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COA Helps Farmers on How to Transfer Agricultural Business Risk by Promoting Crop Insurance against Natural Disasters


  In order to assist farmers to transfer agricultural production risks, the Council of Agriculture (COA) will launch in 2015 a crop insurance against natural disaster program for pears, and further draft the Guidelines for Subsidizing Crop Insurance against Natural Disasters aiming to partially subsidize farmers who participated in the insurance program. Currently, the pear insurance packages submitted by insurance companies are being reviewed by the Financial Supervisory Commission to be made commercially available once they passed. During the probation period, the Natural Disaster Aid Fund and the natural disaster insurance programs would both be effective at the same time.

  The COA stated that due to Taiwan’s unique geographic location, there is a wide variety of crops clustering in certain areas during specific harvest seasons. As a result, it is not easy to dissipate the risks and therefore, increased the difficulty to launch crop insurance against natural disaster. Nevertheless, the Council was determined to put the insurance program on the road. In 2015, crop insurance for pears against natural disasters will undergo a trial period. The program consists of two major categories: crop-yield loss and government aid. Both aim to alleviate farmers’ losses caused by natural disasters.

  The COA further explained that the Council had selected ten priority crops of high economic value or have reached industrial production scale products, namely pear, mango, persimmon, Kyoho grapes, papaya, tankan, pomelo, sugar-apple, wax apple, and rice for the insurance programs. In October 2014, the Council requested the Non-Life Insurance Association to inform its members and encourage them to develop the aforementioned insurance packages. In addition to the pear insurance, there are also companies which are highly interested in mango and rice. The Council has also provided relevant information such as production cost, technical data, disaster related loss statistics, and research papers as references to insurance companies in the process of developing insurance packages. The COA hopes that in the near future more species of crops would have insurance packages developed for them.

  The COA explained that due to worldwide climate change during recent years, the agricultural production risks have increased dramatically. Therefore, the government will encourage farmers to purchase crop insurance against natural disasters by offering subsidies so that in the undesirable scenario when natural disasters occur, they could reduce the impact on their agricultural production while receiving reasonable compensation from the insurance company.