Study On Risk Management And Revenue Insurance System For China Grain Farmers

Food production is very important for China, a country with a population of 1.4 billion. To ensure the interests of farmers and ensure national food security, China to implement based on the minimum purchase price and temporary storage policy of propping up the market since 2004, at the cost of distorting the market to achieve "stable" food prices, has accumulated some contradictions and problems, urgent need to adjust.The policy adjustment is likely to make Chinese farmers face not only the yield loss caused by natural disasters, but also face severe and frequent price volatility. In order to avoid price support policy adjustments to damage the existing farmers interests, China since 2014 put forward on the basis to make a price in the market, to explore the establishment of the system of agricultural product target price. As a realization form of the target price system, the grain revenue insurance is an effective policy tool to alternative grain price support policy, farmers’ risk management and ensure the interests of farmers? The main research contents of this paper are as follows.1. This paper comprehensively analyzes China grain risk characteristics, and studies the existing problems and shortcomings of the system of grain risk management tools.The comprehensive analysis of the grain risk characteristics of China.(1) the nature, characteristics and qualitative trend analysis of grain revenue risk. The grain revenue risk is decomposed into yield risk, price risk and cross risk between the two. Analysis of its features from the four aspects of systemic risk, the availability of risk information, risk information asymmetry and the existence of risk hedging, etc., and based on extreme weather disasters, liberalization and openness of food markets as well as scale business entities analyzing Chinese grain risk widening;(2) The quantitative analysis of the risk of Chinese grain from the variety and spatial perspective. Based on the national level of production data, the highest grain revenue risk, price risk followed by the lowest yield risk. In a variety of species, whether it is the risk of revenue from the loss of the magnitude or the frequency of the occurrence of revenue risk, the highest revenue risk of rice, followed by corn revenue risk, wheat revenue risk minimization. Spatial aggregation can damage the yield risk and price risk, and the spatial decomposition will increase the risk of yield and price risk. The destruction degree of spatial polymerization to yield risk is greater than the price risk. Grain revenue risk is not a simple sum of yield risk and price risk. The results show that the revenue riskis less than yield risk and price risk and, natural hedge exist between grain price and yield in China, with endogenous stability characteristics.Current grain revenue risk management policy exists many problems and shortcomings, it is difficult to effectively manage the risk of farmers to grow grain. The security level of yield risk management tools and policies is too low. Chinese management grain yield risk policy tools is fiscal disaster relief and crop insurance only to protect limited yield loss risk. And fiscal disaster relief use administrative means for post emergency risk management and insurance costs as a kind of market risk management tools and more fair, transparent and effective, not only can solve the reproduction of much-needed funds to restore the individual farmers, and raise funds in various ways to lighten the financial burden, and in compliance with the WTO "green box" policy, play a more important role in China’s natural disaster risk management.The high cost and poor availability of price risk management tools. The futures market is the best tool to manage the risk of grain price, but the development of China’s grain futures market is relatively backward, and can not be directly used for China’s small scale farmers. Quantitative analysis found that the grain price support policy, although can significantly reduce the farmers revenue risk, but caused increasingly serious high food inventory, a surge in imports and other problems, policy shortcomings more obvious, urgent need to adjust. Target price subsidies and target price insurance are two types of revenue risk management tools and policies, the real focus on managing price risk. Compared with the target price subsidies, target price insurance more in line with international rules, you can enlarge the effect of protection, while reducing the impact of the financial.This paper puts forward a comprehensive coverage of production risk and price risk of the grain revenue insurance, the use of a natural hedge between output and price and have stable characteristics, fusion of current agricultural insurance and futures market two market risk management tools, to better guarantee the revenue of grain farmers, to ensure national food security.2. Based on the summary of international experience, analysis of the design scheme and feasibility of introducing China grain revenue insurance.To sum up the experience of the development of agricultural revenue insurance in foreign countries. The United States is the only country in the world large-scale implementation of agricultural revenue insurance. The United States as an example to analyze the practice and experience in the design and construction of agricultural income insurance scheme design and subsidy system. Agricultural revenue insurance is already a new trend under the WTO framework of agricultural support policy. Based on conditions of agricultural situation, design the appropriate revenue insurance scheme. To promote agricultural revenue insurance economically viable, two-way financial subsidy mechanism and the matching mechanisms should be established.The feasibility of introducing grain revenue insurance and design scheme in China. Firstly, this paper theoretically analyzes the agricultural revenue insurance insurance and how to promote the transformation of insurable through technological innovation and institutional innovation; secondly, from the revenue insurance has three key elements of successful, China has initially possessed the certain development foundation; finally, it is pointed out that for present stage of our country group revenue insurance scheme is the best solution, and the main points of scheme design are introduced. Based on the construction of agricultural revenue insurance pricing model, to determine the Chinese farmers’ revenue insurance rates.3. Reasonable suggestions on China grain revenue insurance subsidy system.First of all, clear Chinese development revenue of grain insurance target. Grain revenue insurance at the present stage of China’s goal of grain price reform is an important policy tool and play more and more important role in the future of food risk management framework system should actively explore the comprehensive risk management model of the grain insurance revenue; secondly, the basic principles of the development of Chinese farmers’ revenue insurance is the new cooperation between the government and the market relations, step by step, appropriate competition and encourage innovation. Development focus is to promote group revenue insurance in the main grain producing areas, appropriate tilt to the new agriculture business entities.Finally, for the implementation of the safeguard farmers’ revenue insurance, on the one hand, the government should construct scientific grain revenue insurance subsidy mechanism, guarantee it is economically feasible. From the development grain revenue insurance cost is composed of, to realize the whole process of the insurance guarantee; on the other hand, the government should improve farmers’ revenue insurance facilities, reduce the operation cost. on the development is in the wheat and rice producing areas promote pilot regional revenue insurance. Finally, for the implementation of the safeguard farmers’ revenue insurance, on the one hand, the government should construct scientific grain revenue insurance subsidy mechanism, guarantee it is economically feasible. From the development grain revenue insurance cost is composed of, to realize the whole process of the insurance guarantee; on the other hand, the government should improve farmers’ revenue insurance facilities, reduce the operation cost.The possible innovative points:(1) use of the OECD’s agricultural holistic risk management analysis method, based on classification of output and price of China grain risk framework of integrated management system;(2) in this paper based on the theory of agricultural revenue insurance earlier systems research in China introduced grain revenue protection insurance feasibility and scheme design;(3) adopt ARIMA model is fitted to the grain yield and price distribution, and the construction of agricultural revenue insurance pricing model based on Copula function.