context: Extending premium subsidies to seed producers—who must operate farms to grow crops to extremely exacting quality standards for their seed—is a WTO-compliant approach to subsidising these companies. The state has a strategic interest in ensuring domestic supply for staple crop seed and further hopes to support these companies in ‘going global’.

Companies, cooperatives and farms engaged in rice, wheat and corn seed production and processing will be eligible for central fiscal agricultural insurance premium subsidies, per a 9 August 2018 notice from Ministry of Finance (MoF). The document stipulates

  • qualified wheat, rice and corn seed companies, cooperatives and farmers will be included in the subsidies category within the central government budget
    • specific subsidy rates are set by MoF in 2016 in ‘Management measures for fiscal subsidies for agricultural insurance premiums’
  • insurance agencies can refer to official China Banking and Insurance Regulatory Commission documents to determine premium level with the following specifications
    • insurance liability is to cover production or quality losses due to natural disasters, pests and diseases, and other risks
    • compensation should cover all direct production costs throughout the lifecycle of insured crops
    • beneficiaries should be farmers or seed production organisations
  • ag and seed authorities should provide lists of qualified seed products to insurance agencies; local ag and seed authorities should assist insurance agencies in evaluating losses
  • insurance regulators at all levels should facilitate insurance product design, insurance fee-setting and compensation