Crop insurance coverage at 58%, aquaculture at 42% as heat waves become routine

Livestock insurance enrollment stands at 96%; government pledges to expand coverage to address climate crisis

As climate change makes extreme heat and high sea temperatures a regular occurrence, agricultural and fishery disaster insurance — a key financial safety net for farmers and fish farmers — is drawing growing attention. Yet last year, enrollment in crop disaster insurance fell short of 60%, and aquaculture disaster insurance coverage hovered around 40%, leaving expanded enrollment as a pressing challenge.

According to the Ministry of Agriculture, Food and Rural Affairs and the Ministry of Oceans and Fisheries, crop disaster insurance enrollment — covering both crop disaster insurance and agricultural income stabilization insurance — stood at 57.7% last year, while aquaculture disaster insurance enrollment reached 41.5%. Livestock disaster insurance, by contrast, recorded an enrollment rate of 96.4%, highlighting a wide gap across insurance types.

Crop disaster insurance launched in 2001 with two commodities — apples and pears — and has since expanded to 78 this year. Cumulative insurance payouts through last year totaled 8.58 trillion won ($6 billion). Last year alone, 1.39 trillion won was paid out to about 281,000 farming households that suffered losses from heat waves and wildfires.

Livestock disaster insurance, introduced in 1997, covers 16 animal species — including cattle, pigs and poultry — as well as barn facilities. Cumulative payouts through last year reached 2.36 trillion won, with 227.5 billion won disbursed last year to 12,375 farms hit by heat waves and fires. Of that total, 32 billion won went toward heat wave damage compensation.

Aquaculture disaster insurance, introduced in 2008, covers 32 species including flounder and abalone, and protects against more than 15 types of natural disasters such as typhoons, red tides and high sea temperatures. Over the past five years, 13,884 fishing households enrolled, and the 1,564 households that received payouts collected an average of 77 million won each.

Research is also confirming the benefits of agricultural disaster insurance. The Korea Rural Economic Institute recently published findings showing that the longer a farming household holds agricultural disaster insurance, the smaller the fluctuation in farm income, contributing to greater management stability. The institute estimated the annual social value of agricultural disaster insurance at approximately 753.5 billion won.

The government is also revising the insurance regime to boost enrollment. Under an amended agricultural and fishery disaster insurance law taking effect Aug. 15, farming and fishing households that suffer losses from natural disasters that are difficult to predict or avoid — such as heat waves and high sea temperatures — will no longer face premium surcharges the following year.

The Ministry of Agriculture, Food and Rural Affairs has also improved compensation standards for crop disaster insurance, reflecting heat wave damage in 2024 and last year. The Ministry of Oceans and Fisheries, meanwhile, pays enrolled aquaculture households insurance benefits based on the scale of damage with no cap — separate from disaster relief grants of up to 50 million won — and covers 85 to 90 percent of the market value of farmed organisms and the full restoration cost of damaged facilities through a high sea temperature rider.

However, enrollment rates remain a challenge. Among species vulnerable to high sea temperatures this year, the rate for starry flounder reached 100%, while olive flounder stood at 72 percent, abalone at 68.1 percent, oysters at 68.1 percent, mullet at 68.1 percent and Korean rockfish was limited to 24.8 percent.

"Starting Aug. 15, the burden of premium surcharges will disappear even when damage results from unavoidable natural disasters," a government official said. "As natural disasters become routine due to climate change, we will work to expand disaster insurance enrollment to stabilize the incomes of farming and fishing households."