Qingdao launches target price insurance for fresh milk to give dairy farmers peace of mind

Behind the introduction of a new agricultural insurance policy

Qingdao Agriculture and Rural Bureau launches target price insurance for fresh milk, giving dairy farmers who have encountered market shocks a sense of confidence

Since last year, the price of fresh milk has been consistently low for more than ten months, and it has been difficult to operate at breakeven. Now, I have insured all 145 cows in the farm with target price insurance for fresh milk, and finally can start farming with peace of mind. On July 30th, the first insurance cycle of Qingdao's target price insurance for fresh milk, which was insured by Shenglin Dairy Farm in Laixi City, was launched, which relieved the farm director Li Dayong.

Providing insurance for fresh milk is an innovative achievement of the Qingdao Agriculture and Rural Bureau's deep implementation of the "four grassroots" system. By creating policies to regulate the income of dairy farmers in response to their urgent needs and concerns, a "buffer zone" has been created for individual dairy farmers in the face of cyclical shocks, and assistance has been provided for the high-quality development of Qingdao's dairy industry.

Market impact, dairy farmers struggling to operate

Agriculture has a distinct cyclical nature. On the one hand, crops and livestock have growth cycles, so it is urgent to engage in agriculture; On the other hand, the response of agricultural product markets to prices is lagging behind, which can easily lead to herd behavior in agricultural structural adjustments, resulting in new overproduction.

When these problems arise, the first and foremost ones are undoubtedly the breeders at the forefront of the industry chain. This group is often "small farmers" and "retail investors" with weak ability to resist risks. Therefore, relevant departments need to supplement with regulatory measures to ensure that farmers have confidence and sustainability in engaging in agriculture, thereby stabilizing the supply system of the entire society.

In 2010, Li Dayong was optimistic about the driving role of the world-renowned food and beverage company Nestle in the local breeding industry in Laixi. He began to engage in dairy farming and grew from 10 cows to a maximum of over 200 cows. Due to the scale of farming and the quality of milk, his farm became a direct supply pasture for Nestle.

However, since last year, due to market conditions and consumer demand, fresh milk prices have remained low, and dairy farming has been in a difficult situation. Faced with the industry's "cold wave", Li Dayong not only bears the pressure of purchasing at a price lower than the cost, but also the burden of borrowing loans to expand the scale. Helpless, he can only choose to sell his cattle to support him. Last year we raised over 200 cows, and now there are only 145 left. We can't hold on without selling them, but selling them is really heartbreaking

Holstein Dairy Farm, also located in Laixi City, is a large-scale dairy farm in Qingdao. Its six farms raise over 2800 cows and produce more than 50 tons of milk per day. Director Wang Yijian said that the price of fresh cow's milk dropped to 4.3 yuan per kilogram last year. Although the price of Qingchu feed has decreased this year, the cost of raising fresh cow's milk has also dropped to 3.85 yuan per kilogram. However, he still has loan interest costs. However, the contract purchase price of fresh milk in large companies has dropped to 3.75 yuan per kilogram, and the market price of fresh milk for "small retail investors" has even fallen below 3 yuan per kilogram. Based on the current milk production of the farm, the Holstein dairy farm is losing an average of 980000 yuan per month, and the operating pressure is increasing.

Targeting at "hard times and anxious expectations", the policy of benefiting farmers is awesome

At the beginning of this year, the Municipal Agriculture and Rural Bureau launched the "Four Down Grassroots" action, deepening frontline services to promote revitalization.

When the research team entered Laixi to investigate the dairy industry, the difficulties faced by dairy farmers were quickly captured by the research team: as a major dairy farming city in China, Laixi, with a stock of 69000 cows, is a "key town" in the fresh milk industry. Here, cows are the "lifeblood" and "money bag" that farms and dairy farmers rely on for development. For the industry chain, if farmers are unable to cope with continuous losses and choose to give up operations, the dairy industry chain will face supply-demand imbalance, which will undoubtedly affect the high-quality development of the city's dairy industry.

