<strong>China: Yunnan Province Basically Realizes Full Insurance Coverage of Tobacco Production</strong>

Source from:  TobaccoChina Online 07/15/2013

Southwest China's Yunnan Province – the largest tobacco-producing region in China known as the kingdom of tobacco – has basically realized full coverage by commercial insurance of leaf tobacco production in the province, as a result of persistent efforts to regulate prevention of risks from natural disasters in tobacco growing.

Since the beginning of 2013, Yunnan Province has adopted the model of operating pilot projects of commercial insurance for natural disasters in leaf tobacco production.

So far, the area of tobacco fields in Yunnan covered by insurance policies has totaled 7.673 million mu (511,533 hectares). As a result, the province has basically realized full coverage by commercial insurance of tobacco production, relieving tobacco growers of worries about possible natural disasters in leaf tobacco production.

According to data released at the 2013 on-the-spot meeting of Yunnan Province on leaf tobacco State purchase and development of a modern tobacco agriculture held on July 10, since the beginning of 2013, Yunnan Province has adopted the model of operating pilot projects of commercial insurance for natural disasters in leaf tobacco production in all major tobacco-growing zones in the province, characterized by "government guidance, insurance purchase by farmers, subsidization by the tobacco industry and full coverage by commercial insurance". Adopting the fundraising model of "partial payment by tobacco growers, partial subsidization by tobacco companies and partial extension of aid by the government", Yunnan Province has publicly invited tenders for commercial insurance for natural disasters in leaf tobacco production by local tobacco growers, with the scope of insurance covering losses causable by various types of natural disasters including plant diseases and pests, hailstorm, gales and frosts, at the rates of 30 yuan (4.9 U.S. dollars) per mu (per 0.067 hectare), 40 yuan (6.5 U.S. dollars) per mu (per 0.067 hectare), 50 yuan (8.1 U.S. dollars) per mu (per 0.067 hectare) and 60 yuan (9.8 U.S. dollars) per mu (per 0.067 hectare). The maximum compensation for total crop failure can respectively reach 800 yuan (130 U.S. dollars), 1,070 yuan (173 U.S. dollars), 1,350 yuan (218 U.S. dollars) and 1,600 yuan (260 U.S. dollars) per mu (per 0.067 hectare).

It was reported that so far in 2013, Yunnan Province has grown 7.694 million mu (512,933 hectares) of tobacco, and the area of tobacco fields in Yunnan covered by insurance policies has totaled 7.673 million mu (511,533 hectares), with the insurance premiums totaling 295 million yuan (48 million U.S. dollars), including 183 million yuan (30 million U.S. dollars) extended by the tobacco industry in subsidies, with an average of 38.44 yuan (6.2 U.S. dollars) per mu (per 0.067 hectare) in insurance premium. Consequently, all tobacco crops except those in Dehong Prefecture are covered by commercial insurance.

So far this year, losses have occurred to 266,000 mu (17,733 hectares) of tobacco crops in Yunnan, which has led to the payment of 59.96 million yuan (9.7 million U.S. dollars) in insurance compensation. The insurance policies have effectively enhanced the capacity of extending relief at times of natural disasters, and has contributed to promoting sustained and healthy development of leaf tobacco production in Yunnan.

It was reported that there are presently more than 1.1 million tobacco-growing farm households in Yunnan, who earned 25.4 billion yuan (4.1 billion U.S. dollars) in income from tobacco growing in 2012. Enditem