Agricultural Insurance Sounds Wonderful—But It’s No Silver Bullet

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% above the same period in an average year.

The frequent rainfall of recent weeks has once again struck at a critical growth stage that many crops least afford to miss. Faced with such abnormal weather, we cannot help but worry about farmers once more. In the past, we have documented rice paddies swallowed by floods overnight, wheat turned yellow and brittle by drought, and corn, on the very cusp of harvest, left mouldering and sprouting after days of relentless overcast rain…

Farmers sustain the food, vegetable, and fruit supply for the vast majority of the non-agricultural population. Yet farming has always depended on the heavens, and a single episode of extreme weather can wipe out months of hard work in an instant.

In this episode, we turn our attention to a topic rarely discussed yet intimately linked to food security, climate risk, and the livelihoods of farmers—agricultural insurance. Together with Yi Fujin, Director of the Research Centre for Agricultural Risk Management and Safe Development at Zhejiang University, we begin with a single cow, a plot of corn, and a late spring cold snap, to explore how agricultural insurance works and why it always advances amid controversy.

More importantly, as extreme weather grows ever more frequent, what exactly is agricultural insurance for? Is it there to provide a safety net for farmers, or is it trapped in a cycle of “inaccurate payouts”? Why do some farmers treat insurance as a wealth-management product, while others cannot get a single penny of compensation? Can insurance companies really afford to cover ever-larger disasters? And as risks mount, who should bear the ultimate responsibility for agriculture’s future?

This Episode’s Guest

Yi Fujin | Qiushi Distinguished Professor, Zhejiang University; Director of the Research Centre for Agricultural Risk Management and Safe Development, Zhejiang University. Long-standing research on agricultural risk management and agricultural insurance policy.

This Episode’s Host

Xiao Jing | Host, Food Talk. Focused on agriculture, food, and rural issues, with a desire to explain complex agricultural topics clearly and accessibly.

Xiao Dan | Editor at Foodthink / Host, Food Talk. Long-standing involvement in on-the-ground research in agriculture and rural areas, with a focus on agricultural markets and the situation of farmers

Timeline

01:09 A near-dead yak calf gave us our first true understanding of what agricultural insurance means.

03:07 Hit by the same disaster, some receive compensation while others harvest nothing at all—what exactly went wrong?

03:38 What does agricultural insurance actually cover? Is it the weather, the yield, or the losses?

08:17 Apples, corn, wheat, and dairy cows—why are the insurance rules so different? What does “the central government insures major commodities, local governments insure specialty products” mean?

10:37 97% of China’s agricultural operators are smallholder farmers—what does that mean?

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

11:58 Covering tens of thousands of acres within fourteen days! How does the reality of “a nation of small farms” force agricultural insurance claims into “village-level sampling”?

17:44 No disaster, yet money comes back? Why do farmers mistake buying agricultural insurance for “buying a wealth-management product”?

25:25 Is the ¥5.2 trillion in risk coverage real? How are the books of agricultural insurance actually calculated?

33:59 If an entire province suffers a major disaster simultaneously, could an insurance company go bankrupt?

43:31 Is agricultural insurance a profitable business—or should it be?

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

A dying yak calf lay outside the herder’s tent while its mother watched from a distance. In the end, the calf did not survive. The herder carried it to the winter pasture and received a compensation payout from the insurance company. Image: Jiao Xiaofang

The rice paddies, soaked by floodwater, show extensive lodging; muddy water still clings to the stalks and panicles. Image: Yvonne

In early August 2023, Wuchang in Heilongjiang was hit by torrential rain and flooding on a scale rarely seen, submerging roughly 40% of the area’s 2.5 million mu of farmland. The stretch shown here was once rice paddies, now entirely swallowed by floodwater. Image: Yvonne

A tractor trapped in the mud after the rain, unable to budge. Heavy machinery operating on farmland after rain also compacts the soil, damaging the cultivated land. Image: Little Willow Farm

Wheat heads that sprouted after being hit by “harvest-ruining rain”. Image: Lüwo Farm

In 2023, the Guanzhong region of Shaanxi endured ten consecutive days of “harvest-ruining rain”, leaving part of the wheat crop moulded. Image: Lüwo Farm

In 2025, Shaanxi was gripped by severe drought. Wheat on the riverbank land south of the Wei River had turned yellow; even the flag leaves were bone dry. The soil around the roots of the wheat, touched by hand in the daytime, burned to the touch. Image: Kong Lingyu

In July 2025, a devastating downpour struck Beijing once again. At Sohu Farm, beside the Qingshui River in Beizhuang Town, Miyun District, floodwater swallowed all 450 mu of farmland. The flood has nearly erased every trace of the farm—nothing left but a shattered road embankment, soggy mud still submerged, and a smattering of construction debris. Image: Zhen Rui

Published by Foodthink