The Research On Financial Subsidies For Policy-Oriented Agricultural Insurance

China has been in the important historical period of transition from traditional agriculture to modern agriculture. As the fundamental industry of the national economy, China's agriculture is a relatively weak industry, and the abilities of farmers to resist disasters are still rather fragile. With varieties of systematic and non-systematic risks in the process of agricultural production and management, there are many uncertainties in the development of agriculture. Under the premise that the impacts of natural disasters on agricultural production can not be fundamentally changed in the near future, agricultural insurance as an important agricultural risk financial instrument and institutional arrangement, plays an irreplaceable role in the stability of agriculture production and increasing farmers'income. However, the development of China's agricultural insurance has always been in a low state, which is not commensurate with the status of China's agriculture development as well as the increasingly fierce competition in international markets for agricultural products.Practices of domestic and foreign agricultural insurance show that the successful development of agricultural insurance can not be separated from the government's support, particularly the financial subsidies, which means we must implement the policy-oriented agricultural insurance system. Although the importance of financial subsidies for agricultural insurance from the Government has been concerned extensively, there has neither been a specific thought of subsidies nor the actual operation of the program. In this case, we should learn the experiences of foreign financial subsidies of agricultural insurance, compare and analyze the subsidies models for the pilot regions to explore an effective way of agricultural insurance subsidies, which has important practical significance to promote the policy-oriented agricultural insurance and even the rapid development of the whole agricultural production.In this thesis, according to the frustrate development of China's agricultural insurance, firstly we analyzed the reasons for the limited demand and supply in agricultural insurance market, to provide a theoretical basis for financial subsidies for policy-oriented agricultural insurance respectively using the phenomenon of market failure in agricultural insurance and the performance of financial subsidies for agricultural insurance. Secondly, we established an information incentive model with the theory of mechanism design. It is assumed that there is a balanced premium subsidies for farmers by the government. As the existence of moral hazard phenomenon as a result of information asymmetry between the government and insurance companies, the government should introduce other easily observed variables to increase the transparency of information, and provide incentive and restrictive financial subsidies for insurance companies, thus confirm the endogenous optimal scale of financial subsidies. After that, this article selected five representative experimental regions to analyze the financial subsidies model for the policy-oriented agricultural insurance, and they were Heilongjiang, Shanghai, Jiangsu, Zhejiang and Sichuan, then compared the similarities and differences of these subsidies models from the principle of subsidies, the scope and the proportion of subsidies, the pattern of subsidies as well as catastrophic risk compensation, and eventually got the problems in the current financial subsidies for policy-oriental agricultural insurance. Finally, it concluded through a rational institutional design and innovation to maximize the effectiveness of financial subsidies for China's policy-oriented agricultural insurance, and achieve the target of the government to support agricultural development and increase the farmers'income, thereby promote the sustainable development of China's agriculture.