Wherever the voice of the masses is, the target of the work is set. Solving the 'urgent, difficult, and anxious' problems that the masses cannot solve on their own is the specific practice of the Qingdao Agriculture and Rural Bureau in solving the problems of the people, "said Yuan Ruixian, Secretary of the Party Group and Director of the Qingdao Agriculture and Rural Bureau, in an interview. With questions in mind, the Municipal Agriculture and Rural Bureau formed three research teams led by bureau leaders to go deep into the main production areas of the dairy industry. Together with the district, city, town, and street, they went to enterprises and cattle sheds to gain an on-site understanding of the production and operation situation of the breeding farms.

Is there any way to reduce our losses as the acquisition price continues to decline? "" I participated in a milk insurance pilot last year and hope to have it this year, with even greater protection. "" Our own breeding scale is small, and we cannot supply fresh milk to large factories or provide purchase certificates. We hope to be insured. "During the research, both large breeding farms and small retail investors expressed their current difficulties and expectations to the research team.

After understanding the situation of the dairy industry in the city and recording in detail the demands of farmers, a list of urgent needs of dairy farmers has been formed and included as an important agenda item in the Party Committee Meeting of the Municipal Agriculture and Rural Bureau. Through repeated discussions and collisions, a "problem-solving approach" has become increasingly clear - to regulate the income of farmers and minimize individual breeding losses caused by market fluctuations through policy based insurance, a beneficial measure for farmers.

To this end, the Municipal Agriculture and Rural Bureau has accelerated the implementation of policies, jointly with the Municipal Finance Bureau and the Municipal Local Financial Management Bureau, inviting representatives of some breeding farms (households) and insurance companies to have multiple discussions, providing detailed basis, detailed plans, and detailed paths for the introduction of target price insurance for fresh milk. Through repeated discussions and solicitation of opinions, the difficulties, bottlenecks, and pain points that dairy farmers are concerned about have been gradually resolved.

——What if the insurance premium is expensive and dairy farmers cannot afford it? After careful consideration by all parties, it has been ultimately decided that the insurance premium will be borne by the policyholder at 20%, with a financial subsidy of 80% (up to a maximum subsidy of 20 million yuan). According to calculations, it is expected to provide risk protection of 350 million yuan for 96000 tons of fresh milk;

——What should small farmers do if they want to participate in insurance but cannot provide purchase vouchers? In response to this specific issue, the functional departments and insurance institutions have consulted and discussed multiple times, and finally decided to optimize the insurance classification by merging small retail investors with less than 100 heads (inclusive) and 100-200 heads (inclusive) into one tier, and providing measurement standards for their output;

——Is it appropriate to use the purchasing price of the dairy company last month as the target price as the purchasing price continues to decline? For this practical issue, the final plan is to adjust the target price of each batch of fresh milk according to the changes in production costs every two periods, with a fixed data to ensure the rights and interests of dairy farmers;

……

In less than two and a half months, four departments including the Municipal Agriculture and Rural Bureau and the Municipal Finance Bureau issued the "Notice on Launching the Pilot Program of Target Price Insurance for Fresh Milk", which includes research and analysis, argumentation and discussion, legality review, research by the Party Group Meeting of the Bureau, research by the Municipal Policy based Agricultural Insurance Joint Committee, and approval by the Municipal Government, and launched target price insurance for fresh milk throughout Laixi City.

Insurance implementation, 'heart stone' landing

Now, you no longer have to worry about the loss caused by the decline in milk prices. "On the morning of July 11th, the Qingdao Municipal Government Information Office held a regular policy briefing at the Holstein Dairy Farm. At this meeting, the Municipal Agriculture and Rural Bureau and the Municipal Finance Bureau jointly launched the target price insurance for fresh milk with insurance underwriting institutions. After listening to the policy interpretation on site, Li Dayong breathed a sigh of relief and was the first to sign up for insurance.

This insurance can be purchased by dairy farms (households) and enterprises in Laixi City that have obtained a valid Animal Epidemic Prevention Condition Certificate or provided proof of epidemic prevention and immunization records. The project will be implemented in stages, with each period lasting one month. The insurance mainly covers the income reduction of farmers caused by the decrease in the price of fresh milk. Zhao Mingxi, Director of the Finance and Audit Department of Qingdao Agriculture and Rural Bureau, introduced that the pilot has increased financial investment and doubled the subsidy amount; Optimized price collection to maximize the protection of the interests of dairy farmers, and installed a "safety valve" to reduce production and operation risks for dairy farmers and stabilize their income. She told reporters that even if the price of fresh milk continues to decline in the second half of the year, insured dairy farmers can still receive a certain minimum income.

