Analysis Of Crop Insurance Premium Subsidy In Typical Countries

As one of the main tools of agricultural risk management, agricultural insurance become more popular around the country. The PICC had restarted the agricultural insurance business since 1980s. But running agricultural insurance in the commercial way is not successful. Until 2003,a pilot program is start in 9 selected provinces and autonomous regions. In 2007, the first pilot act of agricultural insurance premium subsidy is published. In the second year,a formal act replaced the pilot act,which stipulate the ratio of premium subsidy provided by both central government and local government. In current situation,the policy objective should be "lower protection level but broader coverage".The main target is to ensure the peasant have the money for reproduction after the disaster. Compare to the developed country, we have little experience in the certain field. So learn from the success is quite necessary.According to the foreign experience,commercial operation of agricultural insurance without government support is never succeed. But government intervention was not going smoothly. Even U.S. government made 3 more reformation to enhance the premium subsidy ratio after 1980 Act. There are different police objectives in each country, which depend on their own agricultural situation and comprehensive national strength. American has different subsidy ratio towards different protection level. And the government pays all the premiums for the catastrophic risk. In Canada some agricultural insurance, which can be commercialized, will not receive premium subsidy at all. Japanese government gives more premium subsidy to cereal crops and area with higher risk. In Spain, they make different catalogs for policyholder.All those difference reflect the diversified policy objectives. The premium subsidy used to protect the insurance running smoothly. But as it was allowed in the WTO "Green box Policies", all the government wants to make use of it. Spain uses it to convert the cultivation pattern.U.S.government pays for the catastrophic risk in order to offer more safeguard to agriculture. According to the results of some research, the premium subsidy has effects on enhancing production and peasant's income.In the processing of agricultural insurance development, we have to make diversity in different area depends on the own situation. I hope we can learn from the foreign experience.