Organizational Structure of the Agricultural Insurance Scheme
The Japan's Agricultural Insurance Scheme starts as the local farmers' cooperative action to establish a joint reserve fund by accumulating the contributions as premium for the purpose of making up for the loss, from which farmers who are actually hit by a natural disaster suffered. This is the insurance by the Agricultural Mutual Relief (AMR) Associations or municipal governments.
As is often the case in the other countries, a natural disaster often causes big losses to farmers over a large area. As regards the agricultural insurance, therefore, the risk cannot be adequately dispersed within the limit of local communities or even prefectures. Therefore, this insurance program is operated as a device of dispersing risk, in which liabilities by the AMR Associations and the municipal governments are reinsured by their prefectural federation, and further, the federations' liabilities are re-reinsured by the national government.
The organization of the agricultural insurance is shown in the following chart.