Study On Grain Compensation For Natural Disasters In Hebei Province

Hebei province is one of important areas of grain cultivation and production in China. However, natural disaster which is varied, widespread, frequent, intensity, and severe has become one of the main factors in affecting grain production, rural economic and social development. Therefore, in the process of grain production, many goals must be reconciled, including prevention and mitigation, disaster compensation as well as grain security. However, the existing pattern of disaster compensation in Hebei province is still far from perfection. Disaster brings not only a lot of pressure to government finance and the insurance company, but also survival problems to afflicted peasant, and it affects the sustainable development of rural economy as well. Therefore, it is necessary to study the issue on compensation of natural disasters for grain production systematically, which has important practical significance on improving extent and efficiency for grain farmers, and has a very important theoretical and practical significance on grain security and sustainable development of rural economy.Based on disaster economics, public financial science, as well as insurance and risk management studies, and learning from the experience of natural disaster compensation at home and abroad, this paper proposes an effective compensation system for natural disasters for grain production in Hebei province, by the research methods of survey, qualitative analysis and quantitative analysis, as well as system analysis and historical analysis. This paper develops by the journey of the present state of natural disaster and the compensation in Hebei province - the effect of various compensations - the problems and causes of compensation - compensation mode selection and operation mechanism– innovation of compensation mechanism. The research results are as follows:First, it is found that there is a high negative correlation between reduced grain production and natural disasters by analyzing historical changes of natural disasters since 1949 in Hebei provinc; then the conclusion that there is great risk fluctuations of grain production in Hebei province in recent years is drawn through calculating dynamic changes using coefficient of variation of three years delay; In addition, the problems of compensation for natural disasters are found in view of the history and status on compensation for natural disasters in Hebei province.Secondly, through questionnaires and field research on the financial compensation, compensation for crop insurers, self-saving compensation, private informal finance, agriculture and other rural financial institutions indirectly, the performance of various compensation methods is analyzed. The results show that peasants are satisfied with the intensity, speed and purpose of capital investment in the of natural disasters during the process of government compensation, which play an important role in the area of compensation and aid, "prevention " function as well as "restitution" function. However, the independent variables of its "production development" functions are not significantly affected, reflecting the status of financial compensation in Hebei province. In the view of crop insurance business, the number of insurance main bodies and the range of their business categories in Hebei province are below normal standard. On the research of purchase needs and satisfaction of crop insurance, the author found out influential factors of the crop insurance purchase, and he also points out that the crop insurance which is still in relatively low level of service needs further improvement. In addition, on the research of rural formal financial institutions on the farmers' financial support and compensation for natural disasters, the author found although the compensation effect is indirect only through the loan to help famer restore grain production, the effect is obvious due to a longer repayment period, more limited loan scale and lower interest rates, which help farmers to better manage risk. Farmers' self-saving and mutual assistance among relatives and friends is very limited in the role of avoiding the natural disaster risk. Other groups of rural informal finance can address the difficulties of life temporarily, but its higher lending rates and other problems make it cannot be conducted as a major promotion. This mode can just be used as a compensation for finance, grain insurance and loan forms of rural institutions, which needs a common standard.Thirdly, make analysis of the fundamental problems from the view of subject of ecological compensation and reality restrictions, such as, financial compensation in low level; farmers' fluky psychology, that is relying on financial aid and risk awareness of disaster caused by other reasons is weak; the absence of government functions leads to law of disaster relief and compensation getting behind; lacking of market system; policy-related crop insurance, reinsurance and capital market imperfections lead to market mechanisms'inefficiency; other social organizations'lagging behind blocks their way of functioning properly.Next, make analysis of compensation model of natural disasters and get the conclusion that the compensation model of grain production using in Hebei province is workable. The model is cooperative compensation model, which mainly relies on compensation based on government financial investment and cooperates with social compensation mechanism. The paper proposes specific objectives, short-term objectives, medium-term objectives and long-term goals for cooperative compensation mechanism; analyzes its principle; puts forward its idea and key points. The paper also studies the possibility of cooperative compensation mechanism from the aspects of main structure and framework in order to fully integrate various effective resources and mobilize the enthusiasm of all participants. Joint all the compensation subjects together to form united strength to respond natural disaster, realize maximum compensation and reduce the chain impact of natural disaster.Finally, the paper analyzes the issue of cooperative compensation from the following aspects: increase combination between government investment and the market mechanism, set up a disaster fund, and to strengthen the crop insurance, reinsurance, transferring disaster function of capital market, and vigorously promote the policy of crop insurance, reinsurance, capital market and the development of social institutions. It also discusses the regional compensation and government should pay attention to environmental compensation of grain production, proposes catastrophe risk securitization and insurance, index of catastrophe losses and other ways to circumvent the problem, and a number of multi-pillar and multi-level compensation system for natural disasters of grain production.Of course, there are a lot of issues to study and solve in the compensation mechanism, such as disaster fund raising, risk zoning of grain crops, the determination of premium rates in grain crops, the optimal size of financial subsidies to crop insurance, catastrophe bond issuance and supervision. As the increasing attention and calculating knowledge on disaster losses of grain crops, the compensation mechanism of grain production in the multi-level must be established, and benefit the majority of farmers.