Agricultural Insurance Sounds Great, but It’s No Panacea

Monitoring data from the National Climate Centre, China Meteorological Administration, show that since the start of the flood season this year, the national average rainfall has reached 110.1 mm, 18.6% higher than the long-term average for the same period.

The recent spate of rainfall has once again caught many crops at a critical stage when they can least afford delay. In the face of such abnormal weather, we find ourselves worrying about farmers once more. In the past, we have documented paddy fields flooded overnight, wheat yellowed by drought, and maize, nearly ready for harvest, moulding and sprouting under prolonged rain…

Farmers underpin the food, vegetable and fruit supply for the majority of the non-agricultural population. Yet farming has always depended on the weather, and a single spell of abnormal weather can turn months of hard work into nothing.

In this episode, we turn our attention to a topic rarely discussed but closely tied to food security, climate risk and farmers’ livelihoods—agricultural insurance. Together with Yi Fujin, Director of the Research Centre for Agricultural Risk Management and Safety Development at Zhejiang University, we begin with a cow, a mu of maize and a late spring frost, and talk about how agricultural insurance works and why it continually moves forward amid controversy.

More importantly, as extreme weather becomes increasingly frequent, what exactly is agricultural insurance doing for farmers? Is it providing them with a safety net, or is it trapped in the dilemma of “inaccurate payouts”? Why do some farmers treat insurance as wealth management, while others fail to receive compensation? Can insurance companies really afford to cover increasingly large disasters? And as risks grow ever larger, who should bear the ultimate responsibility for the future of agriculture?

This / Episode’s Guest

Yi Fujin | Qiushi Distinguished Professor at Zhejiang University and Director of the Research Centre for Agricultural Risk Management and Safety Development at Zhejiang University, and a long-time researcher in agricultural risk management and agricultural insurance policy issues.

This / Episode’s Host

Xiaojing | Food Talk host. Focuses on agriculture, food and rural issues, and hopes to make complex agricultural questions clear and easy to understand.

Xiaodan | Foodthink editor / Food Talk host. Has long been involved in on-the-ground research in agriculture and rural areas, focusing on agricultural markets and farmers’ circumstances

Time / Line

01:09 A dying calf shows us, for the first time, what agricultural insurance truly means.

03:07 When the same disaster strikes, some receive compensation while others are left with no harvest at all. Where exactly does the problem lie?

03:38 What exactly does agricultural insurance cover? Does it pay out for weather, yield, or loss?

08:17 Why are the insurance rules completely different for apples, maize, wheat and dairy cows? What does “central government covers staple commodities, local governments cover local specialties” mean?

10:37 In China, 97% of agricultural business entities are smallholders. What does this mean?

16:33 Why is it so difficult for agricultural insurance to be as precise as motor insurance?

11:58 Within 14 days, they have to inspect tens of thousands of mu of farmland! How has the reality of a “big country with smallholders” forced agricultural insurance claims settlement into “whole-village sampling”?

17:44 How can farmers get money back even when there is no disaster? Why do they mistakenly treat buying agricultural insurance as “wealth management”?

25:25 Is the 5.2 trillion in risk cover a real figure? How exactly are the accounts calculated for agricultural insurance?

33:59 If a province suffers a major disaster at the same time, will insurance companies go bankrupt paying claims?

43:31 Is agricultural insurance a business, or rather, should it be a profitable one?

57:41 In an era of climate change, do we need to redesign agricultural insurance?

A herder’s yak calf lay dying outside the tent, its mother watching from a distance. The calf did not survive. The herder took it to the winter pasture and, in exchange, received a compensation payment from the insurance company. Image source: Jiao Xiaofang

The flood-soaked paddy field had extensive lodging, with mud and water left on the rice panicles and stalks. Image source: Yvonne

In early August 2023, Wuchang in Heilongjiang Province was hit by rare torrential rain and flooding. About 40% of the local 2.5 million mu of farmland was submerged. The area shown in the image had originally been a paddy field, and it was completely submerged under the floodwater. Image source: Yvonne

After the rain, a tractor had become stuck in the mud and could not move. Working heavy machinery on arable land after rain can also cause soil compaction, damaging the arable land. Image source: Xiaoliushu Farm

After the “harvest rain”, the wheat ears sprouted. Image source: Lüwo Farm

In 2023, the Guanzhong region of Shaanxi Province experienced ten consecutive days of “harvest rain”, and some of the wheat underwent moulding. Image source: Lüwo Farm

In 2025, Shaanxi was hit by a severe drought. The wheat on the river flats south of the Wei River had withered and turned yellow, and the flag leaf had completely dried up; the soil at the roots of the wheat felt scalding to the touch during the day. Image source: Kong Lingyu

In July 2025, a massive downpour struck Beijing once more. At Sohu Farm, by the Qingshui River in Beizhuang Town, Miyun District, all 450 mu of land were swallowed by the flood. The flood had almost erased all traces of the farm, leaving only a washed-out roadbed, mud saturated with water, and a small amount of construction debris. Image source: Zhen Rui

Published by Foodthink