Study On Insurance-Credit Coupling Mechanism In The Adoption Of New Agricultural Technique

It is regarded in the traditional economic growth theory that the technological advancement is the most important determinant of the economic growth rate, while in development economics technological advancement is the main determinant of the speed and type of economic growth. On the other hand, it is thought in the neo-economic growth theory that the difference of economic development results from the factors which are useful in making full use of the advanced technologies instead of the different levels of knowledge and technology. Actually, the agricultural development in developing countries is the important aspect of the economic development. It is demonstrated in existing literature that after the finish of the household contract responsibility system in 1984, the technological advancement is the main factor promoting agricultural development. Invention, promotion and application of agricultural technique is the core factor that promotes the process of agricultural modernization. This thesis studies the establishment of an appropriate mechanism to promote the adoption of agricultural new technique and the agricultural development under the circumstances of constructing a complete well-off society, accelerating the development of agricultural economy and strengthening the new rural construction.It is characterized with high profit, great risks and large amount of early investment in the adoption of new agricultural technique. Farmers who adopt the new agricultural technique are confronted with the uncertainty constraint and liquidity constraint because of the deficiency of their own resources endowment especially of capital and the weakness of resisting risks and of financial capability. Without effective means or mechanism to unchain them, the constraints will have effect on farmers' adoption of new agricultural technique. The twisted development of agricultural insurance in China and years of sluggish development of farmers' income result in farmers' deficiency of dispersing and evading risks. Under the circumstances that most stated-owned financial organizations retreats from the rural market leaving only Agricultural Development Bank and Rural Credit Cooperative Union and that the farmers' microfinance which is developing rapidly can help farmers to solve the shortage of capital to some extent, farmers are still confronted with the liquidity constraint which is very critical for those who are about to adopt the new agricultural technique.Current literature studies the uncertainty constraint and liquidity constraint separately and so are the countermeasures to unchain these constraints, which generally manifest...