An economics professor has proposed the establishment of an agricultural insurance fund, so as to realise financially stable insurance services for farmers.
Professor Yang Min-hsien, who teaches at Feng Chia University and is a former president of the Rural Economics Society of Taiwan, in an article in Taipei Times, highlights several weaknesses in the agricultural insurance services on the island.
Apart from the absence of an agricultural insurance fund, he says that the lack of development of different kinds of agricultural insurance would have an impact on insurance scope and diversity, while the scarcity of independent, complete data and damage surveys would increase the government burden in alleviating agricultural losses from natural disasters, and the risk of price falls caused by imports or imbalances in marketing and distribution channels.
In addition, there is a lack of programmes for training personnel and promoting agricultural insurance. In addition, the relationship between agricultural insurance, existing production subsidies and disaster relief, as well as their respective responsibilities, has also be clarified.
Agricultural insurance law
These issues cannot be resolved at the current stage, mainly because there is no legal framework, he notes.
The Cabinet submitted a draft agricultural insurance Bill to the legislature on 22 July, but as the current legislative session is the last before January’s elections, legislators are busy campaigning and have given little attention to reviewing Bills.
He says that lawmakers have to pass the agricultural insurance Bill during the current legislative session in order to offer farmers real income guarantees, for otherwise there would be a delay.
On a positive note, Prof Yang says that the government has been carrying out tests on agricultural insurance in recent years. In a two-pronged approach using both commercial and policy insurance, it has developed many insurance products that compensate for actual losses, income guarantees, weather parameters and so on. These types of insurance cover almost 20 kinds of agricultural and aquatic output, such as pears, pineapples, rice, bananas, mangoes, aquaculture, groupers and more. Farmers are beginning to purchase insurance, and it now covers about 9% of agricultural land. These pilot cases are leading to improvements and results, and change is happening.