Study On The Micro-effect And Policy Optimization Of China Livestock Insurance

Livestock insurance is an effective risk management tool for the development of breeding industry. China began to carry on the policy premium subsidy to the livestock insurance in 2007. Policy livestock insurance provides an important guarantee for reducing the risk of farmers, but there are still some problems, for example a single level of protection, the low insure rate of farmers, moral hazard and adverse selection behavior and so on. And the current policy livestock insurance underwrites the loss of livestock death. There are also limitations in the protection of market volatility risk. Some regions of China have started to carry out the swine target price insurance pilot, but the pilot areas and scale is very limited and can not meet the insured need of vast number of famers. Also the cycle fluctuations exist in the market of swine. For these reasons, farmers have serious adverse selection behavior when insured.Based on the problems existing in the current policy livestock insurance, this paper empirical analyzed the problem of decision factors of famers' insured willingness, the existence of moral hazard and adverse selection in pilot areas. Through the research and analysis of some pilot areas of China, which have carried out the price index insurance, the feasibility and existing problems of promoting China swine target price insurance were put forward and the policy recommendations were made in the paper, for supplement and policy optimization to the current China policy livestock insurance. The main research contents of this paper are as follows:First, the current development of China policy livestock insurance was analyzed. The experience of livestock insurance policy in developed countries was studied. The problems of China's policy livestock insurance, catastrophe risk transfer mechanism and the effective demand of farmers were put forward. Therefore, it is suggested that the law and regulations of our country's agricultural insurance should be improved, catastrophe risk transfer mechanism and the diversification of the policy insurance products were established.Second, the impact factors of farmers' willingness to participate in the policy livestock insurance and swine target price insurance were analyzed. In the paper, 428 farmers were investigated as the research object and the research data, combined with the discussion of local government and insurance agencies, was analyzed by logit model. The results showed the willingness of farmers on the current policy livestock insurance was significantly higher than that of target price of insurance, the factors of farmers' income accounted for the ratio, degree of risk perception, scale of farming and market fluctuations were significantly affect the insured wishes of farmers.Third, the moral hazard and adverse section in the insurance process of policy livestock insurance were empirically analyzed. The survey data of farmers and insurance companies were analyzed by Probit model and cross analysis. The results showed farmers insured without full insurance on sow insurance, but moral hazard problems of not healing illness which has been insured and intentionally not improving the health and epidemic prevention conditions were not exist. However, potentially fraudulent behavior of uninsured mortality was existed. The results also showed the farmers' education level, family income and the scale of farming had significant impact on whether or not pay attention to improve the health and epidemic prevention conditions.Fourth, the swine target price insurance system of China was analyzed. Many problems of the target price determination, insurance period design, the establish of catastrophe risk dispersion mechanism and government financial subsidies in pig target price insurance were put forward through the investigation on the pilot area of agricultural products price index insurance. Some suggestions were put forward: the terms of pig target price insurance should be improved, market price monitoring system should be sounded, catastrophe risk protection system should be established and the premium subsidy should be improved gradually.Finally, according to the research results, put forward some policy suggestions as followed: encourage large-scale breeding, strengthen the propaganda of insurance knowledge, establish the catastrophe risk protection system, carry out the policy livestock insurance according to local conditions, increase government financial investment, drive the development of the swine target price insurance.