HONG KONG, Oct 3 (Thomson Reuters Foundation) - Ma Rongda,
a tea grower for nearly 30 years, knows how badly his business
can be affected by extreme weather. But when heavy snow and cold
hit his tea garden earlier this year, Ma was not as worried as
he used to be.
"I bought insurance for my tea plantations," he explained.
For an annual premium of some 7,000 yuan ($1,050), the
46-year-old received compensation of more than 220,000 yuan
($32,950) - enough to cover all of his production costs last
This is the second year that Ma and his fellow farmers in
eastern China's Anji County have had access to insurance. Before
that, no policies were available for Chinese tea growers looking
to secure their crops.
As erratic weather has become the new norm in China,
insurance policies against losses from extreme weather have
emerged in a wide range of agricultural businesses, from
beekeeping to cattle ranching to seaweed farming. Many are
proving hugely popular, thanks in part to cut-rate prices made
possible by government subsidies.
Chinese officials say the number of buyers of
agriculture-related insurance has more than tripled in the
country between 2007 and 2015, while the area of farmland
covered by insurance has quintupled.
The fast expansion of insurance is just one thing China is
doing to reduce what it sees as a growing risks related to
extreme weather and other climate change impacts.
The country now requires infrastructure construction
companies to take climate change impacts into consideration when
planning new projects.
It has also developed early warning systems for extreme
weather events and taken up popular communications tools - such
as Weibo, China's version of Twitter - to send out typhoon
Disaster statistics show why. Over the last 20 years, one
out of two people affected by weather-related disasters has been
Chinese, according to the United Nations.
Chinese government statistics show that floods, droughts,
typhoons and other natural disasters have caused annual economic
losses of 200 billion yuan ($30 billion) a year, on average,
since the 1990s.
Chinese farmers, whose harvests rely on good weather, have
been among those hit the hardest.
'REALLY STRANGE' WEATHER
Ma, the tea grower in Anji County, for instance, had already
lost last year's harvest to extreme cold when freezing
temperatures hit his plantations again this year, withering the
"The weather is now getting really strange," Ma said in a
telephone interview with the Thomson Reuters Foundation. "We
used to experience extreme cold weather once every three years.
But in 2016 alone, we suffered from (both) heavy snows and cold
waves. It was a double whammy."
The insurance he now buys - introduced last year - gives
farmers an automatic payout for losses, without a visit from an
insurance claims adjuster, when the recorded temperature drops
to minus 0.5 degrees Celsius during the harvesting season.
With Chinese policymakers promoting market-oriented
solutions to help cope with climate change, 65 percent of the
insurance premium is being covered by government subsidies,
making the new service appealing to cost-conscious farmers.
Concerns over extreme weather drove Ma to buy insurance for
all his tea land as soon as the service became available in 2015
- and he has encouraged many others to do the same, he said.
According to the Anji White Tea Association, the scale of
insured tea plantations increased from 600 hectares in 2015 to
nearly 1,900 hectares (4,700 acres) this year.
PICC Property and Casualty Co. Ltd., which designed the
insurance for tea growers, has rolled out 39 insurance products
aimed at helping Chinese farmers handle an increase in climate
shocks. Other insurance firms also have come up innovative
policies, both in design and the way they are sold.
Shanghai-based Anxin Agricultural Insurance Co. Ltd., for
one, recently teamed up with Taobao, a popular Chinese
e-commerce site, to sell insurance against crop failures caused
by strong winds.
Farmers can buy the insurance online and claim it based on
meteorological data, which enables the company to serve farmers
whose villages do not have any insurance agents.
There are also growing efforts to create insurance services
for climate-related damages that are hard to measure.
Suzhou, a city west of Shanghai, is a major production hub
for Chinese mitten crabs, a burrowing crab that is named for its
furry claws and that is an autumn delicacy in eastern China.
But since heat waves have begun happening more frequently in
Suzhou, farmers have complained that their mitten crabs - and
their wallets - have reduced in size.
Although traditional agricultural insurance covers the loss
of crab production, insurance agents and crab growers often
argue over the amount of compensations, said Lu Jihui, a
spokesman for China Pacific Insurance Group Co. Ltd. That's
because high temperature isn't the only cause of smaller crabs,
making it challenging to measure the actual damages.
To eliminate the disputes, China Pacific Insurance has
designed a new product that directly links the rate of
compensation with temperature peaks - and avoids time-consuming,
labor-intensive damage assessments.
China's new climate-related insurance services, however,
often depend on heavy government subsidies. While the central
government and local authorities have opened their wallets to
support pilot programs, it remains unknown to which extent they
can continue the financial assistance.
There is also a problem with some farmers still hesitating
to buy insurance, despite the benefits, insurance companies say.
However, this is expected to change as more extreme weather
One case in point is Suzhou, where extremely hot weather
persisted for more than 20 days this summer.
"Many crab growers in my village failed to break even this
year, because of the adverse impact of high temperatures," said
Shen Wenrong, a 48-year-old crab grower. Shen said his crabs
were also only two-thirds normal size, but he stayed profitable
in part because the insurance compensation offset some losses.
Now "many of my neighbors plan to buy climate insurance next
year," Shen said.
(Reporting by Coco Liu; editing by Laurie Goering :; Please
credit the Thomson Reuters Foundation, the charitable arm of
Thomson Reuters, that covers humanitarian news, climate change,
women's rights, trafficking and property rights. Visit news.trust.org/climate)