Regarding the compensation amount per kilogram of fresh milk that dairy farmers are concerned about, the person in charge of Ping An Property and Casualty Insurance Qingdao Branch introduced that the current target price insurance for fresh milk compensates for the difference between the actual price and the target price according to the insurance contract. The target price is set by the Laixi Agriculture and Rural Bureau and insurance company based on the breeding cost price, while the actual price is monitored and released by the price monitoring team. When the actual price of fresh milk is lower than the target price, the insurance company will promptly compensate according to the contract agreement.

On the afternoon of July 24th, insurance agency staff came to the farm to conduct on-site audits of the number of cows and farm documents. Li Dayong signed a confirmation letter and provided a corporate account. After going through publicity, policy issuance and other processes, the policy officially entered the insurance cycle on July 30th. Li Dayong told reporters that he had insured 55 tons of fresh milk, with a total premium of 12430 yuan. He only paid 2486 yuan, and the remaining 9944 yuan was covered by financial subsidies. At the same time, the insurance company provides over 170000 yuan in risk protection, which is equivalent to 85 times the insurance benefit for farmers who pay their own premiums.

Zhao Mingxi has more expectations for fresh milk insurance. She told reporters that the target price insurance for fresh milk is a pilot insurance, and she hopes to form replicable and promotable experience based on the efforts of all parties. In the next round of policy based agricultural insurance scheme adjustments, she will strive to include it in the universal insurance category, form normalized policy insurance, and become a "safe haven" that dairy farmers can rely on at any time when facing market storms.

The reporter learned that more than 140 breeding farms (households) in Laixi City have registered to participate in insurance. At present, the Qingdao Agriculture and Rural Bureau is promoting the efficient implementation of insurance underwriting institutions' underwriting to households, loss assessment to households, and claims to households, truly achieving good things and practical results. (Qingdao Daily/Guanhai News reporter Zhang Jin, correspondent Feng Zhi)

Short review

Practice the 'four grassroots' approach

Resolve 'urgent, difficult, and anxious' issues

To serve the people, the key lies in solving problems on the front line, and promoting the ability to solve problems.

Providing insurance for fresh milk and giving dairy farmers peace of mind is a vivid example of the Qingdao Agriculture and Rural Bureau's deep implementation of the "four grassroots" system, which regards investigation and research as an important path, problem-solving as a key direction, and identifies and solves problems in a timely manner.

To solve the problem, we need to listen to the voices of the people. Only by going to the grassroots level can we fully understand the urgent and difficult needs of the masses. The so-called 'urgent, difficult, worried, and hopeful' is because problems have suddenness, urgency, and practical difficulties that are difficult to solve through individual efforts and require external assistance. By going to the grassroots level and immersing oneself in the front line, mastering real data and voices, we can empathize with the people, promote party members and cadres to better stimulate their professional abilities, sort out and summarize the individual experiences scattered in rural areas, find common problems, and provide "problem-solving ideas" for solving "individual difficulties".

Solving problems requires winning the hearts of the people. In the process of launching target price insurance for fresh milk, the Qingdao Agriculture and Rural Bureau has identified and summarized the underlying causes of the decline in milk prices and the practical needs of dairy farmers through multiple frontline investigations, discussions, and research demonstrations. A solution has been developed to regulate individual breeding losses caused by market fluctuations through insurance measures, and to listen to public opinion and solve problems in a practical manner. Providing insurance for fresh milk and meeting the urgent needs of dairy farmers is a concrete practice of the city's agricultural and rural system to warm people's hearts as the fundamental starting point, focus on the concerns of the masses, and use the satisfaction of the masses as the evaluation standard.

The direction of the people and the actions of the government. Only by focusing downwards on solving problems and improving effectiveness can the "four grassroots" reach the hearts of the masses, and party members and cadres can be good confidants, caring people, and leaders of the people.