China: Enabling Policy Environment

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There is a range of reasons for establishing agricultural and climate risk insurance, including adaptation to climate change, food security, disaster risk management or social protection.  Regardless of the motives, however, creating an effective insurance system inevitably cuts across various political spheres. Thus, the first key element is to create a broad consensus amongst policymakers and their commitment to creating an enabling policy environment. This includes the integration of agricultural and climate risk insurance into respective national policies,  strategies and action plans.
Coordination across government sectors is crucial to avoiding contradictory incentives amongst stakeholders: a government can, for example, crowd out insurance solutions through the provision of public social protection programs. Mobilizing public resources and creating a suitable regulatory framework are further imperative policy requirements for setting up effective agricultural and climate risk insurance systems.