Government subsidies for premiums helped China's agricultural insurance sector more than double last year, the industry regulator said.

Premiums more than doubled to 11 billion yuan (about US$1.63 billion), and nearly 11 million rural households received 6.9 billion yuan in claims payments last year, up 110 percent year-on-year, statistics from the China Insurance Regulatory Commission (CIRC) showed.

Calling the increases a "breakthrough," CIRC Statistical Department chief Wu Xiaojun attributed the rise to a pilot program that expanded from six to 16 provinces between 2004 and 2008.

The government began to offer subsidies for farm insurance premiums in major grain- and livestock-producing areas in 2004. At the time, aggregate agricultural policy premiums stood at less than 400 million yuan, a mere fraction of last year's figure.

Subsidies vary, but for example, sow-breeders in Heilongjiang Province pay only about 20 percent of the premium, with central and local finance covering the rest.

Jiangsu Province, in eastern China, earlier this month put 50 million yuan into a reserve fund against natural disasters -- equivalent to 10 percent of the province's total agricultural insurance premiums in 2008. Those premiums covered 2.3 million ha of rice, corn and cotton crops.

CIRC Inner Mongolia Bureau chief Zhi Pengfei said that expanding farm insurance had strengthened the local farming and breeding industries.

He said that Inner Mongolia planned to add rape, sunflower seeds and dairy cows to the program this year. So far, farm insurance in the region has only covered sows, corn, wheat and soybeans.

(Xinhua News Agency January 26, 2009)