Study On Development Issues Of Policy-Oriented Livestock Insurance In China

Livestock insurance is one of the most important focuses concerning with "Issues of Agricultural" in China. Since2007, the government of China has started to develop the pilot policy-oriented livestock insurance in practice. However, this undertaking did not move forward smoothly largely due to the unitary level of crop insurance coverage which significantly constrained farmers'effective demand for livestock insurance program. Thus, there exists a big gap between China's current unitary coverage of livestock crop insurance and well-developed international livestock insurance programs abroad. This gap primarily exhibits that the pure livestock insurance premium in China does not cover those potential catastrophic losses, thus it has been caused a vary degree of the suspicious as to the rationality and effectiveness as well of the Chinese government livestock insurance premium subsidy policy. In addition, China has not developed a sound theory and applicable actuarial method to be used in balancing triple-party benefits involving with government, company and livestock household. Therefore, along with the expanding livestock insurance program experiment in China it is imperative and the upmost for China to be able to accurately determine appropriate livestock insurance premium price. Apparently, this is the key for the Chinese livestock insurance program to be success in the near future.Firstly, in light of application of externality theory in agricultural insurance, a break-even principle and utility maximization theory, this study reviewed the current and history issues of livestock insurance, analyzed existing problems, the paper proposed reasonable suggestions for livestock insurance tomorrow.Secondly, this paper conducted empirical study on farmers'willingness to pay for livestock insurance program in Panjin of Liaoning province by utilization of the utility function theory and Logit model. These suggest that government should pay more attention to educate farmers on the utility of livestock insurance program, promote livestock production specialization and proceed in an orderly way and step by step in developing livestock insurance program.Thirdly, based on1987-2007historical population of cattle and swine in the area of Panjin, this paper determines distribution of breeding risk and calculates the premium rates combining with econometrics and statistics. The aim is to explore scientific and academic base for China's policy-oriented healthy development.Finally, the conclusions were generated based on the empirical case study from which novelty points were summarized, and following up by study limitations and future expected research work discussion. Furthermore, the author proposed several ideas for China livestock insurance policy-making and its improvement in the near future. Not only are those study findings useful for the study area's livestock insurance development, but also, it can provide learning lesions for the nationwide government supported livestock insurance program in terms of research method and applied techniques.