Research On The Demand Of Rice Revenue Insurance For New Agricultural Business Entites

In recent years,with the rapid development of agricultural modernization,China’s agricultural production and management technologies have been continuously upgrading.Under the promotion of the Rural-land Transaction System,the new agricultural business entities characterized by scale management have developed rapidly.Large-scale,modern,market-oriented management,on the one hand,brought higher output for crop production;and on the other hand,it also increased agricultural risk per unit area.Risk concentration on unit area increased income fluctuations of the new agricultural business entities.In a long period of time in the future,the impact of market mechanisms on China’s agricultural production will become increasingly apparent,and the market risk and income risk management will become one of the most important issues in agricultural production.How to establish an effective rice revenue insurance system to diversify the market risk and income risk is a key issue that affects farmers’ production and income.To meet the diverse needs of farmers’ risk management,and to reduce risk in large-scale agricultural management,it is urgent to develope the rice revenue insurance that suits China’s national conditions and suitable for the new agricultural business entities.The No 1 Central Document from 2016 to 2018 called for establishing the crop revenue insurance system,and the establishment of the crop revenue insurance system has become one of the important components of China’s multi-level agricultural insurance system.The successful implementation and smooth promotion of crop revenue insurance are affected by many factors such as governmental supporting,product features,operating mechanism,and implementation environment.The most important one is whether it can meet the demands of the demand side and the supply side at the same time.Only accepted by the new agricultural business entities,meeting the risk management needs of the new entities,and on this basis,bringing profits to insurance companies in a commercial environment,can crop revenue insurance increase the enthusiasm of market participants and develop sustainably.With rice management risk and the demand of rice revenue insurance in Jiangsu Province as the object of the research,this thesis discusses the core issues of how the internal and external factors of institutional implementation affecting the rice revenue insurance demand of the new agricultural business entities,explores the new agricultural business entities requirements and selection mechanism of rice revenue insurance,and analyzes the necessary conditions for constructing rice revenue insurance supply system through demand from three perspectives:differentiated requirements for agricultural risk management for the new agricultural business entities,the new agricultural business entities’ demands and preferences for rice revenue insurance,and the influence of institutional design and environment on the supply and demand of the rice revenue insurance.This article is divided into 7 chapters and the main contents are summed up as following:Content 1:Analysing the differences in the new agricultural business entities’ needs for rice revenue insurance based on the present situation of the development of the the new agricultural business entities after implementing the rural-land transaction system in China.Referring to the qualitative and quantitative studies on rice planting risk,this part theoretically analyzes the differences in levels and types of rice planting risk in the context of the agricultural businesses differentiation,and infers that the needs of growers of different scales for agricultural insurance are different.Further,the investigation leads to the needs and influencing factors of rice insurance for the new agricultural business entities,reveals the differences in the risks between the new agricultural business entities and the smallholders under the conditions of modernization,larg-scale,and marketization,and establishes an Tobit model to analyze which factors will affect the new agricultural business entities’ satisfaction with rice insurance.Based on this,the urgent need for revenue-guaranteed rice insurance for new types of agricultural management subjects is derived.On the basis of the analysis above,it is concluded that the new agricultural business entities have an urgent need for revenue insurance.Content 2:Based on the needs for risk management and income security,this part analyzes the demand of the new agricultural business entities for rice revenue insurance.Whether the new agricultural business entities will choose rice revenue insurance depends mainly on the comparison between the expected utility after insured and the utility of other insurance policies.Under the premise of maintaining production,if the new agricultural business entities are able to obtain more expected utility than other insurance policies covered by rice revenue insurance,they are more willing to choose it.Under the constraints of multiple factors,such as risk appetite and factor endowment,the new agricultural business entities have formed a selective behavior for rice revenue insurance.The research analyzes the selection behavior of rice revenue insurance based on a survey of understanding and needs of the new agricultural business entities,establishes an Multinomial Logit Models to examine differences in impacts of differences in risk appetite and information acquisition on entities’selection among different kinds of insurance,and further explores how the heterogeneity characteristics of the new agricultural business entities influence their choice.Content 3:Taking the experiment plot as an example,this part further analyzes the impact of system design on supply and demand of rice revenue insurance.In terms of insurance supply,the implementation of rice revenue insurance helps to provide income guarantee for the new agricultural business entities,and has the positive effect of diversifying market risk and reducing income fluctuations.However,the supply of revenue insurance is restricted by its own design and environment,it does not have a complete implementation basis currently,commercial insurance companies and government lack the incentive to provide it,and the insurance cannot fully attract the new agricultural business entities.Based on the analysis of the practice in the experiment plot,the research proves that the existing external environment and internal constraints are important factors that restrict the supply and demand of rice revenue insurance,and discusses how to establish the rice revenue insurance system in China that meets the interests of participants when the insurance covers new agricultural business entities.By theoretical and empirical research,we obtains the conclusions and policy implications as follows.(1)Greater income risks the new agricultural business entities are facing result in their demand for rice revenue insurance.(2)The new agricultural business entities in non-main producing areas are more inclined to choose revenue insurance,so initial priority can be placed on non-main producing areas,and works in an orderly way according to the needs.(3)Cognitive biases of the new agricultural business entities in rice revenue insurance have a significant impact on the demand,and improving the awareness level of the rice revenue insurance can helps to spur demand.(4)With the increase of input,the new agricultural business entities give priority to the output security by insurance,and the increase in market risk perception has a positive impact on the demand of rice revenue insurance.(5)The lack of market risk diversification channels and catastrophe risk dispersal ability make insurance supply organizations lack effective risk dispersion mechanism.We need to vigorously develop the futures market for agricultural products,and improve the agricultural catastrophe risk dispersion mechanism.(6)Multi-level government financial premium subsidy mechanism has not yet been established,and it is difficult for local finance to maintain premium subsidies for a long time,which is not conducive to encouraging and stimulating the purchase of rice revenue insurance.We need to improve the financial subsidy system for rice revenue insurance and establish a multi-level financial support mechanism.