APR Workshop 2010-Risk and vulnerability-Weijing Wang
1. Experience from China: Agricultural Risk Management 1-6 November 2010 Nanning, China
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3. Risk layers Prob. 80% 50% 25% 10% 40% 30% 10% 20% 50% 60% 70% 90% 80% reinsurance Risk retention layer insurance Market layer Catastro-phe financing layer Government Safety net Yield loss as %
4. A quick expanding agricultural insurance market USA Spain China USA Spain China Premium (USD)
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7. China’s pilot of Weather Index Insurance: Drought and Heatwave Index Insurance for Rice Target: Poverty County in Changfeng, Anhui prov. Annual income p/c: 498 USD Total population 1,200 HH covered 482 Sum insured/max. payout: 300 RMB per MU, or 50 USD/0.07 ha. Premium rate 4% Crop insured Rice
9. The phase approach Harvest 100mm 0 mm Trigger: 200 mm Exit: 100 mm Trigger Exit Stage Period May 15-Aug.31 Pre-sowing~Flowering Sep.1-Oct.15 8 mm -180mm Drought Index I Drought Index II 200mm Payout=(200mm-180mm)* 1.5 RMB/mm Payout=(200mm-100mm)* 1.5 RMB/mm
10. The phase approach Trigger Exit Stage Period July 30 -Aug.15 Flowering Heatwave Index Trigger: 8 °C Exit: 20 °C Exit=20 Observed Index=15 Trigger=8
12. For those who have interest… http://www.sciencedirect.com/science/journal/22107843 Government Interventions in Agricultural Insurance The Potential for scale and sustainability in weather index insurance for agriculture and rural livelihoods http://www.ifad.org/ruralfinance/wrmf/index.htm
13. We not only protect the livelihood of farmers, but the human capital of our next generation!