the industrial chain.

In Haicheng, Liaoning Province, the "Insurance + Futures" pilot explored the integration of traditional breeding insurance and pig price insurance to integrate pig breeding income insurance, and used artificial intelligence technology to identify pig numbers and monitor breeding conditions, effectively solving the problem of low protection of
traditional pig breeding insurance.

"Insurance + Futures + Orders", "Insurance + Futures + Banks", "Insurance + Futures + Artificial Intelligence".
.
.
In recent years, the "insurance + futures" business has explored model innovation in relatively mature pilot areas, broken through industry, technology and other barriers, and expanded the breadth and depth
of the service agricultural industry chain.

Innovation is also the key word
for the "insurance + futures" model to continue to serve rural revitalization.
"In the future, we will continue to innovate the
service chain of 'insurance + futures + N'.
" Ran Li said that futures companies should practice their internal strength, effectively improve their professional pricing trading capabilities and product design capabilities, strengthen cooperation with insurance companies, commercial banks, agricultural leading enterprises and other subjects, improve the comprehensive financial services, and explore the provision of risk management services
for the agricultural industry on the basis of protecting farmers' income.

In the view of the exchange, the innovation of the "insurance + futures" model in the future should also take into account standardization and characteristics, and further explore transformation and upgrading
.
"We should fully combine the characteristics of varieties and the operation of the futures spot market, and explore the path and mechanism for the transformation and upgrading of local advantageous and characteristic agricultural products 'insurance + futures' price insurance to income insurance, effectively improve the level of insurance protection, and help the characteristic industries become bigger and stronger
.
" The relevant person in charge of Zheng Shang said
.

(Source: People's Daily)

China Food News(2023.
01.
06.
04)

(Responsible editor: Zhu Meiqiao).