Research On The Evolution Of American Agricultural Insruance System

The United States of America is one of those countries which have a longer history and better operating results in agricultural insurance, while its developed agricultural insurance system has made a great contribution to the development of American agricultural economy, the stability of farmers' lives, and the development and prosperity of American overall economy as well. The developing progress of American agricultural insurance system mainly consists of the initial period with its government running the agricultural insurance individually, the developing period with its government and private insurance companies running the agricultural insurance jointly, and the further developing period with private insurance companies running the agricultural insurance primarily and with its government as supervision of agricultural insurance. Besides, the developing of American agricultural insurance system has its own rich connotation in system evolution. The paper firstly analyzes and comments the evolution of American agricultural insurance system systematically according to the time sequence, then generalizes and analyzes the basic features and basic logic of the evolution of American agricultural insurance system, using the theory of system transition and welfare economic theory of Pigou.The paper focuses on the history track of American agricultural insurance system. There were special historical backgrounds, and the guidance of national economic policies and agricultural policies from the initial founding to the later development and further development. The founding of American agricultural insurance system started in 1938 with the form of government running of agricultural insurance individually. Roosevelt government applied the law to found the American agricultural insurance system formally, however, since the period was on the trial, the agricultural insurance's achievements weren't optimistic with two main problems from the beginning:the lower rate of participating insurance, and higher indemnification compared with premium. American agricultural insurance system stepped into the developing period with its government and private insurance companies running the agricultural insurance jointly in 1980 after ending 42-year running individually by its goverment. The developing period of American agricultural insurance system after the initial period took a lot of measures, such as legislations, preferential taxes, reinsurance, premium subsidies, financial support to private insurance companies, emergency loan plan, the trial of agricultural catastrophes risk securitization, new agricultural insurance plan, new management strategy and etc. American agricultural insurance system in this period had developed rapidly. On the one hand, federal crop insurance program had rapidly expanded, and on the other hand, disaster assistance became a supplement for crop insurance, however, higher cost and higher loss rate of Federal Crop Insurance Program indicated that the good performance of crop insurance program had cost a great price. In the year of 1996, American agricultural insurance system entered the further development period, with private insurance companies running the agricultural insurance primarily and with its government as supervision of agricultural insurance. American government has been playing an important role in the system design and system supply, and it carries on the further reform and development on the basis of original measures. Although the American government still needs to put large amount of money into the running of agricultural insurance, the business scale of American agricultural insurance displays the good trend of further expansion, the loss rate of Federal Crop Insurance Program has been controlled to below one, and insurance actuarial soundness has increased a lot.The paper puts forwards that the evolution of American agricultural insurance system has three features as followed:first, compulsory system transition dominated by government; second, take welfare as its orientation; third, the path dependence on the arrangement of forced system; and the paper analyzes them. The paper also puts forwards that the maximum of national utility forms the basic logic of the evolution of American agricultural insurance system and analyzes it.The paper carries on the economical analysis in the research process of evolution of American agricultural insurance system, holding that the attribute of agricultural insurance'quasi-public goods raises a demand for the participation of government, and information asymmetry of agricultural insurance raises a demand not only for the government's participation but also for the private companies'participation. The economical analysis added to the research of evolution of American agricultural insurance system can reveal the evolution of management system of American agricultural insurance. The paper hopes to offer a source of reference for china to construct and develop its agricultural insurance system, based on the research on the evolution of American agricultural insurance system.