Since 1990, the COA has provided relief subsidies to farmers affected by natural disasters. Through 2013, such relief totaled more than NT$37 billion. As global climate change increases the ferocity and frequency of natural disasters, and causes unusually high temperatures and rainfall, the risks for agriculture grow correspondingly. The government simply does not have the financial resources to be the sole provider of disaster relief funding to protect farmers’ incomes and financial security. As a result, the COA decided to create an “Agricultural Natural Disaster Insurance” (ANDI) system.

In weighing this idea, the COA took into account the principles of insurance, our experience with policy-based insurance, administrative costs, and how much financial burden the government can absorb. We decided that we would first begin on a trial basis, and evaluate one or two crops of high economic value to determine their suitability as the trial crops for the ANDI system. After collecting data on (i) production, and (ii) losses to natural disaster, for these trial-period crops, we will commission a professional insurance body to design trial ANDI products suited to the practical needs of farmers. In the future, we will continue to study this idea, taking into account variables like the forms trial implementation might take, who new insurees will be, what degree of protection for losses should be offered, how premiums should be handled, and possible government financial contributions. It is hoped that the experience gained through trials will lead to ever-wider implementation of the system.