Study On Policy-Based Agricultural Insurance In Jilin Province

The No.1 central document made clear requirements for the development of Chinese policy-based agricultural insurance(PAI) in the ten consecutive years of 2004-2013. First, it is required that the trial of agricultural insurance be developed, the proper agricultural managing mode be explored and financial departments at all levels offer premium subsidies for agricultural insurance. Second, it is emphasized that PAI operation mechanism and development model should be perfected and Establishment of reinsurance and catastrophe risk transfer mechanism should be proposed. Third, it is mentioned that the agricultural insurance in policy should be perfected, agricultural insurance premium subsidies should be optimized and agricultural insurance should be actively carried out, etc. All of these policy guidelines reflect the government’s decision of developing PAI. It also reflects the requirement of perfecting agricultural insurance operation mechanism and improving the level of agricultural risk protection.Jilin Province is one of the first central finance subsidies of agricultural insurance premiums in six pilot provinces, which established the managing mode of state leading, Commercial insurance companies charging affaires. In the six years of 2007-2012, Jilin PAI got the overall stable development, the size of agricultural insurance premiums was increasing, loss ratio was gradually stabilized, the arable land area of crop insurance accounted for over 70% of the second round undertaken, the basic risk protection system was established for the farmers in the whole province. However, with the deepening of the PAI pilot, many problems are exposed, which mainly include that agricultural catastrophe dispersion mechanism lacks, farmers’ insurance awareness is weak, the level of agricultural insurance protection is low, the tolerance of local financial lacks and there is no competition induction mechanism of agricultural insurance, etc. All of these problems are the obstacles of affecting the sustainable development of PAI in Jilin. Therefore, based on the specific problems faced by Jilin PAI, through in-depth investigating, measuring, calculating, comparing and analyzing, the article analyzes the affecting elements and builds the mechanism of the development of policy-based agriculture insurance in Jilin to put forward the countermeasures of the sustainable developing of PAI in Jilin.The general objective of the research is to analyze the developmental process of PAI in Jilin, to summarize the experiences of PAI pilot in Jilin, to evaluate the policy effect of PAI in Jilin, to dig out the reasons of imbalance between the supply and demand of PAI in Jilin, to draw a lesson from the typical development patterns of agriculture insurance in foreign countries and to clarify the role of the authority in order to build and perfect the development mechanism of PAI in Jilin and put forward the developmental advice of PAI in Jilin. The main contents are as follows:Firstly, through sorting and summarizing the previous research literature, risk management theory, new institution economic theory and the new research result of economic mechanism design theory about PAI internal and external to form a theorical framework of PAI developing theory in Jilin. It comes to a conclusion that after several years of having policy-based agriculture insurance pilot in Jilin, the government should base on summing up the experiences of pilot, analyze the problems in the developing of PAI systematically, perfect the developmental mechanism of PAI to realize sustainable development of PAI in Jilin.Secondly, the article sorts the developing process of PAI in Jilin, clears the developing process and general rules of agricultural insurance policy, comprehensive evaluates development status of agricultural insurance in Jilin and analyzes the feature of different types of insurance and the subsidy situation of PAI in Jilin.Thirdly, do the research of the behavior characteristics of farmers buying PAI in Jilin mainly by site survey to analyze the features which affects the demands of PAI. The article uses the logit pattern to measure and calculate the features which affect the demands of PAI. The study finds that farmers buying agricultural insurance are significantly positively affected by the educational status of the head of the farmer household, the level of family income and the classification of agricultural disaster, however, it is indistinctively affected by the cognitive level of the farmer to the agricultural insurance policy, the size of the farmland, the level of agricultural insurance protection and the claims process evaluation of agricultural insurance. It also shows that the reasons of farmers buying agricultural insurance are complicated. The insurance companies should develop agricultural insurance production properly combine the situation Jilin province to batter satisfy the demands of the agricultural insurance by the famers. Through the investigation, a further thought is that the main reasons of unwilling demands of the PAI in Jilin are poor risk awareness of farmers, low level of farmers’ income, irregular process of effecting agricultural insurance, low level of agricultural insurance protection, limited condition of farmland insurance and less insurance variety, est.Fourthly, through investigating and analyzing the particularity of the agricultural insurance supply and agricultural insurance administration agency study the limited features and policy demands of agricultural insurance supply. And it also comprehensive evaluate the agricultural insurance market concentration, the integrated ability, managerial level and the level of production supply and service of agricultural insurance administration agency. It comes to a conclusion that the PAI supply works as intended of stabilizing agricultural production, the types of agricultural insurance is constantly enriched, the management level of insurance company is stably raised, the service network is constantly perfected and the development of rural credit is simulated. And the main factors of limited agricultural insurance supply are the problems of the situation of local fiscal subsidy, the cooperation of agricultural insurance suppliers, disaster risk dispersive mechanism and the operation cost.Fifthly, the article analyzes the location and responsibility of the government in the developing of PAI and through risk utility theory and game theory analyzing provides theory basis for the government to support agricultural insurance development and clarify the responsibility and location of the government in agricultural insurance development. Then the article evaluates premium subsidy efficiency of PAI in Jilin by Data Envelopment Analysis(DEA), puts forward the proposal of risk division and implement different agricultural premium rates. In addition, through investigating the main problems of supporting agricultural insurance by the government in Jilin is high pressure of the county-level fiscal subsidy agricultural insurance, the lack of effective reinsurance supportive policy, poor coordination among multi-sectors, the lack of effective competition induced mechanism and inadequate publicity.Sixthly, the article does the comparing research of the operating mechanism of agricultural insurance abroad. Three typical foreign development patterns of agriculture insurance are selected: the mode of government-led agricultural insurance, mutual insurance model under the support of the government and the mode of privately run under state ownership agricultural insurance. And the representative countries are USA, Japan and France. Experiences obtained through the comparing and summarizing the development of foreign agricultural insurance are that a set of perfect legal system of agricultural insurance has been established, governments give great support and deeply participate to the agricultural insurance, the combination of voluntary insurance system and compulsory insurance is adopted and the system of reinsurance is established, etc. The mature experiences of foreign agricultural insurance development provide favorable references for the designing of PAI development countermeasure in Jilin.Seventhly, construct the operational mechanism and built the developing model of policy-based agriculture insurance in Jilin. Basing on the actual condition of Jilin agriculture production and the generalizations of insurance development, in-depth studying and analyzing the agriculture insurance market, the policy-based insurance developmental ways are proposed from several aspects: agriculture insurance risk management mechanism, marketing operation mechanism, government induce mechanism, supervision and management mechanism and catastrophe risk transfer mechanism. Furthermore, the government can get the way to perfect the agricultural insurance supporting system, optimize market operating mechanism of the policy-based agriculture insurance, eliminate the information asymmetry problem multi-methodly, build an effective catastrophe risk transfer mechanism, and improve the development countermeasures of supervision and restraint system of agriculture insurance.