The Ministry of Finance (MOF) and two other departments have released the Circular on Fully Implementing Full Cost Insurance and Planting Income Insurance Policies for Three Major Grain Crops Nationwide (the "Circular"), effective on January 1, 2024.
According to the Circular, the full cost insurance and planting income insurance policies for three major grain crops will be fully implemented. The Circular specifies that the protection level of full cost insurance covers the total agricultural production cost, such as physical and chemical costs, land costs and labor costs; the protection level of planting income insurance will reflect the price and output of agricultural products and shall cover the output value of relevant agricultural products. In terms of subsidy policies, the Circular stipulates that, on the basis of the policy that provincial fiscal premium subsidies shall not be less than 25%, the ratio of central fiscal subsidy will be 45% for the central and western regions and northeastern regions, and 35% for the eastern regions. On the basis of the provisions that the relevant central entities assume no less than 10% of the premiums, the central government's premium subsidies to relevant central entities shall be subject to the subsidy ratio in the location of their planting business. The Circular also clarifies that insurance premium rates shall be determined based on the principle of principal preservation and small profit. Underwriting institutions shall ensure that the comprehensive rate of agricultural insurance does not exceed 20%.